Motor Vehicle Sales Fraud
 Dealers have many scams. They are easy to spot and easy to avoid if you know what to look for. If you call or send me an email, I will send you a short brochure with six easy steps to getting the best deal possible when purchasing a car. Look out for what I consider the Top Five Dealer Scams.
Top Five Dealer Scams:
- “Your Credit Fell Through” (Yo-Yo Sale or Spot Delivery)
This is probably the most common fraud. The Pennsylvania Attorney General says that when you sign the Retail Installment Sales Contract (RISC) in Pennsylvania -- the long, 8½ x 17 inch document – the deal is done!!! When the dealer calls and says that the financing fell through, call a lawyer. If they one used scam, there’s no telling what else may be going on.
- “We’ll Pay Off Your Trade”
Dealers often say that they are going to pay off the loan on your trade, and then they charge it back to you. If a dealer says it is going to pay off your trade, then it must do so at its expense. Read the RISC carefully. Ask questions. Make sure that the dealer is not passing the cost back onto you. Likewise, if a dealer advertises a guaranteed amount for your trade, then the dealer must give you that amount. The dealer cannot mark-up the cost of the car to pay for the trade. Any conditions or exceptions must be contained in the advertisement.
- Concealed Damage, Defects and Vehicle History
Many vehicles are sold without honest and accurate disclosures. The dealer must tell you if the car has frame damage. The dealer must tell you if the vehicle has been used in the past as a “demo,” taxi, police car or rental. The dealer must give you a short description of the vehicle’s former use. If you ask if the car has been in an accident, or about anything regarding its history, or if it has any problems, the dealer must answer honestly. Remember to ask to see the inspection and service records and to have the car inspected by an independent mechanic.
- Forcing, or Overcharging for, Service Contract (Extended Warranty)
The dealer is not permitted to force you to buy a service contract, sometimes called an extended warranty, as a condition for providing financing. The price of the service contract may not be marked up in excess of 100% of its actual cost to the dealer. Remember not to buy any extras from the dealer.
- Misrepresenting Credit Scores and Financing Terms
Dealers often misrepresent your credit score and creditworthiness. Dealers often misrepresent the rate for which you qualify. Dealers often tell you that they will get you the best credit terms available, and then add to their own profit by padding those terms. It’s almost always more cost-effective to get your own financing from your bank or credit union rather than going through the dealer. Dealers often mark-up the financing, without telling you, costing you much more.
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