The Car Buying Guide for Extreme Savers







Ultimate List of Car Buying Scams

Thinking of buying a car? Then you're probably like most consumers - afraid and anxious about being ripped off. Consumers in the U.S. lose over $30 billion each year to car buying scams, many of which are easily avoidable. Over the last several years, I've been researching how car dealers work and have documented over 110 scams and tactics used throughout the industry. Not all car dealers are bad, but it can be difficult to figure out which ones are really honest. My goal is to expose the tricks used by the worst offenders so you don't end up becoming another victim.

112 Scams Sorted by Category

Note that I've assigned a "Danger Level" for each scam, ranging from a scale of 1 to 10 (10 being the most dangerous). The number reflects a combination of how costly, common, and likely it is for consumers to fall victim to the scam.


    New Car Buying ScamsBack to Top

    Danger Level 8
  1. Confusing Window Stickers
  2. Dealer displays a "dealer sticker" next to the official MSRP. It will look official, but the only purpose is to fool buyers into paying more for the vehicle.The dealer sticker will include options that were installed AFTER the car arrived from the manufacturer. They're usually worthless and some aren't even options at all, but simply made-up charges. For example, you might see things like "Special Value Package" which includes fabric protection, or charges labeled ADP or ADM. Those stand for "Additional Dealer Profit" and "Additional Dealer Markup". They are completely worthless!
    Learn how to spot a fake dealer sticker

    Helpful Links:
    How to Spot a Fake Dealer Sticker
    Danger Level 7
  3. Useless Add-Ons
  4. Most dealers will try to sell you useless but highly profitable add-ons such as paint protection, fabric protection, VIN etching, undercoating, rust-proofing.
    There are only a few add-ons you should consider buying such as extended warranties and GAP insurance. Most others are useless.
    Which Dealer Add-ons are Worth Buying?
    Danger Level 7
  5. Charging Deposit to "Hold" the Vehicle for You
  6. Dealer tries to get a deposit to "hold" or find a car for you. This is usually done on high demand, low supply vehicles that are hard to find. The only time a dealer should legitimately ask for a deposit is if they're doing a dealer trade on your behalf.
    Don't leave a deposit unless you've asked the dealer to do a dealer trade. If you agree to leave a deposit, make sure it's fully refundable.
    Danger Level 6
  7. Hiding Dings, Scratches and Other Flaws
  8. Dealer lots can have lots of tight spaces which can easily result in accidents, scratches, and dings on a new vehicle.
    Always inspect a new car for damage before driving off the lot.
    Danger Level 6
  9. Stealing Your Rebate
  10. Sometimes manufacturers offer multiple consumer rebates and incentives on one model and car shoppers may not be aware of all of them. This creates an opportunity for dealers to take advantage of this lack of information and keep some of these rebates for themselves. They can get away with it because manufacturers don't audit every single sale.
    Call two or three local dealers and ask them to list all the rebates and incentives on a particular model. Make sure they all list the same incentives.
    Danger Level 5
  11. Negotiating on "Wrong" Vehicle
  12. Dealer will mislead consumer by giving pricing on the wrong vehicle. For example, you may think you're negotiating for a 2013 model, turns out the dealer was negotiating based on a 2012 model.
    This could be a legitimate error on the part of the salesman, but if you suspect they're doing it on purpose, take your business elsewhere.
    Danger Level 5
  13. Switching from New to Used
  14. Watch out when a salesman tries to switch you from a new car to a used car or vice-versa. It's usually because that particular vehicle has been stagnating on the lot and likely comes with a bonus if he can get rid of it.
    Never make a last minute purchase decision on a vehicle. You should take the time to properly research any vehicle you're thinking about buying.
    Danger Level 5
  15. Rebates Good Only at MSRP Price
  16. Dealer will try to convince you that cash back rebates from the manufacturer are only good if you pay MSRP for the vehicle.
    Manufacturer rebates are independent of whatever price you negotiate with a dealer. Don't allow them to factor in rebates when negotiating the price of the new car.
    Danger Level 4
  17. Failing to Include Promised Equipment
  18. Failing to include promised equipment in purchased vehicles such as navigation systems, floor mats, etc. This could simply be an error on the dealer's part, but they have been known to do this on purpose.
    Thoroughly check to make sure the vehicle comes with all agreed options and equipment before you leave the dealer lot.
    Danger Level 4
  19. Tricking You Into a Lease
  20. You're looking to buy a car, but the payments are too high. Salesman says, if we can get the payments lower with no down payment, will you buy today?" The problem is, they are putting you into a lease instead of a purchase. Some buyers stumble into a lease without being aware of it. The salesman may call it a balloon payment.
    Pay attention to the agreement and make sure you are not signing a lease. This scam works on people who simply aren't paying attention.
    Danger Level 3
  21. Failing to Disclose Previous Repairs
  22. Dealers are not required to disclose repairs on new vehicles if the cost to repair was less than a specific amount - usually less than $1,000. Accidents happen often on the lots, the cars are fixed in the dealer's service department and never disclosed to the consumer.
    You need to inspect for damage, even if the vehicle is brand new. Accidents happen all the time on dealer lots.
    Danger Level 3
  23. Including Rebates in Negotiated Price
  24. Dealer will quote you prices with rebates included, making it seem like the price is lower than it really is.
    Negotiate and compare car prices with rebates excluded

    Used Car Buying ScamsBack to Top

    Danger Level 9
  25. Curbstoning
  26. "Curbstoners are car dealers that pose as private individuals in order to defraud consumers or skirt the FTC rules pertaining to selling used cars. They will post ads in various classified sites such as Craigslist and pretend to be the owner just trying to sell their vehicle. You may be thinking this is harmless, but these curbstoners are not only breaking the law, but are usually selling vehicles with hidden problems that can affect its safety and value. They usually sell vehicles that no reputable dealer would touch. Some even go as far as selling a car that's been totaled and had its title registered in another state to hide the fact. "
    First, always make sure to get a Vehicle history report (keep in mind this is not fool-proof). You also need to ask to see the seller's driver's license along with the car's title. If the names don't match, don't buy the vehicle.

