How To Avoid Scams by Car Dealers & Salesmen, Part 1
How To Avoid Scams by Car Dealers & Salesmen, Part 1
Created On June 26, 2018
Ever wondered what you should do if you are scammed by a car dealership or a car salesman? What are the used car dealer tricks? How do you avoid a car dealer lying to you about financing?
In order to be a victim you need to learn how to beat the salesman or dealership.
Below are a series of articles or links to various resources. If you read them all you will see a pattern of lying, scheming and outright fraud. Know their games before you are caught in their web of deceit.
Now don’t get me wrong – I really believe there are honest car dealers, but they are so few that they are painted with the same brush as all the bad ones. Do your homework in order to avoid losing money, time and your senses.
Reprint from the Arizona Attorney General’s Office
Also included in these publications are a Resource Page and Important Information about Consumer Complaints
Buying a New or Used Car
Next to a home, an automobile is often the largest purchase consumers make. Consumers who are not aware of their rights often make bad deals. The Attorney General’s Office has a separate publication entitled Consumers’ Guide to Buying a Car: Steer Clear of Trouble! that is available on our Web site at www.azag.gov.
• A salesperson rushes you to sign paperwork without giving you a chance to review the contract terms.
• Advertised minimum trade-in amounts and free gifts. Dealers may raise the price of the car to offset a low value trade-in or the cost of the “gift.”
• A contract that has terms substantially different than what was advertised or what the salesperson promised.
• A salesperson suggests putting false information on your finance application, such as inflating your income. Providing false information to obtain financing is a crime and you could end up with a contract you cannot afford.
• A salesperson suggests you take the car home before financing is approved. This practice is designed to “lock you in” to a purchase. If you take a newly purchased car home and find out later you will have to pay more than expected for financing, you should be able to get your trade-in back and return the newly purchased car (A.R.S. § 44-1371). Auto Purchases and Repairs Protect Yourself
• Do your homework. Get information about car dealers from the Better Business Bureau (us.bbb.org). Research the car’s value before negotiating a price. Look up the value in the Kelley Blue Book (www.kbb.com) or at Edmunds.com (www.edmunds.com).
• Arrange financing with your bank or credit union before car shopping.
• Be skeptical of the claims made in car advertisements and read the fine print carefully. (Save copies!)
• Make sure all promises made by the salesperson or dealership are put in writing and that you get a copy.
• Request a free vehicle history report from the dealer before buying a used car.
• Read all documents and understand all terms before signing a purchase contract. Do not sign contracts with blank spaces.
• Make sure the financing is approved before turning in your trade-in vehicle or accepting the new car.
• If you are buying a used car, have a trusted mechanic inspect it before you buy.
• If you decide to finance through a dealer, negotiate the price first. Once the price is settled, then negotiate the monthly payment.
• With dealer financing, always ask the dealer if the interest rate being offered is their lowest rate, whether the rate includes any profit for the dealer, and if so, how much.
• REMEMBER: Arizona does not have a cooling-off period or three-day right to cancel a car sale.
Extended Warranties and Service Contracts
Extended warranties are often one of the most profitable aspects of car sales
At the time of purchase, dealers may offer an extended warranty or service contract for an additional cost, but it can be expensive. In fact, extended warranties are often one of the most profitable aspects of car sales. Think carefully before purchasing a service contract. If the car model you have purchased has a record of reliability or you expect to own your car for five years or less, it may not be worthwhile to purchase an extended warranty.
If you are interested in a service contract, remember that cost and coverage vary greatly and may be subject to negotiation. Make sure you receive a copy of the terms and conditions of the contract from the provider.
If you pass on an extended warranty at the time you purchase your car, you may receive notices in the mail years later informing you that your original warranty is about to expire or has expired.
These notices may not come from the dealership where you purchased your car, but instead may be sent by an independent service contract provider trying to sell you an extended warranty. Certain providers of service contracts or extended warranties must be registered with the Arizona Department of Insurance. Therefore, before responding to a solicitation, contact the Department of Insurance (www.id.state.az.us) to make sure the extended warranty provider is in compliance with state law.
Arizona’s Lemon Law New Car:
The Arizona Lemon Law (A.R.S. § 44-1261 et seq.) has some specific protections. Consumers should consult the law or an attorney if their new car does not operate in a reasonable manner.
Here are the basics:
The period covered by the Lemon Law is the same as the term of the manufacturer’s warranty or two years or 24,000 miles, whichever is earlier. The covered period begins on the date the consumer receives the vehicle.
During the covered period, if the manufacturer fails to repair the defect(s) after four attempts, or if the car is out of service by reason of repair for a cumulative total of 30 or more calendar days, the manufacturer must accept return of the car or replace it with a new car (contact your dealer).
Used Car: A used car is covered by the Arizona Used Car Lemon Law (A.R.S. § 44-1267) if a major component breaks within 15 days or 500 miles after the car was purchased, whichever comes first. You have to pay up to $25 for the first two repairs. The recovery for the consumer is limited to the purchase amount paid for the car.
At some point, your car will need repairs. Knowing how your car operates and familiarizing yourself with the owner’s manual for your car will help you spot problems. It is best to find a trusted mechanic and auto repair shop before your car needs repairs. This will help you avoid making a last-minute or unnecessarily expensive decision.
Aggressive scare tactics employed by repair shop personnel to pressure customers.
Refuse to give you a written estimate.
Failure to provide a warranty on parts and labor. Protect Yourself
Ask for car repair recommendations from people you trust. Check with the Better Business Bureau to see if there are any complaints against the repair shop.
If your car is under warranty, make sure that the repair shop is authorized to provide service for your car’s make and model. Work done by an unauthorized repair shop could void the warranty.
If possible, get several written quotes from different repair shops before a major repair is done.
Get a written estimate first. The estimate should identify the problem to be repaired, the parts needed and the anticipated labor charge. Make sure you get a signed copy of the estimate.
Pay your bill with a credit card, if you can, to give you maximum flexibility to dispute the charge if something goes wrong. • Prepare for repairs by learning about your vehicle and preventative maintenance, before you experience a problem.
Test drive your vehicle after having it repaired to make sure the car is fixed to your satisfaction.
There is no such thing as a “standard warranty” on repairs. Make sure you understand what is covered under your warranty and get it in writing.
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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