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Auto Loan Scams

Used car loans and the salesmen that peddle them have copped a lot of flack throughout history. The fast-talking, paper-pushing-pressure tactics that some car yards and showrooms use often have the Average Joe signing away more than he should for his latest possession. The following are a few common ways to spot scams when applying for used car loans and some effective methods for avoiding them.

The Online Auto Loans Scam.

There are reputable auto loans specialist operating on the Internet, however there are also some who are at the ready to rob you of your hard earned cash and even your identity! Car salespersons will use these few disreputable examples to try and debunk your confidence in your online auto loans authenticity. They will try to move you into one of their products, which will no doubt attract a longer loan term, higher fees and more interest.

Use word of mouth and past recommendations to get an idea of the more trustworthy companies dealing with online auto loans and stick to your guns if you are happy with your online financier.

The Bad Credit Dance.

Another wily method of car dealerships taking advantage of you during your auto loans progress is to question your credit history. They may exaggerate the level of ‘bad credit’ that you have and use this to leverage you into a higher interest loan with extra fees. If possible run your own credit check before going to apply for any auto loans – and don’t be bullied by a salesperson claiming to know more about you than you do!

The Rejection Route.

You sign your auto loan papers and drive off in your new (used) car. A week later the dealer calls to say finance fell through and requests either a gap payment or wants to move you into a different loan altogether (with higher payments and refinancing fees).

Basically, nobody, regardless of how good looking you are, is going to let you drive away with a $25,000 vehicle if they aren’t positive of the status of the finance. You’ve been scammed!

Occasionally, they will even use this opportunity to sell you a more expensive car, thus adding to your auto loans cost. If you couldn’t afford the first car then how on earth are you going to pay for the Porsche they are now offering…alarm bells should be ringing!

The Accidental Application.

In all the back and forth of paperwork that can occur during a car loan application – it’s possible that you may be asked to sign for an extra loan that you really didn’t need or want. This could be extra insurance, extended warranty, or may even be intended to replace your original loan papers (such as your pre-approved online loan).

Read everything that is put in front of you to sign. It might be a boring 5-minute task, but could potentially save you thousands of dollars in money later and the embarrassment of being a ‘sucker’.

These are just a couple of ways that you could be ‘had’ by an auto loans scam. Combine these with all of the emotive and hard-selling techniques that you can be faced with in a car yard and it’s obvious why buying a car is renowned for being a stressful event. Arm yourself with all the information you can and get ready to take a solid stance on what you will and won’t put up with from a used car loans company.