How to Avoid Getting Scammed by Bad Credit Car Dealerships: Tips and Strategies

There are numerous dealerships in the market, but not all are genuine. Some bad credit car deals offer you unfair financing terms and conditions that can lead to big problems down the road. While there is no surefire way to avoid scams, there are some strategies you can use to protect yourself. This guide will help you spot scams when searching for a car with bad credit.

Signs It’s a Big Scam

You’ve probably been scammed before. You might be thinking, “That isn’t really a scam.” However, when buying a car on loan with a bad credit score, you might be in for a shock if you don’t know the signs, such as:

  • Unnecessary Add-ons: The dealer lures you into purchasing add-ons like extended warranties or rust-proofing that are not necessary for the vehicle you’re purchasing.
  • Bait and Switch: The dealer advertises an appealing offer, such as a low price on a car, but when you visit them, they tell you the vehicle is no longer available. Instead, they offer a more expensive option.
  • Fabricated Fees: You’ll be charged extra fees on top of the agreed-on price without prior information
  • False Trade-In Value: The dealer offers a low trade-in value that is not reflective of the car’s actual market value
  • Yo-Yo Financing: The dealer sends a message that you’ve been approved for low-interest financing regardless of your bad credit, and then, after signing the contract, they claim that the deal fell through

Learning the signs of shady bad credit car dealers might not seem like something to be concerned about. After all, your credit is already severed, but that doesn’t mean you’re not a target. 

How to Avoid Bad Credit Car Dealership Scams

Having less-than-perfect credit predisposes you to auto loan scams. They know you’re a risky borrower, and your financing options are limited, especially if other lending institutions have rejected your application. A few precautions will help you escape lousy credit car dealership scams.

  1. First, Read and Understand the Fine Print Before You Sign Anything

This means perusing all the contract documents thoroughly and knowing what each covers. Some dealerships will try to make it as difficult as possible to grasp the terms and conditions so you can give up reading and end up signing the dots quickly, so be prepared!

  1. Only Drive the Vehicle Off the Lot After the Dealer Approves Financing

Auto financing should be approved within ten days. Deceitful dealers can cancel the original contract if they’re losing money from the original contract. So, they’ll call you later to ask you to sign another agreement (with higher interest) or return their car and sign a buy here, pay here option. Do not take the car home before you are fully qualified for financing to avoid this.

  1. Avoid Short-Term Car Loans (6 – 7 Years)

A short loan term is riskier than you think and will cost you higher interest. Due to high interest, it may be challenging to keep up with monthly payments.

  1. Never Trust Verbal Promises

Do not buy something based solely on a dealer’s word about its condition or value. You should always get a written agreement and an in-person commitment

  1. Know Your Credit Score

When you know your credit score, you can be sure that the dealership is offering the best deal possible for your situation. If not, move on and find something better.

Don’t Fall For it

Buying a car can be very stressful if you have a sub-par credit score. With so many offers in the industry, it isn’t easy to know whom to trust. Bad credit car deals are everywhere. Good car dealerships low credit act in good faith and get it right with the customers, but some dishonest dealers will try to pull a con game over on you.

Are you worried about getting scammed by a bad credit car dealership? Follow the above tips, and you’ll be safe.

Last Updated on March 20, 2023

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