Protecting Both Business Finances And Futures

What are some examples of auto dealer fraud?

On Behalf of | Mar 26, 2020 | Auto Dealership Law |

When the time comes to replace your old vehicle, there are many factors to consider, including whether your dealer engages in legal and fair business practices. Fraud can and does occur, as The Sacramento Bee recently reported regarding the case of a well-known California car dealer. Learning the facts about auto dealer fraud and some of the unfair practices you might encounter may help avoid buying a vehicle from a scammer. 

Affirmative representation  

This type of fraud usually involves both the dealership owner and his or her salespeople, who might misrepresent the actual cost of a vehicle, to assure you the car has the features you are looking for even if they are absent and inflating the cost of a down payment after you sign off on the deal. 

Non-disclosure fraud 

While dealership laws exist to protect you as a car buyer, some dealerships may try to find loopholes to avoid fraudulent behavior. For example, some salespeople may tout a vehicle as a certified pre-owned when it was never passed through any type of certification inspection. Another example of non-disclosure fraud is misquoting or withholding information regarding the actual value of a vehicle. 

Credit score fraud 

If you need to secure financing and a dealership notifies you your credit score only qualifies you for a high-interest loan, you may want to verify this information with a credit union. Some dealerships use this type of fraud to secure high-interest car payments to inflate their profits. 

While these types of fraud are common in the dealership sector, there are ways you can protect yourself. Remain aware of your rights and finances and stand firm in the face of a high-pressure sales approach. 



FindLaw Network