Forced Credit Application Scam
If you expect to pay for a car outright with cash, or with a bank draft or check that is your right and ultimately a sensible approach. Some dealerships will not let you. They are trying to get you into paying monthly terms, which of course means more money for them.

Some statements you may hear include:

“State laws require that you must fill out a credit application before I can sell you this car.”

“Everyone that buys a car from us fills out a credit application first.”

“It’s the company’s policy”.

If you are presented with any of these lies, you now know what’s going on.

When you are paying cash why would you think that you need to fill out a credit application? Not only does it not make sense, no state will force you to apply for credit when paying cash. Would you fill out a credit report if you want to buy a sofa or groceries while paying cash? To avoid this scam, just laugh in their faces and take your business elsewhere.

Sold “As Is” Used Car Scam
This is when a car dealership will sell you a “completely refurbished” car, omitting to tell you that the car has been in a major accident. Basically, the dealer has been saddled with this wreck, used as a trade-in, and just wants to be rid of it. The vehicle in question will have an “as is” sticker on it, and that no warranty is included with your purchase. This is the dealer’s way of telling you that you are assuming all risks for the car, and apart from the fact that it is not under warranty – you cannot bring it back and complain.

Dealer Mark up Scam
Apart from being totally unnecessary, this car dealership fee is charged for no reason other than money-gathering. This fee is seen on the orange sticker marked on the manufacturer’s suggested retail price (MSRP), and is a result of expecting money for no other good reason, other than the fact that they want money for nothing.

This sort of fee is generally comprised of -  anything that comes to the dealer’s mind and worded as such to confuse the unwary.

Asking the dealer to remove it, is up to the individual car buyer and probably a waste of your time, certainly a daunting task, when confronted with a seasoned car salesman – any dealership employing this sort of add-on fee tactic, already has a prepared patter designed to baffle any questions.
If the dealer cannot adequately and clearly state just what is entailed in these extra charges, take your business elsewhere.

Payoff Your Loan Scam
A fairly common sales strategy with some car dealers,  will be them offering to pay off the balance of your current car loan, no matter how much money you still owe on it. There will always be some buyers, upon hearing this, that think the purchasing of a car with a new dealership, somehow now means they now owe no money on their current car.

Er, no.

The reality, is that the dealership does in fact help you get out of your current contract; however, they are not going to tell you – that breaking the lease agreement with your old dealership, will now make you responsible for paying a high increase in  your fees to make up the difference. You also will not be able to refinance for a new car until those fees are paid. Under the pretext of doing you a favour, the dealership will offer to add the cost on to your new contract with them. At a substantially higher rate, of course.

The dealership only agrees to this deal because they want to get more money from your current car. They will also give you far less than your car is worth on the trade-in. This scam works well, for them, because they will increase your monthly fees, and then, sell your trade in for more money than its worth – certainly more than they afforded you.

These kinds of dealerships, will then quietly extend your monthly payments so that it appears to you, that you are paying a smaller than expected monthly repayment, without even realizing that you have in fact committed to an extra year, of repayments.

Avoidance of this scam, requires that you continue with your current lease contract until it ends. If you are really determined to get a new car, then you should try selling your current car privately. Just sell it outright so that the buyer just assumes the lease payments.

Bouncing Check Scam
This is when a car dealership announces to you that they cannot accept your bank draft, because your particular bank is always bouncing checks, so often in fact that they now refuse checks from your bank. This then gives them an opportunity to get extra money from you, by offering to sell you a car at a higher interest rate, due to the contrariness of your bank.

You can avoid this scam by getting your drafts from Capital One Auto Finance. Capital One Auto Finance is in the business of giving car loans, so these checks don’t bounce.