Car buying should be an exciting experience, but unfortunately, not all car dealerships operate with integrity. Dealer fraud is a serious problem that can leave consumers in significant financial debt and damage their credit rating.
In fact, “it’s not uncommon for car dealership deceptive practices to cost California consumers millions of dollars every year” (source: https://luisaguirrelaw.com/car-dealership-fraud/).
We’ll look at how dealership fraud works and how it can have dire consequences for your finances and credit score. We’ll also discuss how to protect yourself from becoming a victim of dealer fraud and what legal options you may have if you suspect you’ve been taken advantage of by a dishonest car dealership.
Types of Fraud: Unveiling Deceitful Tactics Used by Dishonest Car Dealerships
No one wants to worry about being taken advantage of when shopping for a vehicle, and unfortunately, there are dishonest dealerships out there wanting to take advantage of unsuspecting customers. Some most common forms of dealership fraud include false advertising, hidden fees, and odometer rollback.
False advertising may involve exaggerating the condition or features of a vehicle to mislead customers. As an additional trap, hidden costs can be charged for unsuspecting services or repairs that were not mentioned upfront. One of the most extreme forms of fraud is odometer rollback when the dealer manipulates the actual mileage on the vehicle to increase its apparent value. Unfortunately, you may only know if you are being tricked once it is too late, so research before deciding on any major purchase.
The Hidden Costs of Dealership Fraud: How it Could Set You Back More Than Just Your Initial Investment
Dealership fraud can cause serious financial damage, some of which may not be immediately obvious. From paying more than the car is worth to being liable for a loan with an exorbitant interest rate, fraudulent dealerships almost always leave investors worse off. The cost of ownership could even extend to repair work that you didn’t anticipate or want, especially if the vehicle turns out to be in worse condition than advertised. At its worst, dealership fraud could also result in vehicle repossession by lenders, leaving you with a serious credit blemish that will take time and effort to overcome.
The Effect on Your Credit: How it Can Disrupt Your Ability to Access Financing
Vehicle dealerships have the power to obtain financing on your behalf, but they must do it with honesty and accuracy. Unfortunately, there are dealership fraud cases in which the information reported to lenders is falsified or misrepresented. When this happens, you can face serious economic and credit consequences.
In addition to the financial impact, a false representation from a dealership can also cause your credit score to suffer. A barred loan will stay on your credit for seven years, and you could find
yourself needing help with obtaining financing in the future due to negative marks on your credit report. When dealing with any dealership, it is vital to be aware of this potential risk. Read all contracts thoroughly before signing to protect yourself against fraudulent behavior.
Learn how to Spot Dealership Fraud and Avoid It
Staying informed and taking the necessary precautions can mean the difference between an honest transaction and be taken advantage of. Before committing to a dealership, be sure to research both the company and the car in question.
Having an independent mechanic inspect your potential purchase before signing any paperwork is vital. Read through all contracts and agreements before signing them, including those related to financing. When making a car purchase, it is best to avoid getting pressured into making an immediate decision and only agree to a deal after seeing the vehicle history report first. Simple steps can help safeguard you against scams and other unethical practices.
Get Legal Assitance if Necessary
When you buy a car from a dealer, you trust their business integrity. Unfortunately, many victims fall prey to a dealer’s deceit and become victims of fraud. You may need legal help to deal with an uncooperative dealership in certain situations. State laws may vary. However, there are usually consumer protections that apply to the purchase of a car.
What can you do if you Suspect you’re a Victim of Fraud?
Once you have collected evidence of the fraud, you should contact your local consumer protection agency. Many state governments have services specifically designed to investigate claims of dealership fraud, and reporting it to the appropriate agency can accelerate any legal action you wish to take (Visit https://www.usa.gov/ to locate your state agency). Additionally, a licensed attorney can advise if the dealership’s activities are illegal and what further steps you can take.
Deceptive practices by car dealerships can have serious financial and credit consequences for consumers. Protect yourself, stay vigilant, and take your time when making a big purchase like a car. Don’t get pressured into an immediate decision. Be on the lookout for anything that doesn’t feel right, and always trust your instinct. If something is too good to be true, it usually is.
