SolveYourProblem eLearning Series:
How Do I Buy a Car
Without Getting Ripped Off?
( 17 pages )

Top 10 Car Dealership Scams

5. The Dealer Prep Scam

Let me first let you know that cost is not only legal but very much common practice. I still refer to it as a scam because it is just another way for you to end up paying more money for the car.

Basically the dealer will tell you have to an extra $500 to cover the labor costs of the dealership’s 5-point inspection.

You are paying for the time it took for the dealership to make sure that the car wouldn’t explode on you in the first week of owning it.

This check up that you are paying so much money for is for the dealership to remove plastic from the seats etc, vacuum the car out, and making sure that all of the fuses and fluids are ready to go.

When factories deliver the new cars to the dealerships the cost of delivery and prep is already covered, so basically you are paying the dealership for work that they haven’t really done.

I swear they could get the car in perfectly ready to drive condition and put everything right back in it just so that they can make you pay the fee again.

You can avoid this scam by simply asking the dealership to add an extra $500 credit to the deal to make sure you do not have to pay the money.

If they refuse, you can then decide if the car is worth the money. If it is fine; buy the car, if not; go to another dealer that will remove the dealer prep costs.

6. The Dealer Mark up Scam

This is an unnecessary fee that the dealer charges for no reason other than greed. This fee can be seen on the orange sticker marked on the manufacturer’s suggested retail price (MSRP).

The additional dealer markup is nothing more than requiring more money for no real reason. They can include all kinds of extra fees in the additional dealer markup.

When you see an extra dealer mark up fee, ask the dealer to get rid of it. If they refuse, it is pretty much up to you, but remember that if you do pay the extra dealer markup, you are overpaying for no real reason.

7. The Payoff Your Loan Scam

This is when the dealer offers to pay off the balance of your current car loan no matter how much money you still owe. It is a common sales strategy.

When the average buyer hears it, they think that by purchasing a new car with a new dealership, they will automatically owe no more money on their current car.

That couldn’t be further from the truth.

What really happens is that the dealership does help you get out of your current contract; however, they normally are forgetting to tell you how high your fees are going to be for breaking the lease agreement with your old dealership.

You will now be responsible to pay fees that are in the thousands to make up for it.

You also will not be able to refinance for a new car until those fees are paid. Of course the dealership can add the cost on to your contract with them at a substantially higher rate.

The dealership only agrees to this deal because they want to get more money off of your current car. They aren’t really doing anything for you at all.

The dealership will also give you far less then the car is worth on the trade off. Basically this scam works because they will up your monthly fees, and then sell your trade in for a more money than its worth.

The dealership then extends your monthly payments so that they can make it appear that you are paying a small amount monthly when you don’t even realize that you have committed to an extra year of payments.

To avoid this scam, you have to bite the bullet and ride out your current lease till the end. If you are really determined to get a new car, then you should try selling your current car on your own.

Just sell it so that the buyer just takes over the lease payments.

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