    Helpful Links:
    Curbstoners and Internet Scams
    Danger Level 8
  27. Escrow Scam
  28. This scam tricks you into thinking you're sending money to a legitimate escrow company when in fact it's just a fake web site run by the seller. The seller usually lists cars at too good to be true prices and usually has a good story behind it. Sometimes they claim to be military personnel overseas and need to get rid of the vehicle quickly. They ask you to send money, usually through Western Union or MoneyGram to this fake escrow company. Once you do, they take the money and run, never to be heard from again.
    Don't ever send money through unsecured payment networks such as Western Union. If you need to use an escrow service, use escrow.com which is a trusted resource.
    Danger Level 8
  29. Title Washing
  30. Hiding the history of a vehicle that's been salvaged, usually due to flooding. Title washing is common after major disasters like floods and hurricanes. The title is "washed" by transfering a salvaged vehicle to another state that doesn't recognize the salvage brand.
    Use CarFax and Autocheck to see the history of the vehicle. Title washing does not get rid of computer records of title transfers.
    Danger Level 7
  31. Odometer Fraud
  32. Digital odometers, which were thought to be less susceptible to tampering, can be even easier to manipulate. Unscrupulous people are reprogramming digital odometers using relatively inexpensive software and devices made for legally recalibrating faulty odometers. NHTS estimates that consumers will lose billions of dollars to odometer fraud each year and up to 1 in 10 used car sold may have had their odometers tampered with.
    Compare the mileage on the odometer with the mileage indicated on the vehicle's maintenance records and get a free CarFax odometer check.
    Danger Level 7
  33. Fake Certified Used Cars
  34. True certified used cars are sold ONLY through franchised dealers. They have gone through a manufacturer backed multi-point inspection process and usually come with some sort of extended warranty. Certified used cars come with a price premium - usually at least $1,000 over their non-certified counterparts. This creates an attractive opportunity for unscrupulous car dealers. They figure if they slap a certified sticker on a used car, they can sell it for more - and many do.
    This trick is usually pulled off by independent used car lots that are not affiliated with any manufacturer. Only franchised car dealers can sell legitimate certified used cars. Make sure to verify that it's a manufacturer backed program and not just a dealer certification.
    Danger Level 7
  35. Fake Lowball Price
  36. Dealer gives you an extremely low price quote on a used car over the phone, encourages you to shop around to see if any other dealers can match it. Nobody will, when you get to the car lot, they say, let me make sure I can get this price approved by the manager. Of course, they can't, so they try to wear you down. Basically, this scam is used primarily to get you to come in to the store.
    If the price quote sounds fishy, have them email you a signed purchase order with the car details and price quote clearly stated. If they try to pull this scam, you'll have their promise in writing and a potential bait-and-switch penalty from the State Attorney General's Office.
    Danger Level 6
  37. Misleading Pricing Guide Values
  38. It's a well-known "secret" that car pricing guides are oftentimes error-prone in the dealer's favor. The common consumer guides are not the same ones dealers use. They're often out-dated and not very specific when it comes to local market conditions. Dealers will take advantage of this by advertising prices "below blue book value".
    There really is no fool-proof way to gauge the true market value for any vehicle, so use the pricing guides as a ball-park figure. You need to shop your vehicle to multiple dealers to get its true wholesale value.

    Helpful Links:
    Pricing Guides May Not be Accurate
    Danger Level 6
  39. Psychological Tricks
  40. A common method dealers use is to get you to diminish the value of your vehicle by using psychological tricks. They'll have you walk around the car with them as they point out every single scratch, ding, dent, and worn out part. They may utter some comments under their breath - just loud enough for you to hear and make you question the value of your vehicle. When starting the vehicle, they may pretend to hear a weird noise. Their methods are all designed to prepare you for a low-ball offer.
    Just realize what's going on, and stick to your guns. Use my negotiation techniques and don't worry if they try these tricks on you. As long as you shop your trade-in to multiple sources, you will minimize your chances of being ripped off.

    Helpful Links:
    How to Sell Your Trade-In
    Danger Level 6
  41. Auction Not Honored
  42. This happens regularly on eBay. Dealer puts car up for no reserve auction, gets less than what they want for it, then refuses to sell the car to the customer. This may sound weird, but eBay sellers are not under obligation to actually sell the cars.
    If this happens to you, submit your story to Jalopnik.com, which loves to shame these dealers, and usually results in the customer eventually getting the deal completed.

    Helpful Links:
    Jalopnik Story on Failed Auction Sale
    Danger Level 6
  43. Masking Engine Problems
  44. If a used car has engine problems, putting diesel fuel or diesel oil in the engine can mask the problems temporarily. Diesel oil is thicker than regular oil. Mechanics say they see this all the time.

    Examples
    New Scam Can Cost you Thousands
    Always get a used car inspected by an independent mechanic
    Danger Level 5
  45. Misrepresenting Vehicle Condition
  46. Dealer knows the car has problems or has been wrecked. Sells the car "as is", misrepresenting the vehicle's condition. Some states have lax laws about this.
    When buying a used car from dealer, try to get a 30 day warranty. Always check Carfax and Autocheck, and make sure to get an independent mechanic to inspect the vehicle first

    Helpful Links:
    My Used Car is a Lemon, am I Stuck With it?
    Danger Level 4
  47. Selling Car With Open Recalls
  48. In most states, it is still legal for a used car dealer to sell a vehicle with an open recall unless the recall is for a serious safety issue. You need to check for yourself and make sure there are no open recalls on the vehicle. Don't rely on the dealer for your safety. It is estimated that 1 in 3 used vehicles has an open recall.

    Examples
    Investigation Finds Serious Flaws in Car Recall Process
    CarFax offers a free open recall search at http://recall.carfax.com
    Danger Level 3
  49. Lying About Warranty
  50. When buying a late model vehicle (especially from a private party), you'll find some advertised as having a “Factory Warranty” or the balance of a factory warranty remaining. But many situations can void a factory warranty. Accidents, Modifications, Abuse, and Commercial Usage are just some examples.
    Check to make sure there really is a factory warranty still remaining. Don’t just assume the seller is telling the truth. Get the vehicle's VIN (ID Number) and call your local dealer to inquire what warranty is remaining on that vehicle.
    Danger Level 3
  51. Stealing Your Deposit
  52. Seller posts a vehicle for well below market price, then convinces you to leave a deposit so they can take the car off the market. Once they have your deposit, you never hear back from them.

    Helpful Links:
    Video of this Scam
    Whenever you see a too-good-to-be-true price, that's always a huge red flag. Don't ever leave a deposit without seeing the title of the car, and verifying the owner's information.
    Danger Level 3
  53. VIN cloning/Stolen Car
  54. Any used car you buy from a private party or even an independent dealer could be stolen. Thieves steal a car, then take the VIN number from a similar car and attach it to the stolen vehicle. They basically create a fake VIN sticker.

    Examples
    Car Buyer Upset After Stop for Stolen Vehicle
    Check for matching title and registration information, be wary of sellers with no fixed address, and be suspicious of any deal that seems too good to be true.

