Financing scams run by auto dealerships

On Behalf of | Oct 26, 2020 | Auto Dealer Fraud

People in New Jersey use their vehicles every day to get to various places that they need to go to. However, cars do not last forever and people need to buy new vehicles from time to time. People have different options on where to purchase their vehicle, but many people purchase vehicles them from various dealerships. When people do this, they most likely did some research into the type of vehicle they wanted and test drive the vehicle they would like to purchase. When they finally find the car and purchase the vehicle it can be an exciting time.

Many people may need to obtain a loan or financing in order to purchase the vehicle though. They may do this through a bank or they may do the financing directly with the dealership. No matter where they obtain their financing though people expect that once all the paperwork has been filled out and they drive off the lot that they own the vehicle. However, some people may receive a call from the dealership later on telling them that they need to redo the loan and to bring the vehicle back.

Examples of financing scams

This usually occur when people receive their financing directly from the dealership. Generally, the dealership has the customer sign a conditional agreement, but that is not usually clear to the customer. The dealership will then shop the loan to various third-party lenders. Sometimes the dealership is unable to find a third-party to buy the loan and other times the third-party will impose certain conditions on the loan.

When this occurs the dealership may then call the buyer and tell them that they must sign a new loan agreement or pay a greater down payment because something occurred with the financing. Usually these new loans have worse terms for the buyer such as higher interest rates. If the buyer does not agree to those conditions the dealership says they will take the car back. Based with this proposition, the buyer usually signs the new loans.

Unfortunately, many people in New Jersey have experienced these types of auto dealer fraud. If they have, they may have recourse against the dealership. Experienced attorneys understand the types of scams dealerships may perform and may be a useful resource.