Some car dealerships will take advantage of inexperienced consumers by overcharging them for their cars. A little advance research can help to avoid being taken advantage of when car shopping.
Connecticut law prohibits car dealerships from charging more than the advertised price of a vehicle. Many dealerships advertise the prices of cars on their websites, in auto sale magazines, and in newspaper ads. They advertise low prices to lure consumers to the dealership. But, if they think they can get away with it, they might try to charge more.
Sometimes dealerships will quote a higher price because a customer has a low credit score. Many banks and finance companies charge dealerships a fee in order to fund cars purchased by subprime borrowers with low credit scores. Many dealerships will add the fee to the price of the car. That is a violation of a federal law called the Truth in Lending Act, which permits consumers the right to sue for damages and attorney’s fees.
Other times, dealerships overcharge consumers just to maximize their profits The sales manager of a large Connecticut dealership recently admitted in a pending lawsuit that he routinely quotes customers the highest price that he can charge without exceeding the credit approval. So, if a bank will still fund the deal if the dealership charges the consumer $15,000 for a $10,000 car, then he will tell the consumer that the price is $15,000. In many cases, dealerships will charge more than the manufacturer’s suggested retail price, or MSRP.
Consumers can protect themselves from being overcharged by doing some research before they go car shopping. Check websites such as www.edmunds.com to get an idea of the fair price of a particular model before going to a dealership. Check out the dealership’s website to see if a car is listed before you buy – you just might find it advertised for a lower price. And, look carefully at the contract documents before you sign anything to confirm that the price that you are being charged is the same as the price that you were promised.
A little advance research can help avoid this type of auto dealer fraud.