Even before the economy became less conducive for buying cars, there were dealer scams, unsavory business practices, and outright fraud. I asked Jody Victor® to enlighten us on how to recognize the scams and how to handle them.
Jody Victor®: Whether because of outright fraud or unsavory business practices, car buying can be filled with pitfalls. Be an informed buyer - learn what the scams are and how to circumvent them.
Selling Cars Without Proper or Clear Titles - Title fraud is on the rise because of the current recession and is often the result of poor business management on the dealer's part. It mostly happens when struggling dealers without enough money to keep operations going can't pay off the liens on titles for the vehicles they've purchased and sold. The same applies to trade-ins. The dealer is supposed to pay off the lien on a trade-in, but either is unable to pay or pockets the money and shutters the business after pulling this stunt a number of times. The Warning Sign - they say they don't have the title but they can get it. How to Protect Yourself - You should always ask to see the title and examine it carefully. If the dealership owns the car or is on the up and up, it will have the title on hand or be willing to produce it. And never trade in a financed car with a balance left on the loan.
Selling Wrecked or Salvaged Vehicles - It's one of the oldest tricks in the book: Patch up a totaled vehicle, make it look pretty on the outside, and sell it "as is" for full price. When things start to go wrong or don't work at all, the dealer hides behind the "as is" clause in whatever you signed. Warning Signs - A car's title must designate whether the vehicle has been totaled or salvaged, so look at the document carefully. Be wary if the title looks as if it has been altered in some way. How to Protect Yourself - Multiple experts recommend taking used cars to a trustworthy mechanic for a thorough once-over before signing anything. A trained Mechanic will easily recognize shoddy repairs, parts that will soon fail and whether the vehicle has been in a wreck or flood. Also, when test -driving the vehicle, check to make sure that everything functions properly, including all electronic and power equipment. More on car scams next time.
Thanks, Jody! We'll be sure to use your tips.