Car Financing Scam
When trading in your old car to offset the price of the new vehicle, the dealership finance manager will tell you that your interest rate is good, and allows you to take the car you were after – and we are all friends.

After a small amount of time, maybe a week or two – this of course gives you time to get attached to your purchase, you get a call from the finance manager, telling you that you didn’t qualify for the original  interest rates, agreed to upon making the original purchase deal.

Every new vehicle purchase has a clause in the contract that usually states that the deal is “subject to loan approval.” This is the finance manager’s loop hole for hitting you for more money. Contractually, this indicates that the deal is yet to be finalised, even though you have already taken the car, use it as if it is solely yours, and have signed the contract.

The dealer can then charge you $1000 or more in finance fees and up your monthly payments by $50. This scam is made more plausible by being applied people with bad credit, or a history of such. If you are wondering why they would sell you the car at 6% APR if they knew you had bad credit ( having already run a credit search in your name) the answer is simple; to sell the car.

If you know that you have bad credit, this kind of scam can be avoided, by not financing the car through the dealership.
In the case of bad credit, or credit history, applying to a credit union and financing the car yourself, is the more prudent way to go. When buying a car, the deal should be made on the ticketed price of the car, not on the monthly payments.

The Dealer Preparation Scam for New Cars
To begin with, this cost is not only legal but fairly common practice. It is still referred to it as a scam, because it is merely another unnecessary way for you to end up paying more money to the dealership for the vehicle.

Primarily, the dealer will tell you have to pay an extra $500 to cover the labor costs of the dealership’s 5-point inspection. This means you are paying for the time it took, if indeed any time “was” taken, for the dealership to make sure that the car wouldn’t fall to pieces as soon as you drove it out of sight of the car yard.

You are paying for the labour involved in removing plastic from the seats etc, cleaning the car inside and out, and making sure that all of the fuses and fluids are actually there and the vehicle is ready to go. When factories deliver new cars to dealerships, the cost of delivery and preparation is already covered, so basically you are paying the dealership for work that they haven’t really done – and probably will not do in any case.

This ripoff can be avoided, by simply asking the dealership to add an extra $500 credit to the deal, that way at least it is not your money. If they refuse, the decision is then up to you as to whether or not the car is worth the money. If it is great; buy the car, if not; go to another dealer that will remove the dealer preparation costs.

Forced Warranty Scam when Buying a Car
This is when the dealership finance manager tells you that you are not eligible for the loan by the bank unless you pay an extra $2000 for an extended 2-3 year warranty. This scam is just dumb. Basically the dealership finance manager is telling you that the bank thinks you cannot be trusted to pay back their $20,000 loan for the car, but they will trust you if you pay even more money. That’s just stupid.

This scam can be avoided if you can force them to put it in writing, that you “have” to pay the extended warranty in order to get the loan. That way you can bring a copy of the contract to your local State’s Attorney’s office, or lawyer, to verify that the deal is valid. The dealership finance manager will change his tune pretty quickly, guaranteed.

The VIN window etching scam
VIN means: Vehicle Identification Number, and Window Etching, is a where  your VIN is actually etched onto one of the windows of your car, as a security measure in case of theft, or ownership dispute of your vehicle. Basically a dealer will charge you $300-$900 for window etching and they will tell you that you have to pay this to get the loan, because the banks insists on it – this is an out-right lie.

Some dealerships might tell you that the etching is free and then go and add the cost to your monthly payments, to make up for it. The best way to avoid this scam is to force the dealer to put it in writing if they say that the etching is free. Then again, you can etch the car yourself. You can get an etch-it-yourself kit from Vinshield for $19.95 or just don’t buy the car.

Remember a lender doesn’t require that you purchase any extras on a car. All the lender cares about is that you can make your payments on time regularly. Don’t buy into it.

The Credit Score Scam
This scam is ridiculous at best, and is tried on everyone; good or bad credit. This is when the dealerships finance manager informs you that your credit score is lower than it really is so that they can get you for higher interest rates.

This scam is easy to avoid. Just get your own copy of your credit report from Equifax, or somewhere similar, and bring it with you when you go to purchase a vehicle. It is really difficult to lie to you, to your face, about your credit score, if you have your own copy of it. If your documents and theirs don’t match, go somewhere else because that particular dealership is lying to you.