Car dealer fraud is an unlawful practice that some car dealers use during advertising, price negotiation, sales and the financing of vehicles. Because this is such a common thing, it is important for consumers to become more knowledgeable and aware of these fraudulent tactics.
Car Dealer Fraud Tactics
Some of the most common car dealer fraud tactics used include:
Hidden fees and other price escalations
One of the most common schemes dealers of new and used cars use is to inflate the price they paid for a vehicle in order to justify charging customers a high price. Some auto dealers will boost the price of a vehicle by adding fees to the sticker price which are associated with extended warranties, vehicle maintenance programs, etc but won’t tell a customer about these fees until it’s time to sit down and finalise the transaction.
Advertising a used car as one that’s new
Some less-than-honest car dealers will attempt to disguise a recently returned vehicle as one that’s brand new even though the car has been recently owned.
Turning back the odometer
This is a car dealer trick that’s as old as cars themselves. A dishonest dealer will roll back the odometer numbers in order to make a car seem as though it has very little wear and tear on it due to the low mileage being displayed on the odometer.
Valuing a trade-in too low
It’s common for fraudulent car dealers to undervalue trade-in vehicles so they can turn a nice profit. Some dealers will tack hidden fees and other costs onto the final selling price in order to inflate the value of the car being purchased, knowing that the trade-in value will hide these underhanded price inflations.