People hate car dealers. Of course, there are always nice guys, but many car dealers just have to cheat their way to profits. Here are the top 5 auto scams that you absolutely must avoid, or risk paying way too much for your car.
Scam 1: The Yo-Yo Financing Scam
The dealer sells you a car and allows you to take it home
immediately. You finance your car through the dealer, but a few
days later, the dealer calls and tells you that your financing
has fallen through. You are then told to set up new financing
through the dealer, at a much higher cost to you, and a much higher profit to them. Avoid this at all costs! If you have bad
credit, don't finance at the dealer. Arrange your own financing.
If you finance through the dealer, never drive off your car
immediately. You should wait at least 24 hours before taking
your new car, so as to make sure financing is complete. This
allows the dealer no way to play the scam on you.
Scam 2: The Window Etching Fee
This is one of the most ridiculous but common scams I've heard
off. Basically the dealer offers to window etch your VIN number
in the window of your car for you, at a price ranging from $300
to $1000. Some people have tried to talk down the price, and
they often succeed, but the dealer still makes a few hundreds
off you. The easiest way to solve this problem? Just purchase a
do it yourself window etching kit at any decent auto parts
store. It only costs $20.
Scam 3: The Dealer Preparation Fee
The dealer charges you a preparation fee to prepare your car.
Some often charge an outrageous $500 or more just to peel off
the plastic protection on the car, test drive the car and put
in the fuses. Most MSRP stickers indicate that these costs have
already been covered by the manufacturer. In fact, some car
dealers permanently print it on the buyer's order to make it
seem mandatory, but one way you can get it removed is by
telling the dealer to add a credit (of the same amount as the
dealer preparation fees) on the next line. If they refuse to do
so, you should simply walk out of the dealership..
Scam 4: The Market Adjustment Fee
In this scam, the dealer tells you that your car is a really
popular vehicle, and so to sell you the vehicle they have to
add "Market Adjustment Fees" of several thousand dollars. This
amount is usually indicated on an orange sticker next to
manufacturer's MSRP sticker. A car may be popular, but if it is
in stock, it is not worth paying extra for it. Many buyers,
especially trade-in buyers, have been ripped off before. They
focus only on what they get for their old car, and so they
don't see the big picture. They may get an extra few thousand
for their car, but they don't notice that they are charged a
much higher Market Adjustment Fee. The dealer sells the car,
gets the trade-in, and makes an extra off the buyer. Never pay
more than the manufacturer's MSRP.
Scam 5: The Extended Warranty Scam
The Extended Warranty scam is quite old but it is still in use.
And many people still do fall for it. Basically, when you take a
loan on your car, the dealer will say that you have to purchase
an extended warranty because the bank requires it for the loan.
Avoiding this scam is very simple actually. Tell the dealer to
write down in black and white that the extended warranty is
required for the loan and they'll most probably find some
excuse to remove the extended warranty. If they refuse to do
so, then please do not buy from that dealership. Actually, the
extended warranty is a great thing to have, but don't ever get
it from the dealer. You can get far better deals elsewhere,
especially online. Don’t get ripped off by car dealers!
Author: Pete Lance is the founder of a premier company which helps consumers save money on gasoline.