Ever thought of purchasing a car?
Purchasing a vehicle is probably one of the biggest investments any consumer can make today.
Unfortunately due to economic circumstances the majority of vehicle buyers today prefer to finance a vehicle, rather than buying it cash.
The advantage of financing a vehicle is that one can retain ones cash and improve cash flow.
For other users financing a vehicle can be done for tax relief purposes.
Another advantage of financing a vehicle, and only in certain instances, is that the consumer could have recourse against the dealership and/or financing institution in the event troubles occur.
Vehicle financing scams generally occur only with dealerships offering their own finance to consumers.
Well established and reputable financing providers seldom involve in unscrupulous business dealings.
HOW CAR FINANCING SCAMS ARE COMMITTED
These types of scams are generally committed when a consumer applies for vehicle finance.
The dealership will notify the client of approval and request the client to sign the contract.
After signing the finance agreement, the client will be informed that a higher interest rate was required to approve the finance.
In certain instances the client will also be informed that a higher deposit is required for the finance to come into effect.
In other instances clients will also then only be informed that the vehicle needs to be repaid in a much shorter period, along with the higher instalment and deposit.
HOW TO AVOID CAR FINANCING SCAMS
Always be careful of advertisements offering lower interest rates in vehicle finance.
When taking part in these offers you should be aware that:
- You could be required to pay a large deposit in order to get finance approval
- You could be required to repay the finance in a very short time
- You may be required to buy additional options or even sign over a manufacturers? rebate to the dealership
- You may be required to pay the advertised price of the vehicle, and not be allowed to negotiate a better sale price
- Be careful of reserve prices placed on the vehicle, which needs to be paid in full at the end of the finance agreement as a lump sum, as with a lease
It is highly recommended that you discuss such offers with a person with the required knowledge and experience.
By approaching a finance specialist at any dealership you might be informed of any pitfalls you may enter yourself into.