Games Dealers Play: The Incredible Shrinking Down Payment

 Most car and truck purchases are financed at a car dealership under retail installment contracts.   Our attorneys have reviewed thousands of these transactions over the years, and we have learned much about the tricks that car dealerships play in order to maximize their profit – often at the expense of the consumer.  This post is the first in what will be a series on various types of car dealer fraud called the Games Dealers Play.  One of those games isn’t much fun, because it involves the literal theft of a money by dealership employees. We frequently find that there the amount of the down payment shown in the contract documents is different from the amount the consumer paid.  Sometimes the contract shows a higher amount, and we will discuss the several reasons why dealerships inflate down payments in future posts.  But, sometimes, the contract will show less than the amount actually paid.  In these cases, the down payment was almost always paid in cash.  Sometimes the dealership does this in order to illegally avoid taxes – and consumers certainly don’t want any part of that! Most of the time, however, the whole down payment is not stated on the contract because someone at the dealership stole the money.  Here’s an example of how it works: a buyer goes to a dealership with $2,000 for a down payment and can afford payments of $320/month.  The salesman sells a car at a total cost of $10,000 and arranges to finance $9,000 at $320/mo for 3 years.   The salesman takes the customer’s money and turns over $1,000 to his boss and pockets the other $1,000.  If the stolen money had been applied to the purchase, then the loan would have been for only $8,000 – and the consumer could have saved about $36 a month, or almost $1,300 extra over the life of the loan! Consumers should always get a receipt for cash payments to protect themselves from dealership theft.   They should also look closely at their contracts BEFORE signing.