Used Cars Auto Dealer

Used Cars USA

The reason why many used cars auto dealers have a bad reputation is sometimes because they deserve it. You need to know about some of the scams that are used by auto dealers to earn this reputation. What is interesting is how many scams have come out into the open from whistleblowers inside the car dealer sector who are tired of their industry's reputation and know that only by exposing scams can the improvement process start.

The stories are many. There is the car dealership who persuaded a husband and wife in Florida to pay about $600 extra to buy a car care maintenance scheme that they simply didn't need. Then there was the car dealer who checked a customer's credit without her approval even though she wanted to pay cash for her new vehicle.

Auto dealers have also been inflating the cost of warranties and also reporting a set of numbers to the customers and another set of numbers to the bank and putting extras into contracts that the customer hadn't agreed to pay for. Customers are very vulnerable to profit making schemes of auto dealers because there is a flurry of paperwork and the size of the purchase is massive and the financial deals are complicated.

One whistleblower reckoned that the schemes that he used during his career have bilked customers out of about $33 million. He revealed that there are opportunities to defraud customers at almost every step of the process.

For instance, the man who ran a credit report without the customers permission used her driving licence during the test drive, because at the negotiation stage he would be able to use the information he found (if he knows she can't get credit then he doesn't have too move so much on the cash price).

Where dealers can really fleece customers is during the financing process. If the dealership is arranging the financing instead of the independent lender or bank then they can do things like insisting that a higher interest rate from a bank with which they have their relationship is best for the customer.

There is a technique called “leg”. The monthly payment is negotiated so that the customer is paying a monthly payment slightly above what is needed to pay for the vehicle and then stuffs the contract with additional products so that the higher monthly payment is justified. Often customers aren't aware of the maintenance contracts and extended warranties they have paid for.

Then there is “etch” where the dealer asks for about $1000 to etch the VIN on the windscreen of the car saying that it will help in security if the car is stolen. This is simply not necessary. Be aware and alert!

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