New Car Buying Scams
Unfortunately, new car buying scams exist; dealerships are out to make money, and not all of them are honest in their practices. However, with a little research and patience, you can avoid these car-buying scams and get into the best vehicle for you and your situation.
To guarantee our customers do not experience any of the following scams, TriState Auto Champs uses a detailed vetting process to determine which dealerships have an opportunity to earn our customer’s business. To avoid all of the following car buying scams please contact us by phone at 203-529-1343 or via email at firstname.lastname@example.org.
Sometimes, dealerships make trade-in vehicles “disappear” within the hustle and bustle of paperwork. What this means is you are not getting any credit for your trade in vehicle and the dealership is actually buying it for free. Before signing any contracts, make sure your trade-in value is reflected in the final documents; it is supposed to be shown as an amount applied to the overall negotiated new car price.
Push, Pull, or Tow
A type of trade-in scam, the “push, pull, or tow” scam occurs when dealerships advertise a guaranteed price on all trade-ins. The issue with this guarantee is that the money put towards your new car purchase from the trade-in actually comes from incentives and rebates you are already qualified for and can put towards your car without a trade-in vehicle.
Essentially, you are giving the dealership your old car for free.
Negative Equity Scams
When you have “negative equity,” it means you owe more on the car than it’s worth. Some dealerships advertise that they’ll pay off your trade-in vehicle, even if you have negative equity. However, often the reality is that they roll the negative equity into your new loan, essentially having you paying for both vehicles and leaving you with even more negative equity.
Four-Square Diagram Scams
The “four-square diagram” represents the:
1.New car price.
2.Trade-in vehicle value.
3.New car loan monthly payment.
Generally, dealers use this diagram to figure out what kind of buyer you are. Once they know which of the above you are more concentrated on, they will work to make that specific number sound appealing to you, but raise all the other numbers. The four square diagram is designed to be deceptive so the car salesmen is the only one that understands what is written down.
Protect yourself against this car buying scam by doing some research and then walking on the lot knowing:
- How much the new car is worth.
- How much your trade-in vehicle is worth.
- Your credit history and score.
- Your financing options beyond the dealership.
Dealer Addendum Scams
Simply put, dealer addendum scams occur when a dealer adds additional items to the cost of the car such as fabric protection, VIN etch or paint sealant without telling you. Then, during the negotiation, you think the dealer is giving you a discount but they are really removing items you didn’t know were added to the car.
Another term for this is “profit padding.” Unfortunately, victims of profit padding think they are getting a good deal when in actuality they are paying the original sticker price minus the products that were added without their knowledge.
Poor Credit Score Scams
It’s simple: Know your credit score before you go car shopping. If you have a poor credit score (or the dealer says you do), you’re at risk for being talked into higher down payments and possibly even higher monthly payments.
Protect yourself against this situation by ordering a copy of your credit score from one or all of “The Big 3″ trusted credit agencies (Equifax, Experian, and TransUnion) so you’ll know exactly what you’re working with and won’t have to take the dealer’s word for it.
Know what you can afford before shopping. You can do this by:
- Researching the price of the car.
- Use a Car Buying Concierge
- Determining how large a down payment you can make.
- Negotiating an interest rate you can afford.
- Deciding how long you want to pay for the vehicle (the “auto loan term”).
One Day Only! Scams
Unfortunately, dealerships use this scam to take away from the time you could be using to research a vehicle before you purchase it.
While rebates and incentives can have hard expiration dates, generally the deals offered on 1 day only sales are deals you can find on any other date. We get our clients the best price guaranteed throughout the calendar year.
Additional or “Forced” Warranty Scams
Some dealerships claim you must pay for additional warranties, stating they’re required by the bank to lower their risk of loaning to you, but there are experts who point out a bank wouldn’t charge you additional money to lower their risk of already loaning money to you.
Simply put, never be forced into extra warranties, and always read the fine print before signing the final paperwork.