Auto dealers and the commission-based salespeople staffing car lots profit when people overpay for vehicles. Most people who have purchased vehicles previously understand the basic rules that exist for their legal protection and scrutinize all purchase/loan paperwork carefully.
However, young adults who have just left home and who may have their first-ever professional jobs are often eager to upgrade the cheap cars they purchased when they first secured their licenses. Salespeople and auto dealers sometimes take advantage of young people by engaging in predatory lending practices intended to enrich the business or salesperson at the expense of the young buyer.
What are some of the more common ways that auto dealers may take advantage of young buyers with financing?
1. Using a bait-and-switch tactic
Dealers often get people out to the lot with the promise of low-cost financing and competitive vehicle prices. They may then insist that the advertised price expired or that the lower-priced vehicle is no longer in stock. Buyers then end up purchasing another vehicle that costs far more. Another form of bait-and-switch involves reaching a verbal agreement with the buyer, only to later inform them that they did not qualify for financing and insisting that they must accept much less favorable loan terms.
2. Misrepresenting loan details
Connecticut consumer protection laws require accurate disclosures regarding loan fees, interest rates and other important details about consumer loans. The law also limits the maximum interest rate charged based on the age and condition of the vehicle. Dealers sometimes assume that young adults are unaware of these rules and may violate the law in an attempt to increase their profit margins on a sale.
3. Creating the illusion of control
Vehicle salespeople sometimes ask buyers how much they want their monthly payments to be. They do not necessarily explain to a young buyer that a low monthly payment might mean their loan persists long past the drivable life of the vehicle and may even leave them underwater because of the high interest rate they qualify for based on their limited credit history.
In cases where young car buyers get taken advantage of by unscrupulous vehicle sales practices, they may have grounds to take legal action against the dealership or sales professional. Reviewing any written communication and loan paperwork with an auto dealer fraud attorney can help frustrated buyers understand their legal rights after auto dealers try to take advantage of them.