Auto Finance Scam - Yo-Yo Car Financing
April 17th, 2008 at 06:53am By Mike Lambert
Under Buying Used Cars
What it is
I’ve been hearing more and more about this type of dealer scam lately. They get a potential buyer with bad credit, tell them that they have good credit, and offer them a low rate (pending loan approval). The customer drives off the lot with their new car thinking they got a good deal. The phone call comes in a couple of weeks that the rate has now increased, because they didn’t qualify for the low rate.
How to avoid it
The best way to avoid this kind of scam is to get your car loan in advance. Try your bank, or credit union first. Many dealerships would not pull this scam, but there are some out there, so you have to be careful. If the dealer wants you to drive off the lot without a final price and APR, you are at a great risk of this happening to you. Walk away now.
What if it happened
You should contact your state’s Attorney General, and explain the situation to them. You can then report the dealer to the Better Business Bureau. If the rate is high, you can also try to refinance your car through a reputable website.
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