    Car Leasing ScamsBack to Top

    Danger Level 9
  55. Changing Figures in the Lease Agreement
  56. Due to the confusing nature of leasing, many dealers will change the numbers around in the contract and literally steal money from you. Things such as raising the capitalized cost or increasing the money factor.
    You need to have a good understanding of how leasing works and the terminology used to prevent this scam.

    Helpful Links:
    Car Leasing Overview
    Danger Level 9
  57. Raising the Price on the Vehicle
  58. Many car shoppers don't realize you need to negotiate the purchase price of the car when leasing, so they leave it up to the dealer and end up paying full MSRP.
    When leasing, the purchase price of the car is called the capitalized cost. This should be negotiated just as aggressively as if you were buying the vehicle.

    Helpful Links:
    How to Negotiate Prices
    Danger Level 8
  59. Lying About Money Factor
  60. Money factor is another thing that seems to confuse leasing customers. Money factor is basically the interest rate shown as a fraction. To convert it into an interest rate you're familiar with, you just need to multiply by 2,400 - but a lot of people don't realize this so it's an easy way for dealers to take advantage of the situation. Let's assume the money factor is .0025 so that would mean the interest rate is 6% (.0025 x 2400). An unscrupulous dealer may tell you the interest rate is 2.5%, hoping you get confused between 2.5% and .0025. A true 2.5% interest rate would equal a money factor of .00104 - but in the agreement the dealer will put down .0025. If you bring it to their attention, they will claim they told you 2.5 for the money factor, not the interest rate. This is straight up fraud, but they always have an excuse.
    Multiply money factor by 2,400 to get the equivalent interest rate. Make sure the correct figure is written in the contract.
    Danger Level 8
  61. Hiding Add-ons in Lease Agreement
  62. Dealer hides useless add-ons such as pin striping or even extended warranties into the lease agreement. (Buying an extended warranty on a lease is ridiculous since the manufacturer warranty usually covers everything during the short duration of the lease). The additional fees are hidden in the capitalized cost portion of the lease. The uninformed consumer doesn't notice the increased monthly payments
    Be familiar with how leasing works and check the agreement carefully to make sure all the numbers check out.

    Helpful Links:
    Car Leasing Overview
    Danger Level 8
  63. Double First-payment Scam
  64. Leases usually require you to make the first monthly payment up front, but sometimes the down payment includes this, other times it doesn't. Some dealers will try to take advantage of this ambiguity and get a double first-payment out of you.
    Check the agreement carefully and make sure they are not double charging you for the first payment.
    Danger Level 5
  65. Stealing Your Trade-in or Down Payment
  66. As crazy as this sounds, dealers can literally steal your trade-in or down payment with a stroke of a pen. The dealer simply changes or removes the "capitalized cost reduction" portion in the contract. It's the confusing terms that seem to trick people.
    Get familiar with leasing terminology and check the agreement carefully to make sure there is no missing information or errors.

    Helpful Links:
    Lease Terms Explained
    Danger Level 5
  67. Increasing Length of Lease
  68. You may be negotiating for a 24 or 36 month lease, but if the monthly payment is too high, some dealers will lengthen the term of the lease to 39 months or longer to lower the payment. The problem is they won't tell you. Sure, it will be written into the contract, but it's easy to overlook if you're not paying attention.
    Check the agreement carefully and make sure all the figures are what you agreed to.
    Danger Level 5
  69. Lying About Early Termination Penalty Fees
  70. If you're concerned about early termination fees (which you should be), don't expect the dealer to tell you the whole truth. Terminating your lease early can result in thousands of dollars in early termination penalties. These are on top of an early termination fee - usually $200 to $400. But if you ask a dealer, they will only tell you about the early termination fee and not the penalties. It's a small difference in words, but a huge difference in cost
    Never rely on the dealer for important information. Do your own homework.
    Danger Level 5
  71. Excessive Wear and Tear Charges
  72. Most of the time, you shouldn't have any problems with this. However, there is no clear legal definition of what excessive wear and tear includes, and your lease agreement may not spell anything out in detail. And guess who decides what constitutes excessive wear and tear? Yep, the leasing company - the one that profits as a result of these charges
    If you're in a situation where you feel there are excessive wear and tear charges, you need to demand a detailed written estimate outlining the specific damages along with the cost to repair.Take the vehicle to a couple of independent body shops or another dealer and ask for a written estimate for the damages.If the independent shops come back with a lower repair cost than the leasing company, you should fight the excessive wear and tear charges.If the leasing company doesn't budge, you can contact your state's attorney general's office and consider hiring an attorney if the charges are extreme.
    Danger Level 3
  73. Promise to Pay Off Lease Early
  74. Dealer promises to pay off the remaining portion of your lease in order to get you to lease or buy another vehicle. There is no free lunch. They will either roll the balance over to your new lease, or they will fail to pay it off, leaving you responsible for late payments and penalties.
    Keep these transactions separate. Don't rely on the dealer to take care of your old lease payments. The only exception is if there is an incentive program provided directly by the manufacturer, not the dealer.
    Danger Level 3
  75. Lying About Lease vs Buy Comparison
  76. Don't ever trust a dealer to fairly compare a lease versus buy decision. It's easy to fool an uninformed consumer into thinking that a lease will always be better than a purchase. The lower monthly payments makes it easy to do this. Smart shoppers do their own comparisons and don't leave it up to the dealer. Leasing CAN be a better deal in some cases, but don't trust the dealer to show you.
    Never rely on the dealer for important information. Do your own homework.

    Helpful Links:
    How to Quickly Figure out if a Lease Deal is Good
    Danger Level 3
  77. Total of Monthly Payments Trick
  78. When we see the word "total", we assume that's the total amount, but not in leasing. If you add up all of your monthly lease payments, this will be the total of your monthly payments but this figure does not include any down payment, acquisition, and security deposit fees. Those additional payments could easily add $5,000 to your total lease cost, but you wouldn't realize it because the dealer is showing you only the total monthly payments figure.
    Be familiar with how leasing works and check the agreement carefully to make sure all the numbers check out.
    Danger Level 3
  79. Balloon Loan Disguised as Lease
  80. When leasing a car, some dealers will try to put you into a balloon loan which seems like a lease but it isn't. A balloon loan is basically a conventional auto loan with lower monthly payments and a large "balloon" payment at the very end.
    In almost all cases, it makes more sense to just lease a car rather than get a balloon loan. Some manufacturers have special names for balloon notes such as GM's Smart Buy, Ford's Red Carpet Option, and Chrysler's Gold Key Plus.

