November 21, 2017
 
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Car Dealer Tricks and Scams – Part Three

As you know, consumers shopping for a new or used car need to be very cautious and protect their wallets throughout the entire process. Most of us are probably prepared for the typical tricks salespeople try in order to increase their profit, but what about the serious scams they employ that really cause consumers to get bad credit?

Credit and Financing Scare:
Once you’ve found a car, the salesperson will hook you up with their finance manager to pull your credit report and set up the loan. Be prepared for them to “tweak” the numbers. They may tell you your credit score is too low to get the advertised rates. They might “reluctantly” tell you that your credit report could be better so you’ll have to settle for a higher interest rate. In addition, they can put the pressure on for you to sign right away, stating that the interest rate will probably increase the following day—the “lock in” now pressure. There are so many factors to look at when it comes to financing. Don’t just look at the monthly payment—consider the down payment, the loan term, and the interest rate. If you want to avoid becoming the victim of their scare tactics, know what is on your credit report and know what your score is. Better yet, order your copy several months in advance to make sure it’s accurate and to correct any errors you find.

Overpriced Insurance and Sneaking in Worthless Add-ons
There are good deals out there if you’re careful, but any gains you make can easily be surrendered if you end up buying unnecessary insurance and worthless add-ons.

Some dealers will really put on the pressure for you to purchase extra insurance. These offers are never good for your wallet as it may potentially cause several credit problems for you. For example, gap insurance will cover the difference between what the car is worth and the amount you still owe on it in case the car is totaled or stolen. They may also push credit life, which will pay the balance of your loan if you die before the loan has been paid in full.

Other extras you need to look out for are pre-paid maintenance plans, rust proofing, fabric protection, wax protection, VIN etching, and extended warranties. These amenities add very little value and are meant to increase dealer profits nothing for the car buyer except the bad credit. Some car buyers want these extras, or think they need them, but most consumers want the opportunity to say “no.” Some dealers have even gone so far as to tell customers with bad credit that if they don’t get the extended warranty then they can’t get the financing. To avoid paying for unwanted extras or overpriced insurance, read the contract before signing anything. If you notice something was added into the paper work, ask for it to be removed. If they tell you that it’s included, ask to see the price without it.

 

 

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