How to Spot an Auto Sales Fraud

The best way to prevent fraud is awareness and using your best judgement when making any transactions. Consumers get bilked out of hundreds or sometimes thousands apiece by sales representatives using fraudulent practices in selling an automobile. They will inflate the cost of warranties, report a set of numbers to the bank which is different than the one given to the customer, and stuff the contract with extra costs that were not agreed upon by the consumer. Customers are vulnerable to the developed schemes by dealerships that squeeze the highest profit out of each sale.

Difficulty: Moderately Challenging

Instructions

1. Obtain independent financing. If none is available and only from a dealership, make sure transactions have been agreed upon before ever driving the car off the lot. Some sales managers may use your driver’s license you gave to check on your credit without your permission. Banks sometime will give a kickback to the dealer by insisting on a high rate of interest, without a customer’s knowledge.

2. Refuse to sign blank forms. Sometimes a dealer wants you to sign a blank form for the bank if it is after business hours. He will often report numbers different than the customer has agreed upon. The dealer might add products to the contract after you leave and not knowing you have a service or warranty you naturally would never make a claim on it.

3. Avoid buying flood-damaged vehicles. Be aware that cars damaged by floods might have been submerged and covered by mud or may have been carrying harmful residue or toxic chemicals. These cars manage to make it to used car lots everywhere and sold to unknowing buyers. Look for mildew or mud underneath carpets, trunk floor, gas tanks or door panels. Check the national database using the VIN to see if the car was involved in a hurricane.

4. Use good judgement when purchasing a car online. Find out the automobile market value and be wary of an auto priced below that value. Have the car inspected by a trusted mechanic to help identify any problems. Obtain a detailed receipt stating if the automobile is sold with warranty or "as is" condition.

5. Report fraud immediately. Be a smart consumer and contact your local police, the Better Business Bureau, or any other law enforcement in an event of known fraud. In order to protect the consumer it is imperative that law agencies take quick action against these criminals.