    Helpful Links:
    Why You Should Stay Away from Balloon "Leases"
    Danger Level 2
  81. Marking up the Acquisition Fee
  82. The acquisition fee is charged by the leasing company to cover their initial administrative costs. These fees usually range between $350 and $1,000. If a car dealer is setting up the lease for you, they may try to mark up the acquisition fee and pocket the difference.
    The way to combat this is to comparison shop your lease with several different car dealers. Keep a close eye on this fee and see if they all charge the same thing - if so, it's not likely to be marked up.

    Car Financing ScamsBack to Top

    Danger Level 10
  83. Spot Delivery Scam (Yo-Yo Financing)
  84. The Spot Delivery Scam, also known as Yo-Yo financing, is a common scam used mostly against car buyers with bad credit. It occurs when a dealer leads the car buyer into thinking their financing was approved. They let them take the car home, only to call them back a few days or even weeks later to inform them that the financing fell through, and that they need to finance through a different lender at a higher interest rate. The majority of victims end up financing at a rate that is 5% higher than what others with the same credit should pay. If the victim had a trade-in, the dealer usually sells it (or tells them they sold it), so they're pressured to keep the new car.
    Always have a car loan arranged before visiting the dealership so you know exactly what kind of rates you qualify for. Never take possession of a vehicle unless the car loan is finalized - make sure to see that the financing has been approved first-hand. If they ask you to sign a "borrowed car agreement", that's a sure sign the financing has not been approved yet.

    Video Overview:

    Helpful Links:
    ResponsibleLending.org
    What to Do if Your Financing Falls Through
    Danger Level 8
  85. Packed Payments
  86. This is when dealers hide add-ons into the monthly car payment. These add-ons are typically service contracts, extended warranties, gap insurance, paint and fabric protection.
    Never negotiate based on monthly payments. You need to know exactly how much you're paying for the car and any additional services or products you agree to. Carefully check the contract to make sure all the numbers are correct.

    Helpful Links:
    How Dealers Make Money on Car Loans
    Danger Level 8
  87. Claiming You Have a Bad Credit Score
  88. This is when a dealer claims your credit score is bad and you won't qualify for a low interest rate. The dealer is banking on the fact that many car shoppers don't check their credit scores before purchasing a car. The dealer is then able to arrange a loan for you with a higher interest rate and a bigger commission for themselves. If your credit score is above 700, you should be able to qualify for the best rates.
    Always check your credit score and credit report before applying for a loan. Not only will you be prepared for this scam, but you may find errors that you can easily fix and improve your score.
    Danger Level 8
  89. Arranging Bad Car Loans
  90. Car dealers are not legally obligated to offer you the lowest interest rate that you qualify for. Dealers make money on car loans by charging a finance markup. They will try to arrange loans based on how much profit potential there is for them, not which loan gives you the best deal.
    Always comparison shop your car loan using multiple sources including credit unions, banks, and independent lenders. A dealer should only be used as a final resort to try to beat your best financing offer.

    Helpful Links:
    Car Financing Guide
    Danger Level 7
  91. Purchase Add-Ons to "Qualify" for Loan
  92. This is when a dealer tries to force you to buy an add-on such as an extended warranty, saying it's "required" by the lender due to your credit. Rolling any additional product or service into your loan as a required item is a scam.
    Lenders do not require you to purchase add-ons to qualify for a loan. Always comparison shop your loan using multiple sources including credit unions, banks, and independent lenders. A dealer should only be used as a final resort to try to beat your best financing offer.

    Helpful Links:
    Car Financing Guide
    Danger Level 6
  93. Switching Lender in Paperwork
  94. This is when a dealer switches the financing source in the contract to one that charges a higher interest rate. They will tell you that you were not approved for the original source. This happens most often in cases where you ask them to arrange financing through a specific source, such as your own credit union.
    Check the loan agreement carefully and make sure all the information stated is what you agreed to. Also, arrange your own financing before going to the dealer in case there are any problems.
    Danger Level 5
  95. Ilegally Marking Up Interest Rate
  96. Most states have maximum interest rates that dealers are allowed to charge for a car loan, but just because your state has laws doesn't mean all dealers will follow them. This scam is especially prevalent when getting a loan on a used car.

    Examples
    Dealer Charged Too Much Interest
    Always comparison shop your car loan using multiple sources including credit unions, banks, and independent lenders. A dealer should only be used as a final resort to try to beat your best financing offer.

    Helpful Links:
    Car Financing Guide
    Danger Level 5
  97. Won't Accept Checks from Online Lenders
  98. Sometimes dealers will try to do anything to get you to finance through them so they can profit from arranging the loan. They'll go as far as telling you that your online lender bounces checks, so they can't accept them.
    Refuse to do business with any dealer that tries to pull this one on you.
    Danger Level 4
  99. Falsifying Credit Application
  100. This is when a dealer falsifies your credit application, increasing your earnings on paper to get you approved. This is likely to put you in hardship, plus it's a felony in most states.
    Never take out a car loan based on false information. Always comparison shop your car loan using multiple sources including credit unions, banks, and independent lenders.
    Danger Level 3
  101. Deals for "Well-Qualified" Buyers Only
  102. The most attractive car financing offers are usually reserved for "well qualified" buyers. That means you need to have excellent credit to qualify - usually a credit score of 700 or higher. Consumers with lower credit ratings will pay a higher interest rate. This is a very common practice and is not considered a scam, but rather a teaser advertisement. The average credit score in the U.S. is around 685.
    Always comparison shop your car loan using multiple sources including credit unions, banks, and independent lenders.
    Danger Level 3
  103. Straw Purchase
  104. Similar to the Loan Packaging scam, but this time, the dealer tells you to get a co-signer knowing that you still won't be approved. Instead, they just make the loan out to your co-signer. You will not be the legal owner of the vehicle, will not be building your credit, and the co-signer won't be aware of it either.
    Make sure the agreement clearly states that the loan is made out to you, and make sure both you and the co-signer sign the loan agreement.
    Danger Level 3
  105. Fake Car Loan Modification Companies
  106. Companies that charge bogus fees and promise to get the consumer's auto loans modified with reduced payments. They prey on consumers who are upside down on their auto loans or are having trouble making payments. Some have told consumers to stop making payments, which have resulted in repossessions.
    If you're seeking a loan modification, call your lender directly to work something out with them. If you insist on working with a debt consulting company, make sure to check their Better Business Bureau ratings first.
    Danger Level 3
  107. Excessive or Fake Acquisition Fee
  108. In order to reduce risk, some lenders charge an acquisition fee to those with bad credit. This can range from a few hundred dollars to over $1,000. If the loan is arranged through a dealer, they are supposed to disclose this fee. However, many dealers will try to hide the fee by increasing the price of the vehicle, or in some cases, will charge an excessive acquisition fee and pocket the difference.
    First, you should always try to arrange your own financing before going through a dealer. If the dealer tells you there's an acquisition fee, ask for the contact information for the lender and verify that the fee is accurate.
    Danger Level 2
  109. Breaking Compliance Rules
  110. There are several compliance regulations dealers must abide by when communicating with car buyers, especially when it comes to financing. For example, dealers cannot say "That's the best payment I can give you". They can't use the word "best". They have to say "Based on your qualifications and the lending companies that are available to me". Dealers can get in trouble for this, and a lot of them don't even know they're breaking the rules. Dealers are subject to paying heavy fines if caught breaking these rules.
    If you want to be extra careful, ask permission to record your conversation with the finance manager.
    Danger Level 2
  111. 0% Financing Scam
  112. Watch out for dealers offering 0% financing deals that are not originated through the manufacturer. The only legitimate source for 0% finanancing deals is through the manufacturer's captive finance division. If a dealer is offering 0% financing, they are simply raising the price of the car to offset the cost of "buying down" the interest rate. This scam works on cars that are heavily discounted in the first place.
    Keep the price negotiation separate from the car financing. Make sure to comparison shop rates from multiple sources.

