When shopping for cars, consumers typically fill out a credit application at the dealership. The dealership may then submit the application to multiple banks and finance companies. This is known as "shotgunning".
How Shopping for Cars Can Hurt Your Credit Score
The Yo-Yo Scam: The Car Dealer Takes Back the Car
In the typical Yo-Yo Scam, a car dealership tells the consumer that she is "all set" and that her credit application has been approved. She drives home in her new (or pre-owned) car and shows it off her to her friends, family, and co-workers. About a week later, the car dealer calls and says "There is a problem with the bank. Your application was not approved."
Are Certified Pre-Owned Cars Worth the Extra Money?
Are Certified Pre-Owned ("CPO") cars worth the extra money? A recent article by Tribune Newspapers discusses the increased cost of CPO vehicles, which consumers bought at record levels in 2014. Certified pre-owned cars are supposedly subjected to an extensive inspection by dealerships, who "certify" that the vehicles meet stringent standards established by the manufacturer.
Do You Really Need a New Car?
A recent Consumer Reports article asks the question that every new car buyer should ask before going to the car dealership: Do You Really Need a New Car?:
Games Dealers Play: Powerbooking
Powerbooking is one of the most common types of credit application fraud that car dealers commit. A car dealership powerbooks when it tells a bank or finance company that a car or truck is loaded even though it does not have many of the options that are described.
When Car Dealers Commit Forgery
Do car dealer employees commit forgery? "It is like smoking a cigarette," said one employee of a major Connecticut car dealership. This individual, a salesman who was upset with his employer, had agreed to talk with me about dealership practices. He confirmed what we have long suspected: car dealership employees sign customers names to documents all the time.
If Buying a Used Car, Don't Skimp on the Inspection
The most important thing that a consumer should do before buying a used car is have an independent mechanic inspect the car or truck. A qualified inspector can help car buyers avoid vehicles with serious defects or other problems. Additionally, any minor problems identified in the inspection can help the consumer to either negotiate a better price or convince the dealership to make certain repairs or replace worn parts.
Games Dealers Play: Trade-In Games
The advertisements seem too good to be true: the car dealership will give you $3,500 for your trade-in, regardless of condition. Many consumers who have trade-ins with serious problems find these offers impossible to resist. But, be careful, because these advertisements are deceptive and are a type of auto dealer fraud.