When you’ve finally decided that you want to buy or get an auto loan for a new vehicle, the last thing you want to experience is being deceived. Although there is usually some wiggle room in terms of negotiating prices and options, it is important for dealerships to be upfront and honest with potential buyers – especially in today’s car buying market.
How do you know if you are being taken advantage of through deceptive practices? Here are some warning signs to be on the lookout for.
Forcing Prospects into Financing
With the supply of vehicles dwindling, some dealers are becoming more aggressive in terms of their sales efforts. Some may only be promoting financing directly through them first, before the customer can buy their desired vehicle.
This type of “buy here, pay here” option may be quite tempting for consumers. The problem with this type of deal is that oftentimes, the interest rate may be higher than you’d pay elsewhere. It’s important to find out what your interest rate will actually be first, before you decide where to finance your vehicle.
As a buyer, you always have the right to get an auto loan or financing from a third party (like your local credit union), and not just with the dealership. Don’t feel pressured that through the dealership is the only means of financing your ride.
Used Car with No Title
When deciding to buy a used car, be sure that the dealership or seller provides you with its actual vehicle title – saying that they have it isn’t enough. Don’t get stranded by buying a used vehicle that still has an existing loan on it.
Cars that have outstanding auto loans will still have their titles held by the bank and not with the dealer/seller. Another thing to keep in mind here, is that without a title – you’ll be left with a car you can’t register, and therefore can’t actually drive.
Asking You to Sign an Arbitration Clause
A dealer that requires you to sign an arbitration clause is another warning sign that you may not be in the right place. This type of clause means that in the case of disputes, it will require the dispute to be resolved through a third party.
Unfortunately, this third party will almost always lean toward the business filing the dispute – since they are typically paying the arbitrator’s fee. Asking you to sign an arbitration clause simply means that your best interest as a buyer, is not at heart.
Now you know some of the most common warning signs that car buyers should be aware of when looking to purchase a vehicle. By following the tips provided, you’ll be able to protect yourself and your purchase – whether you’re buying a used or new car.
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*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms and conditions may apply. Actual rate may vary based on credit worthiness and term. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. Current loans financed with First Financial FCU are not eligible for review or refinance. A First Financial membership is required to obtain an Auto Loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See credit union for details. A $5 deposit in a Base Savings Account is required to establish membership prior to opening any other account/loan.