    Helpful Links:
    0% Financing Scam in Detail
    Danger Level 2
  113. Dealer Takes Advantage of Prizes
  114. A dealer may set you up with a car loan from a lender that is offering them special prizes or gifts. They are not looking out for your best interest, but rather setting you up with a loan that provides them with the most perks.
    Always comparison shop your car loan using multiple sources including credit unions, banks, and independent lenders. A dealer should only be used as a final resort to try to beat your best financing offer.

    Helpful Links:
    Car Financing Guide
    Ways Dealers Make Money on Car Loans
    Danger Level 2
  115. Pre-computed Loans
  116. A pre-computed car loan has you paying the majority of the interest early on, so if you ever decide to pay off the loan early, you will still incur most of the interest charge. Luckily, most car loans these days are computed using a simple interest formula and some states even outlaw the pre-computed loan.
    Check the contract to see if it allows a refund or rebate of interest. If it does, you're signing a pre-computed loan. Also, see if the Rule of 78s formula is mentioned in the agreement. If so, it's a pre-computed loan.

    Helpful Links:
    Simple Interest vs Pre-computed Loans
    Danger Level 1
  117. Loan Packaging
  118. This is when a dealer packages two or more loans together in order to secure a loan for someone with bad credit. The person with bad credit would not ordinarily be able to get a loan on their own, but when their loan is packaged with people who have prime credit, the finance company approves them. If your loan is packaged with others who have bad credit, you will end up paying a higher interest rate.
    Always comparison shop your car loan using multiple sources including credit unions, banks, and independent lenders. A dealer should only be used as a final resort to try to beat your best financing offer.

    Helpful Links:
    Car Financing Guide
    Ways Dealers Make Money on Car Loans

    Trade-In ScamsBack to Top

    Danger Level 8
  119. Low-balling Trade-in
  120. Dealer will quote you a very low price on your trade-in. First, they want to see if you're a true sucker and willing to accept such a low offer. If not, they're hoping it will cause you to question the value of your vehicle. As they increase the offer, it seems like a victory to you, but since they started out so low, you still get ripped off.
    Shop your trade-in to multiple dealers.

    Helpful Links:
    How to Sell Your Trade-In
    Danger Level 7
  121. Highball Offer Over the Phone
  122. You call a dealer to see what they will offer for your trade-in. They give you an attractive offer and tell you to bring it in. When you bring it in, the dealer doesn't honor the offer after inspecting it in person. Their goal from the beginning was just to get you into the showroom where they can wear you down.
    Shop your trade-in to multiple dealers and have them inspect the car in person. Any offer you receive from a dealer sight unseen is no good.
    Danger Level 6
  123. Promise to Pay Off Loan on Trade-In
  124. Dealer promises to pay off any remaining loan on your trade-in. They add the extra amount onto your new car loan. A few weeks later, you realize the dealer never paid off the loan and now the bank is calling to collect from you. On top of that, your credit has been ruined.

    Examples
    Q&A Dealer Didn't Pay Off the Loan
    NEVER rely on a dealer to pay off your car loan. If you still owe money on a trade-in, sell it and pay off the loan with the proceeds. If you insist on letting the dealer pay off the loan, make sure to get it in writing that they will pay it off within 10 days, and then check to make sure they've done so.
    Danger Level 3
  125. "Forgetting" to Give the Title Back
  126. Dealer "forgets" to give the title of the used car back after a trade-in deal hasn't been reached. The owner can't complete a deal elsewhere without returning back to that dealership.
    Don't leave the dealership without getting your title back

    Sales Tactics & TricksBack to Top

    Danger Level 10
  127. Focusing on Monthly Payments
  128. "If I could get you in this car for $350 per month, would you take the car today?" This is a common sales tactic; getting you to focus only on the monthly payment. Dealers can hide all sorts of lucrative back end products into a monthly payment and you would never know. It's easy for a dealer to get you practically any monthly payment you want - all they have to do is extend the car loan or low-ball you on the trade-in, or any number of other tricks. This is one of the most common and profitable sales tactics.
    Always negotiate based on the actual price of the vehicle and always separate each part of the transaction into a seperate negotiation. This includes your trade-in, and any other products or services you purchase.

    Helpful Links:
    Why You Should Never Focus on the Monthly Payment
    Danger Level 10
  129. Lies, Lies, and More Lies
  130. The majority of car salesmen I interacted with have lied about small things: That color is not available; there's only 3 left state-wide; the price is good only for today; someone else is interested in the car, better decide quickly, etc.
    Take your time and be patient when shopping for a car. Don't rush into anything, especially based on what a salesman tells you. Just treat salesmen fairly and take everything they say with a grain of salt.
    Danger Level 10
  131. Shell Games
  132. Salesperson finds out what your hot buttons are and exploits them. If you have a trade-in, and they know you want a certain price for it, they will offer you what you want, but at the same time will raise the price of the new car. If they know you want a certain monthly payment, they'll make sure you get that, but they will extend the loan term so you end up paying more over the long-term. There are all kinds of shell games that happen at dealerships.
    Negotiate each portion of your car purchase separately. Shop your trade-in to multiple dealers, shop for an auto loan among multiple lenders, compare new car prices with multiple dealers. Don't let them bundle everything into one big deal.
    Danger Level 9
  133. 4 Square Method
  134. The "4 Square Method" is the most common sales tactic you will find in dealerships. It's a technique designed to confuse car buyers by mixing the price of the car, down payment, trade-in value, and monthly payment into a single transaction.
    This tactic only works on car shoppers who negotiate at a dealership. Simply use the phone/email negotiation method and negotiate each part of your transaction separately.

