Beware of Car Financing Fraud

Car ownership is a valuable asset. Your car can be worth a lot of money, and it can retain that value if proper efforts are put into maintenance and repairs along the way.

However, car buying can be a tricky maze to navigate. You need to know what to watch for and what to do before you set out to buy a new car. If you are prepared, you can avoid some of the financing schemes below.

You will be in a better position to negotiate your vehicle purchase, and you will be more likely to be happy driving out of the dealership on four new wheels.

Low offers for Trade-in

You drive into the lot with a vehicle you are sure is worth x amount. However, the dealer has his mechanic look it over and the trade-in offer is far lower than what you expected. Don’t take this as gospel. There are many dealers who low ball your trade in offer to get more money out of you.

They plan on selling your vehicle for a lot more than what they are offering you. If you are in a position to negotiate – do so. If you aren’t, be prepared to walk away if necessary.

Upfront fees

Any fee before an application is processed or before funds are distributed are upfront fees – and these are a dealbreaker. Do not let yourself be sucked in to a deal involving upfront fees. In some cases, the funds are not approved, but you are still out the money for these fees that were required “up front.”

It is a good idea to get pre-approved before you go to a dealership, so you know the amount you are approved for and the rate. This cuts down on a lot of the scams a salesman can pull while negotiating your financing or vehicle purchase.

Guaranteed approval

Dealers offer guaranteed approval as a way to get buyers in the door. Maybe you need a car and don’t care if the APR is high or the term length for the loan is crazy. Maybe you qualify for a more moderate loan offer, but you aren’t aware. These are situations you want to avoid.

These dealers are also probably something to avoid. They want the money and aren’t at all concerned about your ability to pay or the quality of the vehicle they are attempting to sell you.

Padded payments 

Never focuse on the payment when you purchase a vehicle. If you do so, the salesman tends to try to add unnecessary GAP coverage or other services to the total price. This can lead to a lot of unnecessary money out of your pocket.

Title Washing

Salvaged vehicles are typically sold as used and “as is.” These vehicles can be damaged in an accident, a natural disaster or stolen and damaged then repaired at a later time. In order to avoid purchasing a vehicle like this, be sure to get the Vehicle Identification Number (VIN) and do a check of the vehicle’s accident history.

Vehicles like these may be in great shape, but sadly, more likely they are one bad moment away from total breakdown. And you will be left holding the keys.

Curbstoning

Beware of cars on Craigslist or local Marketplaces where you will be viewing the car in a parking lot or other area not associated with a business but clearly not where a personally owned vehicle would be located.

Image Source : https://pxhere.com/en/photo/100789

In these cases, dealers are trying to sell vehicles that have hidden defects (i.e. a missing airbag, etc..) that wouldn’t be able to be sold through the dealership. Vehicles sold in this manner typically end up with the buyer missing important paperwork – like the title.

In order to avoid this one, look up the phone number associated with the sale. If there are multiple ads, you might be dealing with someone who is curbstoning. Walk away.

Online car buying scams

In today’s world, a number of transactions can be completed online. However, there are red flags when it comes to these potential transactions.

First, if they want the money to be held in an escrow account until the vehicle is delivered – do not agree. If you are selling your vehicle, the account will appear to have the funds, but once they have the car the money disappears and you are out a car and the supposed money.

Also, if they want you to buy gift cards and give them the codes as a form of payment – do not trust this situation. Typically, again you will be out the money and the vehicle.

Finally, if there is a suggest wire transfer to accomplish the trade of vehicle and money – avoid this situation as well. Scammers will request the money through wire transfer first – before they deliver the vehicle. This type of transfer is untraceable, and you guessed it, you will never see the vehicle.

It is also a good idea to harden your heart before you go to sell a vehicle. Everyone in today’s world is out to get a deal, but scammers will not hesitate to make up the most dramatic story that shows their need for the vehicle – at a far lower price than it was listed at. If you are going to benefit from the deal, don’t be sympathetic to any potential buyers.

As you can see – financing and online schemes are far from rare. It pays to be aware of these potential situations and protect yourself to avoid losing money, a vehicle, or both.

In the event you end up with a vehicle that doesn’t operate as it was advertised, you may be able to get restitution through the Texas lemon law. If your vehicle is still covered by an original warranty from the dealership/manufacturer, this is a good start. However, there are many more steps to the process to help you get relief from a defective vehicle.

If you have a vehicle that has had a significant decrease in value and puts your life at risk to drive it, consult a lemon law attorney. They can guide you in the various criteria that the Texas lemon law has in regard to cases. They can also help you with timelines and gathering documentation to sway the case in your favor.

Don’t hesitate to ask questions and reach out for that assistance. They have the staff, the experience, and the desire to help you win your case.

The Texas lemon law is overseen by the Texas DMV. Keep this in mind, as filing a complaint can be accomplished via their website – if you have the funds for the fee on hand.

The good news is that, if the case is found in your favor, the vehicle may be repaired or replaced at the expense of the manufacturer or dealer. Or, they may be forced to give you a vehicle of comparable value and take back the one that does not run.

This increases your chances of getting behind the wheel of something reliable and safe in a timely manner.

So, if your car, truck, SUV, motorcycle, RV, electric vehicle or towable recreational vehicle (TRV) are defective, now is the time to consult a lemon law attorney.