The internet makes it easy to research the quality and safety of cars. Moreover, buyers can also check to see if the dealer has bad online reviews. Despite all this information available, there are still scammers out there trying to sell a motor vehicle to an unsuspecting buyer fraudulently. Considering the cost of the average car these days, this can mean the loss of tens-of-thousands of dollars.
Most dealers and sales are ethical and responsible, but there are a few bad ones out there. Common ploys used by these fraudsters include:
- Bait and switch: The car may have a listed price, but the price on the contract may not match up with the sticker, perhaps because of various fees that were not previously mentioned.
- Packing the contract: This involves adding on extra service packages and warranties, or additional accessories or options that were not part of the initial agreement with the salesperson.
- Advertising a loss leader: The dealer may advertise an extremely low price on a vehicle, but buyers may find that the car was “sold” even if the buyer is first in line when the doors open the next day. Sellers then try and talk buyers into a more expensive model.
- False credit scores: The dealership may try to trick a customer into believing that she or he has bad credit by using an incorrect credit score
- Trade-in fraud: Good dealers may give credit on a trade-in that higher than the actual worth of the old vehicle, but bad ones will do the opposite by low-balling the value of the vehicle.
- Yo-yo sale: The buyer signs the contract and takes the car home, only to be called the next day by the dealer who informs the buyer that the loan did not go through. They then offer the loan at a higher interest rate with a larger payment. Dealers can cancel a deal if financing falls through, but they should not try to renegotiate the original contract.
Buyers do have legal recourse
A car buyer has state and federal protections from sellers who are not honest. Those with questions about the nature of their transaction or the vehicle may wish to speak with an attorney who handles Lemon Law matters here in California. They can review the sale and determine if the buyer is owed a refund or other compensation.