How to Avoid Getting Scammed by an Automobile Dealer


No one wants to get scammed when buying a car. To ensure it does not happen to you, check out the following helpful guide to common automobile dealer scams.

The Bait Scam

Automobile dealer scams can be wide-ranging. The dealer may simply use unscrupulous methods to get you to buy a higher-priced car than you wanted to purchase or the dealer could actually commit fraud.

For instance, he or she could fail to reveal the true condition of a vehicle or tamper with the odometer to reduce the mileage.  Or, a dealer may know that the car has diminished value because it was in an accident but not convey this knowledge to you.

In the meantime, brush up your knowledge on some of the most common scams that are used by automobile dealers so that you can avoid becoming a victim in the first place.

First off, as mentioned above, you could end up paying more than you wanted for a car.

The way the scam works is like this. The dealer advertises a car at a great price. When you turn up at the dealership, the dealer tells you the car has sold. The dealer then entices you into buying a more expensive car.

To avoid the scam, call the dealer before turning up at the showroom to ensure the car is in stock, and never be persuaded to buy for a higher price when you want to stick to your budget.

The Low-Price Trade-in Scam

Another common scam pertains to trade-ins.

It goes like this. The dealer gives you a very low quote for your trade-in. In fact, it is ridiculously low. The dealer is testing the water to see how much of a sucker you are. If you do not accept the very low offer, the dealer will up the price gradually.

But because the dealer has started at such a low price, the top price he or she offers can sound like a good deal when it is actually still lower than your trade-in car is worth.

Shop around with multiple dealers to avoid this scam and find the best price for your trade-in vehicle.

The Contract Scam

When there are mistakes in the contract, pertaining to things like loan terms, the purchase price, and the down payment, and they work in the favor of the dealer, it is more than likely that those errors have been made intentionally to get more money out of you.

So, always read the contract thoroughly and ensure there are no discrepancies between what the dealer verbally tells you and what is written down in black and white.

The Title Washing Scam

Some dealers sell salvaged vehicles via title washing.

That means salvaged cars that have been title washed after major disasters like floods have their history hidden. The vehicles are transferred to another state that does not recognize the salvage brand.

To avoid being a victim of this automobile dealership scam, use tools like Autocheck and CarFax to view the full history of vehicles, because even with title washing, computer records and title transfers remain accessible.

The Four-square Scam

One of the most common scams used at automobile dealerships is what is known as the four-square method.

It basically works by combining four transactions into one to provide the dealer with more money than the four transactions would be worth separately.

Dealers will mix the price of the vehicle, the trade-in value, the down payment, and the monthly payment into one transaction to confuse buyers into thinking they are getting a good deal.

To prevent this scam, always handle each transaction separately and do not get coerced into not sticking to your guns from some sly salesperson.


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