Common Car Dealer Scams Exposed in 2023

Unethical Car Dealer Scams Can Be Costly

These are the most common car dealer scams committed in today’s unethical dealerships.

It can be costly and almost impossible to prove a dealership scammed you after the fact. The best way to avoid the situation is to know how to recognize and avoid a scam before you become a victim.

Negotiation Process Car Dealer Scams

These secret tricks of the trade are committed mainly by unscrupulous salespeople and their sales managers during the negotiation process of buying a car.

Addendum Sticker

One of the deceitful tactics widely practiced by devious car dealers is a dealer add-on, which aims at maximizing their profit. These dealer add-ons are bloated well above their actual cost.

Addendum sticker dealer scam

Cosigner Auto Loans

When customers don’t qualify on their own for financing, dealerships often suggest that they get a friend or family member to co-sign. The cosigner ends up being the primary buyer, and it all goes downhill.

Cosigner auto loans dealer scam

Dealer Added Options

Most dealers will attempt to sell you useless but high-priced add-ons such as fabric protection, loaner cars for life, maintenance packages, undercoating, etc. How to recognize and avoid this widespread dealer scam.

Dealer added options car buying scam

Excessive Dealer Fees

Dealers may include excessive fees, such as a dealer prep fee, to increase the profit margin made on the sale of a new or used car. Learn how to recognize these fees and what to do about them.

Car dealer prep fee scam

FLEET Manager

There are not many dealerships out there that have an in-house FLEET department. So what happens if you call and ask for the FLEET manager and they say, “Let me transfer you?”

FLEET manager car dealer scam

Step-by-step walkthrough on how to buy a new car | New Car Buying Cheat Sheet

Payment Packing

When, without your knowledge, the dealer raises your monthly vehicle loan amount to include back-end goods like an extended warranty

Payment packing car dealer scam

Purchase Lease Switch

When negotiating car payments and the salesperson shows you a payment plan much less than the last payments presented, it’s time to regroup. If a deal on a car seems too good to be true, it probably is.

Purchase-lease switch car dealer scam

Straw Purchase

A vehicle straw purchase is when someone who qualifies for an auto loan finances a vehicle for someone else who wouldn’t be eligible. When a dealer leads you to have someone buy the car for you, it becomes a scam.

Straw purchase car dealer scam

Trade-in Value

Most car buyers don’t think much about the actual value of their trade-ins. Dealers know they can make an easy couple hundred (or thousand) dollars by not telling you what your trade is worth.

Trade-in value car dealer scam

Finance Process Car Dealer Scams

Scams committed during the finance process of buying a car are some of the most costly to the consumer. They’re tough to prove, and typically it’s too late to do anything about it once you’ve signed the paperwork.

Trade-in payoff

This scam can happen when a dealer conveniently forgets to pay off your trade within the time allotted with your previous lienholder. This leaves you ultimately responsible for the remaining balance.

Dealer didn’t pay off my trade-in scam exposed

Deferred Down Payment

When you are purchasing a car and don’t have quite enough money for a down payment, be very cautious about the dealer’s offer of deferred down payment.

Deferred down payment dealer scam

How to buy a new car under factory invoice price and get a great deal.

Forced Auto Warranty

When a dealer or finance manager tells you the warranty or other backend products are required to get the loan approved for the car. This is false. If you don’t want the warranty, it is your right to decline it.

Forced extended auto warranty scam

Spot Delivery

A practice called “spot delivery” sometimes pulls new or used car buyers back into the dealership to pay higher interest rates and more significant down payments.

Spot delivery car dealer scam

Credit Doesn’t Qualify

The dealer runs your credit and then tells you that you don’t qualify for the best interest rate, but he can still get you decent financing. You sign at a higher interest rate than you are eligible for.

Credit doesn’t qualify car dealer scam

Car Dealership Advertising Scams

Car dealers are masters in the art of advertising. Some of the most controversial car dealer scams dealers commit do with how they advertise on the television, radio, Internet, and in the newspaper.

All Credit Applications Accepted

Very similar to the guaranteed approval scam. This widespread dealer advertising tactic is used to drive people with bad credit to the dealership so they can cherry-pick the individuals that can finance a vehicle.

All credit applications accepted car dealer scam

Bait and Switch

One of the oldest tricks in the book. This sneaky dealer scam is commonly used in advertising and over the phone to get you to come into the dealership. Learn how to recognize it and avoid it altogether.

Bait and switch car dealer scam

Guaranteed Credit Approval

There’s no such thing as guaranteed approval, but many dealerships will use this type of advertising scam to get buyers on the lot that have less-than-perfect credit.

Guaranteed credit approval car dealer scam

See what your vehicle is worth before contacting a car dealership.

Key-Mailer | Direct Mail

Mail flyers from car dealers that say you’ve won cash or prizes are bogus ploys to get you to come to the business. Once in the dealership to collect your prize, the salesman will do whatever it takes to get you to buy a vehicle.

Key-mailer car dealer advertising scam

We’ll Pay Off Your Trade

This statement is just a play on words to make you believe something that is not necessarily true. A dealer will not pay more money for your car than it’s worth.

Pay off your trade no matter how much you owe

Slasher Sale

A few of the different types of dealer event sales are the Super Saturday Sale, Credit Union Sale, Push, Pull & Drag Sale, $29 Acquisition Sale, Recent Bankruptcy Sale, Give Away Sale — and the list could go on. Here’s how they work.

Slasher sale car dealer advertising scam

0% Interest Available

Zero percent car financing isn’t a scam, but qualifying for it cannot be easy. If you qualify for 0%, you will typically only be able to finance the vehicle for a very short term.

0% interest auto loans available dealer scam

Used Car Dealer Scams

Used car scams are rampant in the retail car industry. Not having a used car inspected before buying it may cost you thousands of dollars in the future. Not only do you need to have a used car inspected by a mechanic, but you also need to review its life history.

Certified Pre-owned Vehicles

Buying a certified pre-owned vehicle or CPO is not a sure thing. Bad cars often slip through the inspection process and become “certified” with underlying issues.

Certified pre-owned vehicle car dealer scam

Rebuilt Title Vehicles

It is not illegal to buy, sell, or drive a salvage title vehicle, but it is illegal to sell a salvage title vehicle if its title does not say it is a salvage title vehicle. Learn how to recognize and avoid buying a rebuilt title vehicle.

Rebuilt title used car dealer scam

More About Car Dealer Scams

Are they car dealer scams, fraud, or just clever manipulations of wordplay? Car dealer scams committed by dealerships and their salespeople cost consumers thousands of dollars daily.

I’m not talking about all dealerships in general; some car dealers are hard-working individuals just trying to make an honest living. The problem is you never know what kind of dealership you are dealing with when you walk into a dealership.

Then there are the not-so-nice dealers actively practicing the art of deception and will lie, cheat and steal from customers. Some of these dealers and their staff will try and take you for every penny you have, and they’ll do anything to get it.

Hope for the best; prepare for the worst!

Every day there’s another “new sale” or “new event” to lure you into a dealership. It’s ultimately your responsibility to ensure you don’t become a victim of one of their scams.

So the best thing to do is familiarize yourself with the most common car dealer scams currently being committed in dealerships today.