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Fraud Tip of the Day - June 6

How to avoid car dealer scams

Don't set foot on a car dealership intending to purchase a new or used car until you read our tips on how to avoid car dealer scams. You'll know what to expect from the sales staff and could end up with a better deal.

Get pre-approved for a car loan before you step on the lot. This can save you a bundle. Odds are you'll get a better interest rate and having your own financing reduces your chances of getting scammed by a car salesman. If you can't get a loan, you'll already know it. If you can get a loan, you'll know how much you can borrow and this will tell you how much car you can or can't afford.
Do some research before going to the dealership. Do some research on the web or find another way to gather information about cars you're interested in. Don't go to a car dealership with the vague idea of wanting a new car. Choose some makes and models you're interested in and find out as much as you can about them including:
- Total Cost of Ownership - Maintenance, gas mileage, taxes, value depreciation etc. You don't want to buy a car you can afford to drive off the lot but can't afford to maintain.
- Pricing - If there are a lot of dealerships for you to choose from, find the one with the best deal. This seems obvious enough but many people don't think about driving 15 minutes across town to save $300. You should also find out the sticker price. This will tell you just how low the salesman is willing to go. If you know that, make an offer, and refuse to budge, chances are the salesman will find a way to make it happen. Their job is to sell cars.
- Extras and Options - Know which additional features are offered and which ones you're interested before you go to the dealership. Don't let them convince you into adding more than you want or need. Some of them may sound nice to have but they're not free and can cost you a bundle.
Don't negotiate based on monthly payments. One of the first questions a car salesman will ask you is, "How much can you afford to pay each month?" This sly question, if you answer it, will determine how much the car ends up costing you. If a car would have cost $300 a month but you let them know you can afford as much as $350, you can bet they'll find a way to arrange things so that it ends up costing you $350 a month. This is one reason why it's so important to enter into negotiations with your car loan pre-approved.
Don't allow your trade-in to influence your new car's cost. This is one of the many ways car salespeople will try to fool you. If you let them talk about your trade-in in relation to the cost of your new car, they'll come up with some confusing combination of numbers that will end up costing you more money. An example is giving you a lot more for your trade-in than you'd expected but adding this to the final cost of the car to "get the manager to sign off on the deal." You end up paying more interest which could end up, over time, eating away the value of your trade-in!
Be willing to walk away. Remember, you're in the driver's seat. If you don't think you're getting a fair deal or something seems out of whack or you feel you need time to think things over, just get up and go. You don't have to be impolite, but don't get pushed or bullied into a bad deal. You might be told that the offer only lasts so long, then so be it. There will be other cars and other offers. Some of them a whole lot better. Cars are expensive and you could end up driving it for yours so take your time and don't let your emotions get the better of you.

More Car Dealership Scam Resources

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Car Dealership Scams