The ads offering great deals on used cars as trade-ins and fantastic financing offers – regardless of your credit – are everywhere. You may have even gotten a few flyers mailed directly to your door.
Just be cautious about believing whatever you read. Some dealers are experts at “bait-and-switch” financing scams.
2 ways dealers trick you into paying more
The best thing you can do before you go into a dealership to look for a car is to get your own credit score and get your own financing at your bank or credit union. Then, you don’t have to worry about dealers who will pull shady financing tricks.
Two of the favorites seem to be:
- Financing that mysteriously vanishes after you accept the car: The dealer is running a hot offer on new cars, and the paperwork is all backed up. However, that’s no problem – you’re pre-approved, and you can take the car home today. Two weeks later, you get a call saying that there was something wrong with your credit, after all. The financing fell through, but the dealership was miraculously able to save the day and got financing for you (at a much higher interest rate) with another of their partners.
- Credit that takes a nosedive the moment you walk through the door: You thought your credit was pretty good. You’ve not missed any payments, you’re conservative with your credit usage, and you don’t have anything in collections – but the dealership says that your credit is “damaged.” They can, of course, still get you financed – but only through one of their partner lenders at a higher rate.
You may love that new car smell, but if something about the financing you’re being offered stinks, then it’s time to walk away. If you believe that you were scammed by your car dealership, there is legal help available.