The automotive industry has a long history of facing various scams, dating back to its early days. Recent instances have shown that these scams have evolved and continue to affect many individuals.

To protect yourself and others from falling victim to such scams, it's crucial to be aware of new and common fraudulent practices. Stay informed about the latest tactics scammers use and be cautious when engaging in any car-related transactions. Education and awareness are key in preventing these fraudulent activities.

Marketplace Sell

Involve scammers renting out cars and reselling them on platforms like Fiverr or Facebook Marketplace at a significantly lower price, making it an attractive deal for cash buyers. The scammer creates a fake title for the car and sells it to unsuspecting purchasers. Unfortunately, victims have little chance of recovering their money unless the perpetrator is identified and the victim pursues legal action against them.

Bait and Switch

Bait and Switch is a deceptive tactic commonly used by dealerships. It occurs when a salesman initially provides a price quote for a vehicle, but when it comes time to finalize the deal and sign the contract, the price on the contract is higher than the quoted price. In addition, the contract may include additional fees that increase the Total Cash Price of the vehicle. This practice aims to lure customers with an attractive initial price, only to switch it with a higher price during the contract signing process.

Advice: By staying vigilant, comparing prices, and refusing to sign contracts with discrepancies, you can protect yourself from falling prey to bait and switch scams. Remember to always be cautious and trust your instincts when dealing with dealership negotiations.

Packing the Contract

Packing the contract involves dealers adding undisclosed fees, unnecessary warranties, or expensive add-ons to the final purchase contract. These hidden costs inflate the total price and can catch customers off guard.

Advice: Scrutinize the contract thoroughly before signing. Ask for an itemized breakdown of all charges and carefully review each line item. Challenge any questionable fees or add-ons and refuse to sign the contract until they are removed or explained to your satisfaction.

Advertising Bait and Switch

Similar to bait and switch, advertising bait and switch occurs when dealers advertise a car or deal that doesn't exist or is not actually available to customers. The aim is to attract potential buyers and then redirect them to different, less favorable options.

Advice: Take screenshots or save copies of any online or print advertisements before visiting the dealership. If the advertised car or deal is not honored, show the evidence to the dealer and insist on the advertised terms. If they refuse, consider reporting the deceptive advertising to relevant consumer protection agencies.

Hiding a Lemon or Wreck

Some unscrupulous dealers may hide a car's history of being a lemon (having significant mechanical defects) or being involved in a major accident. They may perform cosmetic repairs to conceal the damage and sell the vehicle as if it were in pristine condition.

Advice: Obtain a vehicle history report from reputable sources, such as Carfax or Auto Check, to uncover any past accidents or title issues. Additionally, have an independent mechanic inspect the vehicle before purchasing. Their expertise can help identify hidden damages or mechanical problems.

Buy-Lease Switch

The buy-lease switch scam occurs when dealers convince customers to sign a lease agreement instead of a purchase contract, often without clearly disclosing the terms and implications of leasing.

Advice: Familiarize yourself with the differences between buying and leasing a car. Ask for clear explanations of all lease terms, including mileage limits, fees, and end-of-lease obligations. Take your time to review the contract and consider consulting with a third-party financial advisor if needed.

Trade-in Fraud

In trade-in fraud, dealers may undervalue a customer's trade-in vehicle or use misleading appraisal methods to lower its worth, resulting in a diminished trade-in value.

Advice: Research the market value of your trade-in vehicle using reputable sources like Kelley Blue Book or NADA Guides. Obtain multiple trade-in appraisals from different dealerships to ensure a fair assessment. If you suspect a dealer is undervaluing your trade-in, consider selling it privately or seeking alternative trade-in offers.

Co-signer Scam

Dealers may pressure customers into acting as a co-signer for a loan without fully explaining the financial responsibilities and risks involved. This scam can leave the co-signer liable for the loan if the primary borrower defaults.

Advice: Understand the obligations and potential consequences of being a co-signer. Carefully review all documents related to the loan agreement, and ensure that the primary borrower has the financial means and reliability to make timely payments. Consider seeking legal advice before agreeing to be a co-signer.

Requiring Options

Dealerships might insist that customers purchase expensive optional features or packages as a condition of buying a specific vehicle, even if those options are not desired or necessary.

Advice: Clearly communicate your preferences and budget limitations to the dealer. Refuse to pay for options or features you do not want or need. If the dealer refuses to sell the vehicle without the unwanted options, consider exploring other dealerships or contacting the manufacturer directly.

Yo-Yo Sale

A yo-yo sale occurs when a dealer allows a customer to take possession of a vehicle before financing is finalized. Later, the dealer informs the customer that the financing fell through and or something happened with their application asking the customer to return to the dealership and the dealer demands a higher interest rate or additional fees to proceed with the sale.

Advice: Insist on finalizing the financing and signing all necessary documents before taking possession of the vehicle. If the dealer pressures you to take the car without completed financing, be cautious and leave the dealership and seek alternative financing options for another dealership.

Dealership scams are unfortunately a reality in the car-buying process, but armed with knowledge and vigilance, you can protect yourself from falling victim to these unethical practices.

Conduct thorough research, ask questions, review contracts carefully, and be prepared to walk away if something doesn't feel right. Trustworthy dealerships prioritize transparency, fair pricing, and customer satisfaction. By staying informed and being proactive, you can ensure a more positive and secure car-buying experience.

Additionally, you may consider sharing the situation on a platform to warn others about the scammer and the incident. You can also create a report on the Verb Auto Community channel , to spread awareness and seek insight from others for a resolution.