    Helpful Links:
    Price Negotiation Method Using Phone/Email
    4 Square Method in Detail
    Danger Level 8
  135. Preying on Service Members
  136. Many service members are young and inexperienced when it comes to money matters and don’t know how to recognize dishonest businesses. So pervasive are the ripoffs and so troubling is the debt incurred by military personnel that the U.S. Department of Defense officials labeled the situation a threat to national security.

    Examples
    Heroes Being Scammed at Home
    Shady Car Dealers Targeting Military Buyers
    Be wary of dealerships that are setup near military bases. Always negotiate with multiple dealers including ones that are far away from bases.
    Danger Level 8
  137. Wearing You Down
  138. Car salesmen know the longer you spend at the dealership, the more likely you are to accept an unfavorable offer. They will wear you down by delaying everything. When negotiating, the salesmen will visit the manager to review your offer, but won't be back for 15 or 20 minutes each time. All they are doing is goofiing off in the break room and wasting your time.
    This is simple, never negotiate price at a dealership. It's best to do it via phone or online.

    Helpful Links:
    Price Negotiation Method Using Phone/Email
    Danger Level 7
  139. Hidden Bias Towards Women and Minorities
  140. "Studies have shown that car salespeople have hidden biases towards women and minorities. All things being equal, dealers tend to quote higher prices to this group.

    Examples
    Research Paper: Gender and Race Discrimination in Retail Car Negotiations"
    You should negotiate with dealers using my phone/email method which will help reduce this bias.

    Helpful Links:
    Price Negotiation Method Using Phone/Email
    Danger Level 7
  141. Verbal Promises
  142. Salespeople will make all kinds of verbal promises they don't intend to keep.
    Make sure to get any verbal promises in writing and signed by a dealer employee
    Danger Level 7
  143. Special "Sales Events" and Discounts
  144. Special sales events, clearance sales, and discounts elicit a sense of urgency and many buyers fall for these fake sales events.
    Shop around and compare prices as you normally would. The only time there may be legitimate sales events is when the manufacturer, not the dealer, offers special incentives.

    Helpful Links:
    The Truth About Special Dealer Sales Events
    Danger Level 7
  145. Good Guy, Bad Guy
  146. Similar to the classic good cop/bad cop routine, one salesmen is "honest" and can be trusted, but his sales manager is hard to deal with. This strategy is meant to wear you down slowly, forcing you to agree to a bad deal.
    This is simple, never negotiate price at a dealership. It's best to do it via phone or online.

    Helpful Links:
    Price Negotiation Method Using Phone/Email
    Danger Level 7
  147. Limited Time Offers
  148. A common tactic to pressure you to buy today. If a dealer is willing to offer you a certain price today, you can pretty much bank on that deal being available tomorrow or even next week.
    Take your time and be patient when shopping for a car. Don't rush into anything, especially based on what a salesman tells you.
    Danger Level 7
  149. Pressure to Buy Right Now
  150. Salesman will try to build a sense of urgency. They will tell you the car is a hot seller and will be gone tomorrow, or that another customer is interested in it.
    Take your time and be patient when shopping for a car. Don't rush into anything, especially based on what a salesman tells you.
    Danger Level 6
  151. Lapdog Trick
  152. Instead of quoting you a price on a vehicle, the dealer tells you to come back and they'll beat your lowest price. The customer feels obligated to revisit the dealership in hopes of getting a better deal.
    Tell them in order to get your business, they will have to quote you a price first.
    Danger Level 6
  153. The guilt trip
  154. Salesmen will display photos of their family prominently on their desks and give you sob stories of how they're just making ends meat. They will try to make you feel guilty for wanting to negotiate the price down. Some salesmen have been known to put photos of children on their desk that aren't even theirs.
    Everyone has their own problems, don't fall for these guilt trips.
    Danger Level 6
  155. "Misplaced" Your Car Keys
  156. When you have a trade-in, some dealers will try to get your keys and vehicle documentation in their possession. If the negotiation doesn't go their way, they will claim to have "misplaced" your keys. They will keep you at the dealership and try to pressure you into a deal.
    Bring a spare key with you to the dealership. You can leave when you want and have them mail you the key when they "find" it.
    Danger Level 5
  157. Payment Bump
  158. Salesman asks a bunch of questions to see what kind of payment you're comfortable with. Whatever you tell them, they take that number, bump it up a bit and ask if you would be willing to spend that much if you found the car you really liked. Most people say yes, effectively bumping up the payment before negotiations even begin.
    Don't negotiate based off of monthly payments.
    Danger Level 5
  159. Preying on Elderly
  160. Some dealers prey on the elderly, especially ones on fixed incomes. These consumers tend to be trusting. If an aged friend or family member living on fixed income all of a sudden starts showing up to BBQs and driving around in a luxury automobile they shouldn't be able to afford, you may want to start asking some questions. A real example is that of an older couple that had $2,600 month fixed income who were talked into buying a Cadillac for $15,000 above MSRP and jacked interest rate. Monthly payment was $2,300.

    Examples
    How a Car Dealer Screwed an Old Couple on Social Security
    Get a friend to help you negotiate using the phone/email templates

    Helpful Links:
    Price Negotiation Method Using Phone/Email
    Danger Level 5
  161. "Lost Check" Scam
  162. Salesman asks you to write out a check when negotiating so they know you're serious, They say they'll take it to their manager. They then "misplace" the check. You feel pressured to concede to their terms since they have your money.
    You should never write a check unless you have a signed agreement in place.
    Danger Level 5
  163. Assumptive Close
  164. The "assumptive close" approach is where they add lucrative products or services into your agreement. If you object, they say "Oh, you don't want a warranty? Have you thought about what you would do if a breakdown occurs? Ah, I see. Well I will need to go and speak to XXX and see if they can take it off, we always sell warranties with our vehicles!" . This makes the customer second guess if they are making the right decision by not taking it. (everyone else is doing it, maybe I should too).
    Know what you want before going to a dealership and negotiate everything seperately. Don't be pressured or rushed into anything you don't want or need.
    Danger Level 5
  165. Overcoming "Enormous" Hurdles
  166. This is a closing technique that makes the customer think that they are getting a great deal because the salesman and dealer staff are "working" really, really hard to make sure that the deal happens and that they are overcoming enormous hurdles to accomplish what was set out during the negotiation process. In reality, it's all a sham.
    This is simple, never negotiate price at a dealership. It's best to do it via phone or online.

