Car scams are more common than many people think and it is quite easy to fall victim to a car scam if you don’t know how to recognize it. Scams can occur on both sides of a car purchase – from the seller’s side or from the buyer’s side. Here are 5 common car scams which you should look out for when buying or selling a vehicle:
1. Sleazy Salesmen – Not all car salespeople resemble the stereotypical picture above, but you should know what to look out for. Some unscrupulous car salesmen will say anything to make a sale, even if what they are saying is untrue. Be aware of car salesmen that to rush you into making a speedy purchase.
Avoid falling for lines such as “someone else is interested in this vehicle”. Don’t be pressured into a purchase.
2. So Called Deal Bundles – Deal bundles, where the seller consolidates the vehicle sale with auto insurance and auto loans, may seem attractive at first, but often costs the buyer more in the long run. Use different organizations for different aspects of your car sales, eg. search for separate loan acquisition from car sales dealership, or from top providers online.
3. Quoting a Higher Price Based on Gender or Ethnicity – Unfortunately, even in this day and age, some dealers may quote women or minorities at higher prices simply due to bias.
4. Yoyo Financing – This is what happens when car buyers with bad credit are tricked into paying up to 5% more than they should. Buyers are normally informed that their financing has fallen through a few days after they have taken the vehicle. As a result, they finance at a higher rate. Nicknamed “yoyo financing” is the sudden change in pricing. Avoid it if you can’t make a car payment.
5. Overseas Car Buyers Sending Payment Via Paypal – Lastly, this scam is one to watch for if you’re buying from a long distance buyer. Here’s how the situation goes: 1) Buyer claims issues with freight company. 2) Buyer offers a higher price if the seller pays the freight cost. 3) Selling over Paypal allows them to pocket the money. Avoid paying through Paypal if you can help it and meet buyers face to face whenever possible.