Car loan fraud. Car trade in scam.

Car loan fraud, a guide to avoid it.

It is hard to avoid what you can’t see. That is why armies get their soldiers to wear camouflage patterns on their uniform. Can you imagine fighting an invisible enemy. That is what guerrilla warfare is all about and some of the largest Empires in History have fallen prey to it. Something similar occurs when we get involved in businesses or industry sectors we don’t have much experience in. We might have great experience and knowledge in other subjects but we are thrown in a new territory and we are like a new born in the jungle, easy prey.

Car loans and car finance are fertile grounds for scams and fraud because people rarely have to get a loan. Unless you are a serial car buyer you are likely to only buy a few cars in your lifetime. With such a great variety of car loan types and finance products to choose from it is hard to know how to get it right. This article and all the articles in this website www.talkingcarloans.com are aimed at improving your understanding on car loans and car finance. This article will focus on one of the tactics car loan brokers and dealers are using to trick car buyers and borrowers.

Trading in your old car seems like a sensible way of making some extra cash towards your new car. In some cases car dealers will give you great deals to provide an incentive for the buyer. However it is generally a good idea to sell your car on your own terms. More often than not you will get a better price. An important thing to remember is to negotiate the price of the new car without taking into account the trade-in car. Once you have negotiated a price you are happy with then talk about your old car.

The scam we are describing in this article affects clients that trade in a car that still has a loan attached to it. Say you own an old Toyota Celica and want to buy a newer model. However you still have 2000$ to pay on your good old Celica. No problem, the car dealer will buy your Toyota at a great price, and then they will deal with all the details. As we mentioned above this is an option. Probably not the best option, but one that can in some situations work. However a small group of dealers have converted this process into a scam. After taking in the car that still has a loan attached to it the car dealer then “forgets” to pay for the car loan payments. The bank of finance provider that owns the loan on the car obviously takes “you” the owner to court, it is your credit and your name that is affected.

The solution is simple. If you must trade in your car, and there is still a loan on it, make sure you get in writing that the car dealer will carry on paying the loan or cancel it altogether