Whether you need a new or used car, most car-buying issues apply to both situations. Once again, I have asked Jody Victor® to let us in on scams and other pitfalls for the car-buyer.
Jody Victor®: In the present economic climate, there may be more incidences of scams and unfair practices. But as consumers, we still need to purchase vehicles at some point. Here are some more pitfalls to be aware of, so you don't become a statistic.
Bogus Warranties : Be leery of warranty coverage that is "required" for one reason or another. Extended or added warranties are usually optional. How to protect yourself - If a salesperson says the bank financing your vehicle requires you to purchase an extended warranty, ask them to put it in writing. If the dealer is misleading you, they'll usually back off at this point. As far as avoiding fake warranties, verify that the company actually exists before paying for the coverage.
Acquisition Fees and Other Mysterious Charges : If the price of a car suddenly goes up by thousands of dollars while you're sitting in the finance office and the salesperson says it's because you have bad credit, something is up. High interest rates are the norm for bad credit, not thousands in upfront fees. How to protect yourself - Know your credit score and secure financing before you start shopping. And, once you're in the back office, don't sign anything before carefully reading every line item and the fine print.
Financing Falls Through : Dealers who offer to let you take a car home but don't finalize the loan terms might not have your best interests at heart, especially if you've already agreed to leave your trade-in with them. If you get a call about a problem with a loan several days after signing an agreement, be suspicious. Also, a dealer shouldn't increase or lower the loan interest rate based on whether you'll buy extra warranties or dealer services. How to protect yourself - Line up your own financing before going to a dealership. Compare the interest rate of the loan you already have with what the dealer offers and go with whichever one is better. When negotiating with dealers, experts recommend focusing on the total cost of the car, not the monthly payment. Dealers can sometimes monkey around with the total amount being financed if you're too focused on the monthly payment.
Misleading Advertising : Be very cautious of any ad where there is only one vehicle listed at a given price - you may go in and find a similar vehicle in a different color that is not available at that price. How to protect yourself - Read the fine print, and call the dealer ahead of time. If you are going to respond to a 'too good to be true' ad, call to verify the availability and the price of the vehicle you want to look at. Do it immediately before you go into the dealership to minimize the chance that it's sold when you get there.
Thanks, Jody! We'll be sure to watch for these!