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What are some types of auto dealer scams?

California residents looking to buy a new or used vehicle should be aware of the many different types of scams used by automotive dealers.

Buying a new car can be an exciting event for California residents. Whether purchasing a brand-new vehicle or a used vehicle, getting new wheels can offer people a new sense of freedom and responsibility.

Sadly, the process of buying a new vehicle can all too quickly become marred by the unethical practices of some automotive dealers. How can auto consumers spot potential scams? What types of scams are common in the world of vehicle sales? There are several types of scams used but following are some examples of a few to watch for.

Adjusted odometer readings

Main Street explains that in the 1990s there was a big problem around the country with auto dealers changing the odometer readings on vehicles. This allowed them to sell used cars and trucks at prices higher than what they should sell for because the mileage appeared to be lower than what was accurate.

Technology has evolved yet this problem still exists. In fact, there are said to be more reported cases of falsified odometer readings in California than in any other state. Idaho and Nevada are also noted to have a high incident rate of rollbacks on odometers.

Running detailed reported on used cars is one way that consumers may be able to prevent being scammed by dealers who partake in this practice.

Unscrupulous financing deals

In 2010, Dodd Frank gave the U.S. Federal Trade Commission some jurisdiction over truth in advertising for automobile dealers. The Los Angeles Times reports that said jurisdiction was expanded in 2015 to loan applications as well.

One financing scheme currently being alleged in use at multiple dealers throughout Southern California is referred to as yo-yo advertising. These work essentially by dealers placing ads targeted at people known to have credit problems. The ads are intended to make these consumers feel they have a better chance in getting auto financing at their dealers than at other dealers.

When consumers come to the dealerships, they are allowed to drive new vehicles home even without the financing details being completed. Once home, they are told the original financing didn't work and more money may be needed from them if they want to keep their vehicles.

Incomplete sales transactions

ABC30 indicates that a used car dealership in Clovis closed its doors in December of 2015 but that was only after allegedly selling vehicles to people without completing all elements of the transactions. As many as 100 people have actually been paying on auto loans for vehicles they do not actually own in the end. The dealership is said to have failed to complete paperwork with the state. The future of the ownership of these vehicles is unknown at this time.

Consumers deserve fair treatment

California residents who are concerned that they may not have been treated fairly by an automobile dealer deserve help. Talking to an attorney at this time is important. The right professional may provide insight into the law and how to seek compensation for such wrongs.

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