This is a very simple scam which involves the finance department of the car dealership telling you that your credit rating is much lower than it actually is.
I know it’s hard to believe, but there are some dealerships that will try to mislead you by telling you that your credit rating is bad when it’s actually quite good. Yes, they are lying to you about your credit score and hoping that you don’t know what it really is. You could have good or bad credit to be fooled on this one. It doesn’t matter how good your credit rating is if you don’t know what it is. If you do know your credit rating and a car dealership tries to pull this on you it won’t work. If you don’t know how good your credit rating is when you go to the dealership they may be able to con you into thinking you are a credit risk and you could pay through the nose for it.
Here’s how car dealerships tries to fool you
At the car dealership when it comes time to fill out loan financing paperwork when you are done the financing people have anxious expressions on their faces when they tell you that your credit score is dangerously low. Sadly, you will have to pay a very high interest rate in order to qualify for the loan and they are just awfully sorry about it. Most consumers, who see the 0% financing deals on TV, expect to receive them. However, the dealership wants you to pay 9% because they’re banking on the fact that most people don’t really know what their credit rating is for sure. If you do know and you question what the dealer is telling you, they will almost certainly have excuses ready. Don’t fall for it because a credit rating is a credit rating is a credit rating.
Your credit score means the same thing no matter what you are purchasing. Someone that knows how good their credit rating is would question this immediately. If the auto dealership’s finance people try to con you by telling you credit scores don’t always mean the same thing or some equally ridiculous hogwash you should suspect that something’s up. Just watch the expression on their faces change when you let them know that they are lying to you!
Protect yourself by knowing your credit score
Everyone should know what their credit is like before purchasing a new or used car from a dealership. Failing to know something like this is like going unarmed to a gunfight. If the car salesman knows your credit score and you don’t and they know that you don’t know you can be sure that they will use that against you. Your best bet is to secure financing before you go shopping for a car. You will not only get a better interest rate but it’s far less likely that the car dealership will try to take you for a ride. If you do find yourself at a car dealership and they try this scam on you let them know that you are fully aware of what your credit report is or just leave. There are plenty of honest car dealerships out there with sales people that won’t try to take advantage of you. Don’t give them a second chance because if you do the chances are good that they have another scam they’d like to try on you.
What to do if you think you’re a victim of this scam:
If you think that you’ve been the victim of an auto financing scam you should immediately report the car dealership to your state’s Attorney General Office. You should also contact the Better Business Bureau to report a dishonest dealership. You can also try to find better financing and get a better interest rate as fast as you can. Going from 18% to 9% could mean savings of hundreds of dollars a month and save you thousands over the term of the loan.