A lot of motorists dream of purchasing a new or almost new car.
As a rule, future automobile owner goes to a car dealership because they don’t trust private sellers or car auctions. It would seem that you cannot expect a dirty trick from a car dealership, but not in all cases.
This article will consider the main frauds of car dealerships aimed at obtaining additional, but not always legal, profit.
Two Types of Car Dealers
First, it should be mentioned that car dealerships are divided into two types: those of official dealers and those of so-called “gray” dealers. It’s quite easy to distinguish one from the other; official dealers represent only one well-known car brand, while unofficial ones position themselves as multi-brand (representatives of several auto concerns at once). The methods of cheating customers in these subgroups are often similar, although they have certain differences.
4 Top Car Dealerships Fraud Types To Note:
1. Imposition of Additional Services
The most common method of deception by car dealerships is the imposition of additional services that are ancillary income for the car dealership. The profit from the imposed additional options isn’t subject to taxation and isn’t subject to withdrawal by representative offices of automobile companies since these criteria from beginning to end are an invention of the sales managers themselves.
By hook or by crook, services and ancillary options will be imposed on the client at inflated prices. Moreover, the margin varies from 100% to 1000%. The buyer will be quite surprised when he is offered to purchase floor mats, a set of seasonal tires, an alarm system, a radio tape recorder, etc. for a fabulous price compared to their real value.
If a customer wants to buy a car in the basic configuration without additional options, the manager will dissuade him in every possible way. One of the main methods in this case is time. The buyer is informed that it’s the basic configuration that isn’t available and isn’t expected in the near future.
It’s possible to order such a car, but the minimum delivery time is six months. Naturally, the client has to choose from what is offered, and they unwittingly agree to the terms of the car dealership.
2. Pledge
Pledge is one of the favorite types of fraud if we speak about “gray” dealers. On the website of the car dealership, you can see vehicles whose prices are slightly lower than those in official dealerships. By reaching the call center and asking all their questions, a potential client receives confirmation of the price and availability of this automobile at a particular car dealership.
Arriving at the address, he finds out that the car is in stock, delivery will be carried out within a few days, and a deposit of a specific amount (most often a small one) is required for the automobile booking. Upon agreement, a contract drawn up in a cunning way is concluded, in which the client puts his signature without bothering to read it carefully.
After the deadline has passed, the potential buyer arrives at the same car dealer and is shown another vehicle, which is radically different from the automobile in the photo, right down to its make. On the demand to return the deposit, the client is pointed to a previously concluded agreement, under the terms of which the amount of the deposit remains at the checkout of the car dealership under any circumstances.
3. Price Deception
The deception of the price isn’t a rare type of fraud in the “gray” auto salons. The site hosts a beautifully photographed car, and under the photos is an equally attractive price. After inspecting the vehicle, the client doesn’t find any flaws. The documentation doesn’t disappoint, either. At the registration desk, the customer signs the necessary documents, and then it turns out that the price of the car has almost doubled.
As a rule, documents of this kind contain clauses in which conditions that are unfavorable to the client are written in small print. Most often, the cost of car dealership services is equal to the cost of a vehicle. It’s unlikely that there will be any sense in going to court demanding a refund since the deceived client agreed to all the terms of the contract with his signature.
4. Absence of a Car
The following situation is very similar to the previous type of deception. The client finds a car on the site, negotiates with the manager by phone, and upon arrival at the car dealer, doesn’t find it on the spot.
The sales management team apologizes and asks to wait, explaining that the reason for the absence of the car is something like: system failure, traffic jam, detailing, and so on. In the USA, this method is called “Bait and Switch,” when a customer is offered a more expensive car compared to the previously desired one.
The dealership specialists are invariably polite with potential buyers and offer them tea or coffee. In the meantime, managers give a contract of sale for signing since the car is already on the way. They offer this contract for signature several times, arguing that it has errors in drafting.
After a couple of hours of waiting, the person runs out of patience, and it’s at this moment that it turns out that the long-awaited vehicle has arrived. The client is given the final version of the sales contract for signing, which he signs almost without reading. That is likely caused by fatigue and nervous tension.
In this final version, unscrupulous representatives of the car dealership can add any conditions—from an inflated price to extortionate interest on the loan.
In the End
As you can see, there are several ways a car dealership can manipulate potential buyers and cheat them. At the same time, any person can avoid these issues when buying a vehicle if they read an agreement carefully and ask as many questions as possible.
Remember that you need to plan everything and approach the purchase of an automobile with all the responsibility you have. To be completely sure about the car in front of you, check the history of the Vin code and Monroney sticker. It may take a small amount of money and time, but it will save you money spent on the car.
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