Car dealership scam artists are alive and well, and there’s a good chance that one is operating just down the street from where you live. It’s a sad fact about the car industry, and it means that consumers need to protect themselves more than ever before ever stepping foot on the sales lot of a car dealership.
To help defend yourself against the dubious practices and outright scams that car dealerships often use to sell more cars, we’re showcasing some of the more common car dealership scams to beware of.
Be on the lookout for these tricksters, and if you believe you might have been a victim of fraud at the hands of a car dealership, don’t hesitate to contact the legal team at Matthew R. Osborne, PC to schedule a free consultation.
Buy-Lease Switch Scams
Most consumers know the difference between leasing a vehicle and buying it. When you buy a car, you own it once all the payments have been made (until the payments are made, the bank financing the car technically owns the vehicle). Under the terms and conditions of a lease, however, there is no potential for ownership at the end of the lease term.
What many car dealerships will do as part of this scam is ‘sell’ a vehicle to someone, when the actual contract they sign ends up being a lease, instead. It’s common for the consumer to find themselves two or three months into their lease agreement before they realize that they’ve been duped. They thought they were buying a car that they would eventually own, but what their paperwork says is something totally different.
Car dealerships who run this scam hate it when consumers actually read what they’re signing. To ward yourself against this kind of scam, be sure to read every sentence contained in any document you sign. If you’re unsure about how to interpret what you’re reading, consider bringing in an outside, third-party resource to assist you (someone who doesn’t have a financial interest in the transaction).
Undervaluing a Trade-In Vehicle
This scam ranks pretty high as one of the most popular car dealership scams throughout the country. Car dealerships know exactly how much they’ll be able to get for the vehicle you trade in, because they have a thorough understanding of the local car market. They also have access to valuation tools that show them current resale values for all kinds of vehicles—cars, trucks, vans, SUVs, all of them. If it has a VIN number, a mileage, and a condition, it has a fair market value.
When a car dealership intentionally undervalues the worth of a trade-in, the consumer ends up getting a raw deal. What the dealership will often say will include things like:
“Well, we have to recondition your trade, paint it, fix some of the dents and cosmetic issues, and then we have to incur the expense of paying our team to list and sell it. All of that will cost money. So, we can’t give you fair market value.”
“Your trade isn’t really worth as much as Kelly Blue Book says it is because of where we are in this part of the country. You see, selling cars in this market is much different from other markets. So, we can’t give you full value for your trade.”
“Even though your car’s fair market value is $10,000, it has over 100,000 miles on it, which is something buyers really don’t like to see. So, we can only give you $5,000 for your trade.”
While undervaluing a trade isn’t technically illegal, it’s something that should be called out when it happens. Before going to any car dealership to trade your car in for a new or used one, do your research beforehand. Learn what the fair market value is for your car, and don’t settle for any deal that doesn’t give you the credit you’re due for the car you trade in.
Need Legal Help Regarding a Vehicle Purchase? Contact Us
At Matthew R. Osborne, PC, we’ve seen the worst that car dealerships are capable of. The kinds of scams and underhanded tricks they use to swindle customers is truly sad to behold.
However, consumers do have a way to fight back.
To combat car dealership scams and fraud, we give our clients the legal guidance and counsel they need to right the wrongs done by car dealerships. If you believe that you are a victim of such consumer rights violations, don’t hesitate to contact our office immediately.