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Scams to Look For When Purchasing a New Car

May 1, 2008
Buying a new vehicle is already hard enough without a car salesman putting pressure on you while you are browsing. We all know that almost every car dealer can be negotiated down on the sale price of a car. The thing is that to watch out for the scams so that you can maximize your hard earned cash. In this article I am going to share a few sales tactics that you may want to be on the lookout for the next time you purchase a new car.

1. Some dealerships may try to scam you by charging you for having the VIN# etched on the windows, saying that it is a requirement by the loan compnay. It is not. Lenders will never ask you to add features you don't need. Their main concern is your ability to repay the loan.

2. Watch out for the phrase "subject to loan approval". All car loan proposals will have this phrase in it and there are a few unscrupulous dealerships out there that will try and con more money out of you by quoting this phrase as the reason why. If you have good credit this isn't something for you to worry about. This scam is usually pulled on consumers that may have bad credit, and can mean added finance fees of $1000 or more and an additional $50 a month added to your monthly payment. Getting your car loan from a bank or other financial institution can save you from being caught out.

3. The credit score scam is very common nowadays. This involves the car dealer telling you that your credit score is lower than it really is and attempting to charge a higher interest rate. When purchasing a new car it's a good idea to bring along your credit report to dispute any claims that they could make.

4. Next is the forced warranty scam where the auto dealership will insist that in order to qualify for the car loan you will need to purchase a $2000, 2 or 3 year warranty. This is total rubbish and the truth is you don't need the warranty.

5. Another good scam that you may have seen is the dealer prep scam. This is an extra $500 that seems to appear on your contract to compensate the dealer for that hasn't been done because the car arrives in the dealership ready to be driven off the car lot to a prospective buyer. Try and avoid paying this if you can otherwise find a dealer that will knock off this ridiculous charge.

6. Another fake fee is the 'dealer mark-up'. This has no purpose other than to increase profits. You can usually see this fee on an orange sticker attached to the manufacturer's suggested retail price.

These scams are common in the industry, but with that said, ther are many good dealerships out there that will sell you a car for a good price and make a fair profit for their work. You just have to search for them.
About the Author
Roberto Beiro has put together 100's other great car articles on his website. He is also the author of 100's interesting articles like tips on buying a used car .
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