Car loans scams, a guide to avoid them

Car loans scams, a guide to avoid them.
Fraudsters prey on ignorance. My first version of this article said “Fraudsters prey on ignorant people”. I decided to rephrase it because it was likely to carry a critical view of people that are the victims of scam. Political correctness won. However I do believe we all hold some responsibility of the decisions we make. The problem is that car loans like home loans and the finance industry in general is a difficult industry to understand.

Most of us don’t buy cars or home loans every week. We might be very careful of getting a good deal and not being taken advantage of when buying groceries or going to a restaurant but when it comes to something were not used to we’re an easy target. The finance industry in general and the car loans sector in specific is a complicated and in some ways unique market. Cars have become so ubiquitous and necessary most of us will need them at some case. However most of the terms and economical forces that mold the price and cost of car loans are unknown to most of us.
This article will attempt to point out the main weaknesses fraudsters prey on to scam people out of their hard earned money. Fortunately it is quite easy to protect yourself from these attacks, you just need information.
Lying to clients
This is a basic technique in all scams but it especially with financial issues. Because most people don’t understand how loans work, what fees are for or how rates and credit scores are calculated, anything said by a guy in a suit that seems to know what he’s talking about will go. Dealers will tell clients they need to buy a life insurances or loan payment insurance in order to qualify. This is a lie in most cases and countries. Find out the facts and don’t allow yourself to be blinded with science. A smart option is to ask for things in writing and taking them to an independent expert. Don’t take any fee or expense as a given, you have the right of understanding everything you are charged, use that privilege.
Credit score scams
Fraudulent dealers will tell you have bad credit when it is untrue or an exaggeration. Often dealers will provide a credit score that when checked against an authentic credit check turns out to be incorrect.

A famous scam along these lines is to approve the financing of a car. Give the buyer the keys of the car and a month later call up and say the financing for the call fell through. But would you believe it another financing company I know of is willing to take on the car loan. Just one little problem, your bad credit will require the new lender to charge extra fees and a higher rate.
Don’t fall for these lies. Today you can get a loan (or not get it) in minutes. A quick credit check is done and a bank can know quickly if you are risk worth making.