Car Dealer Scams To Watch Out For

Edmunds.com, eBay Motors and other car-buying sites also warn consumers to be careful when they are buying a car over the phone or Internet. Some unscrupulous sellers will ask buyers to send a check to an escrow account while a long-distance sale is completed. It turns out there is no car, and now they've got the buyer's money. Any time an escrow account is used to facilitate a deal, the buyer should establish it, not the seller, says Philip Reed, senior consumer advice editor at Edmunds.com.The most important advice is to read all the documents before you sign anything. And whatever you do, don't drive away in your new car until you understand every detail of the purchase contract. Sometimes dealers will hand over the keys to the buyer and then call a few days later saying, "your credit application didn't go through." It's a ploy to force the buyer into a higher-priced loan that's more profitable for the dealer.

"You should always be prepared to walk," says Linkov. "Don't become emotionally invested in it. If you feel pressured, that's when you want to step away."

Car Dealer Scams To Watch Out For

The Upsell

Alarms, extra cleaning, "prepping," rust-proofing, fabric protection and paint sealant are all common add-ons that dealers sometimes sneak onto the invoice without the buyer's knowledge. Most of these things you don't need. Make sure you read all the documents before you sign.

The Unwanted Warranty

Nothing is free, not even those floor mats the dealer throws in to seal the deal. He might tell you the warranty is included, as if it were free. But the cost is rolled into your monthly payment. If you don't want the warranty, make him take it off the invoice. Of course, if you do want an extended warranty, this is an easy way to pay for it.

Bait And Switch

This one's as old as the hills. You see a great price advertised on TV, then show up at the dealership only to find out the advertised special isn't available. Don't be talked into paying more, or getting a car with lesser value. Walk away.

The Credit Con

Some dealers will imply that your credit rating is worse than it is to trick you into paying a higher interest rate. The solution is easy: Know your credit score before you enter the store.

Payment Preoccupation

Don't allow negotiations to focus on the size of your monthly payment, and don't tip your hand about what kind of payment you can afford. Instead, negotiate the price of the car before you talk about financing. Otherwise, you might find yourself in a long-term loan at an uncompetitive

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