When you are purchasing or leasing a new car from a dealership, you certainly hope that you are not being cheated. While there A Car Dealer Showing a Car to Potential Buyersmay some room for negotiating the price and options you ultimately get, dealers must be honest and up front about what you are getting. So how do you know when the dealer is involved in deceptive practices? Read about five common types of dealer fraud here.

Be Aware of These Deceptive Practices

Much of dealer fraud involves what a dealer advertises versus what you get when you go into the showroom. The fine print in the purchase or lease contract can also constitute fraud. Some common examples include:

  1. False statements about the price. After looking at models and negotiating a bottom-line price, you might find that the total cash price on the contract is higher than what you agreed to or that was advertised for that vehicle or product.  The salesperson may have added fees without telling you hoping you will accept them without question. If the salesperson and/or the manager will not honor the original agreed-upon price, or advertised price, walk away from the dealership and report them to the Federal Trade Commission and keep a record of the advertisement and inflated price offered.

  2. Adding unwanted options and accessories. Some dealers will “pack the contract” with services and features you didn’t ask for. Things like protection packages, extended warranties, rustproofing, and other accessories may be added to the contract, along with charges for them. Read the contract carefully to identify these items. If the salesperson offered you options for free, make sure there is no charge for them in the contract. If you find unwanted items in the contract, draw a line through them and reduce the total purchase price by that amount.

  3. Bait and switch advertising. When a dealer claims that an advertised price is no longer available, he may be practicing bait and switch. If, in fact, cars were never actually available at the advertised price, the dealer may be guilty of fraud. Always read the fine print in advertisements, call to confirm the offer, and bring the ad with you to the dealership. If he will not honor the ad, you may have a case for fraud.

  4. Hiding a lemon. When buying a used car, always run a vehicle history report and have an independent mechanic inspect the car. If a dealer misrepresents a car’s condition to conceal that the car is a lemon or was involved in a crash, he is practicing fraud.

  5. Financing fraud. When processing your loan application, a dishonest dealer may claim that your credit score is too low to qualify for low-interest financing and convince you to agree to unfavorable terms. Always know your own credit score before applying for a loan so you know where you stand. You can also secure a loan from a credit union or bank instead of the dealership.

For more examples of dealer fraud, see our companion piece here

When to Call the Consumer Law Group

If you have proof that a dealer acted fraudulently in your new or used car purchase or lease, contact us for a free review of your case. Unlike the dealer, we will be honest about what, if anything, we can do for you.


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