Consumers in almost all industries, including the automotive field, can experience fraud. Auto dealer fraud involves car dealers using deceptive and unlawful practices to sell. This can happen at any stage, from advertising to financing.
This guide discusses why auto dealer fraud happens. Here are two of the most common:
A significant number of auto dealers are in Connecticut, with about 270 new car dealers. This means that buyers have a vast range of options. Thus, some dealers don’t make as many sales as they want . Such dealers may use deceptive measures, such as not disclosing crucial information about a car or using bait-and-switch advertising to catch the attention of prospective clients. Thus, deceptions can increase the number of customers and, in turn, sales.
However, this is unlawful. Besides, most dealerships in the state offer legitimate services and attract many customers through referrals.
While increasing the number of sales boosts profit, some dealerships may use scams to maximize profit from a single client. For example, by tricking a consumer into buying unwanted extras like GAP or a service contract, the dealership makes more money because, in many instances, most of the cost of those products is dealer profit.
A dealership can also increase their profits by adding junk fees such as prep charges. These costs are not usually pointed out to the consumer, and they are often hidden in paperwork.
If you have experienced auto dealer fraud, you should understand your legal options to protect your rights.