Most Outrageous Dealer Scam: Switching Paperwork
Usually, these errors will favor the dealer by a few hundred dollars (big surprise!). It could be the price of the vehicle is wrong, or the trade-in allowance is understated, or perhaps the interest rate on the loan is slightly higher.
A scumbag dealer making a profit of $200 on each "mistake" can easily add $20,000 to his bottom line each month. Now you see why these "mistakes" happen so often.
Make sure ALL the information in your Purchase Order matches the prices and terms you agreed to before signing.
If you catch a mistake, the dealer will just say "Oh, we're so sorry, our mistake!". It's a frustrating situation because you can't really prove whether it was a true mistake or just an attempt at stealing your money.
Some dealers actually go way beyond this if they feel they can get away with it. They usually target car shoppers that are more susceptible to being ripped off, such as the elderly, minorities, and people with bad credit.
We've heard of cases where dealers scam people out of thousands of dollars after switching the paperwork. The most outrageous ones will even switch a car purchase into a lease without the customer realizing it.
The monthly payments may look the same, but the customer is in store for a huge headache down the line.
Dealers get away with it because many consumers are careless when signing the paperwork. They're presented with a bunch of papers to sign, and by the time the Purchase Order comes around, they're impatient to get the deal over with so they sign without realizing the switch.
If you complain afterwards, the dealer can show you paperwork stating you've read all the terms and agree to everything with your signature.
It's easy to prevent this scam as long as you are careful looking over all the documents you sign.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid