How to Avoid Car Trade-In Scams

Unfortunately, many car dealers still use trade-in scams to maximize their profits on each deal. By being aware of the more common of these scams, you can save yourself thousands of dollars, or help yourself simply avoid unscrupulous car dealers altogether.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Independent mechanical inspection
• Credit report

1. Avoid car trade-in scams where the dealer says he will pay off your current lease or loan, no matter how much you owe. Remember that a lease or a loan is a financial contract, and there is no trick to eliminating one when buying a new car. Since this supposed "deal" will only end with you making even higher monthly payments on your new car, it's best to simply wait until your car is paid for, or your lease has expired.
2. Watch out for car dealers who conveniently forget to pay off your trade-in after the deal is complete. Many new car buyers are shocked when they receive notices for a collection agency a few months down the road because the dealer never handled the transaction as promised. Again, you can avoid this trade-in scam by ensuring that you get all pay-off documentation in writing, or simply wait until you vehicle is paid off before you trade it in for a new car.
3. Have your trade-in inspected by an independent mechanic in order to avoid car dealers who report "all sorts of problems" with the vehicle. By providing independent and recent documentation, you can effectively refute a dealership mechanic who claims your brake pads are almost gone, or that your engine may need a complete overhaul before it can be resold.
4. Obtain a copy your current credit report to avoid trade-in scams where the dealer tells you that you are ineligible for lower interest rates due to questionable credit scores. This scam is actually quite common, but it is easily discouraged once you produce a real credit report. Remember, no car salesman should ever know more about your credit score and financial history than you do.
5. Leave the dealership whenever you feel that you might be the victim of a scam. Don't try to beat the dealership at the game, since the salespeople have more experience at this than you. Simply walk away, and find a reputable dealer who will appreciate your business.

Tips & Warnings

• If you suspect a dealer is participating in trade-in scams, report the situation to your local Chamber of Commerce or the Better Business Bureau.