    Helpful Links:
    Price Negotiation Method Using Phone/Email
    Danger Level 4
  167. Fill out Credit Application Right Away
  168. At some dealerships, you may be asked to fill out a credit application right away. The results determine how they will treat you. The worse your credit score, the more forceful they will be in pressuring you into a car you may not want.
    First, know your own score and arrange your own financing before going to the dealer. If they ask for a credit application right away, just tell them you're already aware of your score and that it won't be a problem to get financing.

    Helpful Links:
    CreditKarma - Check your credit score for free
    Danger Level 4
  169. The "Honest" Salesman Routine
  170. Admittedly, there are actually honest car salesmen out there, but it's sometimes hard to tell which ones are really honest, and which ones are simply using it as a tactic. The shady ones immediately start out gaining your trust by doing something counter-intuitive. For example, you may be looking at a used car, and they'll come up to you and whisper that you shouldn't consider that car, it's got a possible transmission problem. They gain your trust in order to abuse it later.
    Just treat salesmen fairly and take everything they say with a grain of salt. Unfortunately, you can't tell if they're really being honest with you.
    Danger Level 4
  171. Slamming the Customer
  172. This is when the salesman knows the customer is not well-informed. They will rush you through the entire car buying process, quickly taking you through the test-drive, rushed negotiation, and paperwork. By the time you figure out you got ripped off, it's too late.
    Take your time and be patient when shopping for a car. Don't rush into anything, especially based on what a salesman tells you.
    Danger Level 2
  173. Preying on Mentally Ill
  174. Thankfully this is not a widespread issue, but some dealers will take advantage of anyone they can.

    Examples
    Car Dealer Accused of Bilking a Mentally Ill Man
    Contact the State Attorney General if you feel the dealer has preyed on a mentally ill person.
    Danger Level 2
  175. Hidden Microphones/Spy Cameras
  176. Hidden microphones and spy cameras are sometimes used in dealerships, especially in the Finance office. They leave you alone so you can discuss the deal with your partner or whoever else you brought to the dealership. It's a very sneaky tactic.
    This is simple, never negotiate price at a dealership. It's best to do it via phone or online.

    Helpful Links:
    Price Negotiation Method Using Phone/Email
    Danger Level 2
  177. Take the Puppy Home Tactic
  178. This is when a dealer allows the car shopper to take the car home for a night. You get to see the car in your driveway or garage, and build a strong emotional connection to it. It's like taking a puppy home, there's no way you're going to give it up after that. You'll also likely end up paying a lot more for it.
    Don't accept this offer, you will be at a huge negotiation disadvantage if you do.
    Danger Level 1
  179. "Free" Valet Parking
  180. Dealers will do anything to either keep you at the lot, or ensure that you have to come back to them. When valeting, they now have your key. They might say "my manager has your keys and he's out right now". Sometimes, they will hold you hostage at the dealership, some people have had to call the police.
    Insist on parking the car yourself and keep the keys, or always bring a spare key with you. If they keep it, tell them to mail it back to you when they "find" it.

    Advertising GimmicksBack to Top

    Danger Level 10
  181. Bait and Switch
  182. Dealer advertises a car with a great price, but when you show up at the dealership, they say it's already been sold. They then try to get you to buy a more expensive vehicle. The whole point of a bait-and-switch ad is to get you to the showroom.

    Examples
    Bait and Switch Example
    Call the dealership just prior to visiting to confirm they still have the vehicle in stock. If so, ask them to email or fax you a signed statement indicating that the vehicle is still in stock and available for sale. If they try to pull a bait and switch on you after that, you will have proof.
    Danger Level 8
  183. Pay Off Trade-In No Matter What You Owe
  184. Dealers that claim they will pay off your trade-in, no matter how much money you owe. Common types of ads you see are "Credit upside down? Need a new car?" or "I want your trade no matter how much you owe or what you're driving." The truth is, there is no free lunch. You will pay for it one way or another.

    Examples
    FTC Steps in to Curb Deceptive Trade-In Practice
    Shop your trade-in to multiple dealers and have them bid for the highest price. Or better yet, sell the vehicle to a private party to get the most money for it.

    Helpful Links:
    How to Sell or Trade-in Your Vehicle
    Danger Level 7
  185. Advertising Low Prices on Base Models
  186. When you see an ad for a new car with a low price, read the fine print and you'll see it's usually for a bare-bone model that hardly anybody wants. These are teaser prices designed to get you into the showroom.
    Read the fine print and research the model online.
    Danger Level 7
  187. Attractive Prices, Terrible Terms
  188. If an advertised deal seems too good to be true, it almost certainly is. Read the fine print to see the full details. A real example I've seen is $99/month zero money down for a brand new Kia Soul. Fine print says: $0 down, graduated payment plan: Months 1 - 3: $99. payments 4 thru 72: $617/month.
    Always read the fine print
    Danger Level 2
  189. Misleading Sales Price
  190. Not very common, but some dealers will mislead consumers by listing dealer cost or some other price on advertisements instead of the actual sales price.

    Examples
    Dealer Agrees to Stop Deceptive Ads
    Not much you can do other than refuse to do business with a dealer that tries to use this scam on you.

    Fees & PaperworkBack to Top

    Danger Level 9
  191. "Mistakes" in the Contract
  192. "Mistakes" in the paperwork are very common: funny how they are always to the dealer's advantage. Errors can be on the agreed purchase price, loan terms, down payment, or really anything.
    Make sure you review all the numbers and items in the paperwork to ensure they match up to the numbers you agreed to.

    Helpful Links:
    Switching Paperwork Scam
    Danger Level 7
  193. Fake Fees and Add-Ons
  194. Anything that is not listed on the official vehicle invoice is usually a dealer-added fee. Dealer Prep Fees, Additional Dealer Markup fees, or dealer add-ons such as pinstriping are all items that dealers sometimes add to the "invoice". These are pure profit for the dealer.
    Make sure you negotiate prices based off the official manufacturer's invoice. Any additional dealer fees should be removed or negotiated down.

    Helpful Links:
    Which Dealer Fees are Legitimate?
    Danger Level 5
  195. "Dispute Resolution" Agreement
  196. This ploy sounds reasonable at first, but be very cautious. After everything else has been agreed to, the sales person asks you to sign a "Dispute Resolution" or "Conflict Resolution" agreement. It often includes a clause that says you can't participate in any class-action lawsuits against the dealership -- no matter what they do! Sleazy dealerships use this because if they didn't, they'd get sued all the time.
    Make sure you read any arbitration agreements before you sign to make sure they are fair, and show them to your attorney. If they do require a dispute resolution agreement, check the fine print first, and if it has the provisions I've just described, shop elsewhere.

