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Buyer Beware: Common Auto Dealer Scams

No one is trying to say that auto dealers are bad people, criminals, or all wear polyester leisure suits. They are in business to maximize profits so that they can stay in business. So, occasionally, how they word something may sound more beneficial than it really is. Here are a few things that dealers will try to do to get you to buy things that you can do without.

  • Extra features…rust-proofing, fabric protection, new tires, windshield etching. All of these can be bought after you leave the dealership for less money. The dealer will be adding the cost of these items to your loan if possible, so why pay interest on top of a higher price?
  • Search for auto loans online. Going to the dealership unprepared and without financing is an easy way for a dealer to pad an invoice is by leading you to believe that you did not qualify for the best interest rate. It is in your best interest to get financed before you walk onto the lot. ”Four out of five car buyers finance their vehicle through the dealership, and odds are they’re paying too much”, says Mukesh Chatter, chief executive of MoneyAisle.com, an online auction site for auto loans. ”A mark-up of 2% to 4% is standard in the auto industry.”
  • Never tell the dealer how much you can afford per month…they will try to get you to accept a longer term loan that will cost you more money in the long run. That is how you end up paying $25,000 for a $15,000 car.

While leisure-suited liars are no longer the norm in auto sales, you have to be wary. Any deal that sounds to good to be true, is. Remember, the dealer is in the game to get as much of your money as possible. You are in the game to prevent that.

About the Author

The author has many years of experience in automotive finance and insurance. However, each consumer's situation is unique. It is best to contact a finance specialist for further assistance.
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