Vidya Sethuraman
India Post News Service
Cars are one of the most expensive things people buy. Car buyers can lose thousands of dollars — and wind up without much needed transportation — if they’re not careful in making the transaction. From misleading ads and deceptive sales pitches to the small print in the contract, from the phony online car selling to the yo-yo financing schemes learn about the warning signs that should prompt auto buyers to walk away. Speakers at the EMS Briefing on Feb 4 highlighted the red flags to watch and how to be cautious. This briefing is part of a multi-year ethnic news media initiative by the FTC to alert diverse audiences to consumer fraud.
Daniel Dwyer, a financial attorney with the Federal Trade Commission, said car buying is one of the largest purchases by Americans, and car-buying fraud is the fourth-largest source of economic fraud handled by the National Consumers Association.
Fraudulent practices in car purchases and purchase loans are the most common scams. Whether buying a new or used car, do your research ahead of time, Dwyer said. Also, pay attention to the dealer’s sales advertisements, as many advertisements have strings attached, which may have pitfalls, such as a monthly payment that suddenly rises after a few months, or a mileage limit, or only available to new customers. If you want to take out a loan, it is best to get approval from the bank before going to the car dealership, otherwise there may be hidden pitfalls if the dealer is required to provide loan options.
Experts added get a copy of your credit report before you visit the dealership. Visit www.AnnualCreditReport.com or call 1-877-322-8228 to get a free copy. Your credit report has information that affects whether you can get a loan — and how much you’ll have to pay in interest to borrow money. Get an “out-the-door” price of the car in writing before you visit the lot, and before you talk about financing with the dealer.
Compare financing offers from several creditors and the dealer. Remember, don’t focus only on the monthly payment — the total amount you’ll pay depends on the negotiated price of the car, the APR, and the length of the loan.
Elizabeth C. Goodell, a lawyer at the Legal Aid Agency in Central Minnesota, said that many new immigrants like to buy cars from car dealers who speak their own language, but in recent years, many fraud cases have happened among immigrants.
Experts say that if people find themselves defrauded by buying a car, they can report it to the business administration department or consumer association, and they will send the relevant complaint to the government investigation department. Report fraud, scams, and bad business practices at ReportFraud.ftc.gov.
NMVTIS-approved providers offer vehicle history reports to consumers, car dealerships, and financial institutions. But not all vehicle history reports are available through the NMVTIS website. Reports from other providers sometimes have additional information, like accident and repair history:
- AutoCheck.com
- Carfax.com
- Vinaudit.com