    Helpful Links:
    Scambusters.org - How to Avoid This Scam
    Danger Level 5
  197. Bogus Electronic Filing Fee
  198. Some dealers will try to charge an additional fee called Electronic Filing Fee on top of their documentation fee. They do not fully disclose the additional ‘electronic filing fee', hiding it in the ‘fees and taxes’ portion until the actual contract is filled out. This fee is described as “a fee charged because the dealership processes and electronically files the paperwork”. Electronically filing is actually easier for the dealer, yet they're trying to charge you for it.
    Dealers should charge a maximum of $29 for electronic filing, but you should ask the dealer to get rid of that fee or have the dealer submit the files manually instead.

    Helpful Links:
    Guidelines for Charging Electronic Filing Fee
    Which Additional Fees Should You Pay
    Danger Level 5
  199. Sign For a "Free" Item
  200. Any time a finance manager tells you they'll throw in something for free, but you need to sign for it, this is a huge RED ALERT. They are probably trying to sneak something into your contract that you did not want.
    Look over the contract carefully, do not sign any blanket waiver forms or anything that's free (unless it's a manufacturer promotion)
    Danger Level 3
  201. Leaving Dealership Without Paperwork
  202. Dealer comes up with an excuse as to why they can't complete your paperwork (usually it's something to do with computers crashing). They send you home with the vehicle, but no paperwork. They tell you to come back the next day. When you show up, you find that the figures in the paperwork have changed for the worse. They may have raised the price of the car, changed the terms of the loan, etc.
    Never leave a dealership without all the signed paperwork.

    Helpful Links:
    Never Leave Dealership Without Paperwork

    Manufacturer AdvertisingBack to Top

    Danger Level 7
  203. Advertising Unrealistic MPG Figures
  204. Manufacturers have been accused of advertising MPG figures that do not match real-world figures. Hyundai Elantra and Honda Civic owners in particular have been complaining about this. In addition, manufacturers also advertise the highest MPG highway figure in advertising, even if only a select few trims actually get that. Car makers use the mileage estimates generated by the EPA for advertising, but that can be misleading because it doesn't necessarily simulate real-world driving conditions.

    Examples
    Hyundai Lawsuit for Misleading MPG Claims
    Sites that keep track of real-world mileage are: Fuelly.com, TrueDelta.com, and CleanMPG.com.
    Danger Level 5
  205. Low Advertised Lease Payments
  206. Manufacturers will often advertise low monthly lease payments but require a large down payment. There is no law limiting the down payment amount, so they can get away with advertising extremely low monthly payments.
    Always read the fine print and learn how to compare lease deals the right way.

    Helpful Links:
    How to Quickly Figure out if a Lease Deal is Good
    Danger Level 5
  207. Teaser Prices
  208. Manufacturers will highlight the lowest-priced, bare-bone model in their advertisements. In many cases, they don't even produce these base models, or produce them in such low numbers, they're impossible to find.
    Browse actual new vehicle listings online to get an idea of what inventory is really available and the prices you're likely to pay.
    Danger Level 4
  209. Misleading Specifications
  210. You need to take manufacturer vehicle specifications with a grain of salt, especially when it comes to interior space.

    Examples
    For Using Misleading Interior Room Specs
    How is Rear Legroom Measured
    Always test drive several competing vehicles before buying one. Nothing beats first-hand inspection and experience. Don't rule out a vehicle based solely on written specs

    Miscellaneous ScamsBack to Top

    Danger Level 8
  211. Trusting a "Friend" at a Dealership
  212. Do you know someone that works at a dealership? If so, be careful if they promise to take care of you. I've never seen someone get a great deal because they "know" someone at the dealer. They have your trust, and tend to easily take advantage of that.
    Do your own homework. If you have a "friend" at a dealer, have them beat the best price you're able to negotiate with other dealers.
    Danger Level 7
  213. Fake Online Car Dealers
  214. Phony car dealers set up a web site that looks legitimate. They list vehicles at too-good-to-be-true prices, wait for consumers to contact them from out-of-state, and only take payment by wire transfer. Once you wire the money, you never hear back from them again.

    Examples
    BBB Warns of Phony Online Car Dealers
    If you're going to buy a car sight unseen, make sure you hire someone to see the actual vehicle and inspect it first.

    Selling Your CarBack to Top

    Danger Level 2
  215. Fake Money Orders
  216. Person buys the car from you using a fake money order or cashier's check, but makes the amount for more than your asking amount. They then catch their "error" and ask you to refund them the overage. Since the original money order was fake, anything you send them is now lost. You'll never hear back from them.

    Examples
    Craigslist Car Scams
    Wait until you actually cash the money order or cashier's check to correct any errors.

    Service & Repair ScamsBack to Top

    Danger Level 7
  217. Replacing Parts Too Early
  218. The service center makes lots of money on replacement/worn parts such as brake pads. Some will tell you that the brake pads need to be replaced when they don't have to be. They know most people accept the repairs or part replacements no-questions asked.
    Have the vehicle looked at by an independent mechanic.

    Extended Warranty ScamsBack to Top

    Danger Level 7
  219. Misleading Offers in the Mail
  220. You get an official-looking letter in the mail warning you that your car warranty is about to expire. The letter may look like it's coming from the manufacturer or dealer, when in fact it's just a high-pressure sales organization that's trying to sell you a bogus extended warranty.

    Examples
    Auto Warranty Scams
    If you want to buy an extended warranty, call multiple dealers to get price quotes.

    Helpful Links:
    How to Buy Extended Warranties
    Danger Level 7
  221. Bogus Auto Warranty Companies
  222. Extended warranty providers go out of business often, either due to poor management or shady business practices. When this happens, you lose all the protection you paid for.
    You should only buy extended warranties directly from the manufacturer or through reputable independent providers.

    Helpful Links:
    How to Buy Extended Warranties

    eBay Motors ScamsBack to Top

    Danger Level 3
  223. Don't Accept Payment from Paypal
  224. Don't accept payments from Paypal when selling a car through eBay Motors. PayPal does not cover eBay Motors Vehicle Purchases.

    Examples
    Situation Where Paypal Refund Could Screw You
    Use a trusted escrow service such as escrow.com or if you do accept Paypal payments, take the money out ASAP so they can't freeze the funds if buyer changes their mind.
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