What is dealer fraud?
on February 13, 2018

A Guide To The Different Types Of Auto Dealer Fraud

When buying or leasing a new automobile from a car dealership, you hope that you are not being cheated. Unfortunately, cases of auto dealer fraud are too common in today’s society so there is always the chance of falling victim to this crime. While there is room for people to negotiate, dealers should always be honest and upfront regarding the sale; but when do you know they are being fraudulent? This article will provide information on the most common types of auto dealer fraud people experience.

1. Hidden Fees Dealer Fraud

The first common auto dealer fraud practice is when false statements are made regarding the price of the car. After reviewing vehicle models and negotiating a price, you may find that the cash price on the contract is higher than what was agreed or advertised. This higher price is often due to the salesperson adding “hidden fees” without informing you of the additional cost. If you find yourself in this position, it is recommended that you do not continue the transaction and report the dealership to the Federal Trade Commission.

2. Adding Accessories Dealer Fraud

Most people have found themselves being confronted with an option of additional accessories or discounts when purchasing items, but many choose to avoid these unwanted extras. Unfortunately, this is another case of dealer fraud when the salesperson “packs the package” with unwanted features and services. For example, the final contract may include items such as extended warranties or protection packages – all items with high rates. If the salesperson places these items in the contract, it is advised that you draw a line through them and request a reduction on the purchase price.

3. Bait And Switch Dealer Fraud

When a car dealer claims that the vehicle is no longer available at the advertised price, it is possible that he may be practicing a procedure called “bait and switch”. To avoid this particular type of dealer fraud, it is advised that you read the fine print in advertisements, contact the dealer to confirm the price, and bring the advertisement with you to the dealership. If he will not honor the advertisement, you may have a case of fraud.

4. Finance Dealer Fraud

When processing a loan application, a dishonest dealer will claim that the credit score is too low to qualify for low-interest financing. If this is the case, he or she may try to get you to agree to unfavorable terms. To avoid this type of fraud, it is recommended that you know your credit score before making a loan application.

5. “Hiding A Lemon” Dealer Fraud

When purchasing a second-hand car, it is always recommended that you run a vehicle history report and have a mechanic inspect the automobile. If the dealer misrepresents the car’s condition to conceal any faults or “hiding a lemon”, he or she will be engaging in a type of auto dealer fraud.

Contact a Dealer Fraud Attorney

As can be seen, there are many different types of auto dealer fraud. Using the information above you can determine if you have been a victim of fraudulent behavior. If you have been experiencing problems with your vehicle and have reason to believe you may be a victim of dealer fraud, contact the Lemon Law Lawyers today.




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