Purchasing a new car from the dealership leaves you open to dealership scams, but what about when you need to refinance your car loan?

Many of the scams are the same as you will encounter when buying a car. Here are the best tips for avoiding any of the refinance scams that dealerships force you through.

• Get your own credit score and bring it with you to the dealership
• Don’t pay a cash deposit for your financing loan because if the deal goes bad, you can’t get your deposit back
• Don’t apply for a car loan until you have been employed for at least 6 months if you are a recent college graduate
• Apply for your loan online so you can avoid getting ripped off
• Learn to fix your credit before you apply for a loan. Get your credit score to at least 680 first.
• Pay off your credit card debts before you look for a new car.
• If you have recently moved wait 6 months before applying for a loan. You addresses are always verified. If you move a lot, they will not trust that they can keep track of your whereabouts should you make late payments etc.
• Having been approved for a loan in the past helps
• Don’t get a co-signer for your loan because often times you will find that the deal is solely in the other person’s name

Whether you’re refinancing or not, whenever you are considering getting a new car, you should be sure to bring all of the information that will help you to get the best deal you can.

This will all be included in your “folder”. Here is a list of all of the information that you will want to include in your folder.

• A copy of your credit report.
• New car purchase prices for the cars that you are considering.
• Accurate pricing data, rebates, tips and incentives.
• Credit pre-approval in writing.
• Insurance quote that covers the coverage that you want on your loan.
• Used car blue book that has used car information and market values
• Extended warranty quotes.
• Current loan rates that are in your local paper

Many of these items can be easily obtained online.

Bringing all this information with you will literally cut the legs out from under the dealer. It shows that you are one step above the various scams that you will encounter.

When I mention the options, I mean the ones that you can’t avoid. Some cars come equipped with a CD, sun roof etc. and these are fees that you can’t avoid paying so sure to account for these at the beginning. You should also be sure to account for any buyer rebates as well in calculating your offer.

Calculating your offer to a dealership is as simple as that. When you are considering how much you can afford for a car, be sure that you don’t get sucked into paying more than you want.

If you are unwilling to pay more than your opening offer, let the salesman know that your offer stands firm and how they will profit from the offer.

In the end you will get what you want on your own terms. Here’s an example for you.

You are hoping to buy a Toyota Camry. You do your research and find that the invoice price is $19,922; MSRP is $22,385. The dealer may offer you the car for $22,000, and shows you the invoice.

You learned by researching that there is a $500 factory to dealer incentive; and a $447 holdback on the MSRP (2%).

Based on the above calculations, the dealer’s real cost is $19,922 (invoice) – $500 (incentive) – $447 (holdback) = $18,957. This is far below the factory invoice number.

Now, if you add the 5% for your offer to that price, which will up the car price to $20,379 due to the addition of $455 for the destination charge that is always present, you will see that based on the offer that the dealership offered, you just saved yourself $3410.

This may seem complicated but you can find a pre-designed spreadsheet on several online car sites that will do all the calculations for you.

Going into negotiations knowing exactly what you’re willing to give for a car will give you the advantage every time…and possibly save you several thousand dollars in the process.

1. Written contract scam: This is basically when the finance manager sits you down and begins to write himself into frenzy, while quickly throwing numbers at you until you are so confused, you end up paying more than you agreed upon.

This may seem impossible for a person to get away with but believe me; it happens all of the time. The finance manager is counting on you being confused and desperate to get out of there, so assumes you will simply go along with whatever he says.

Most of the time, it works. But you can avoid it by forcing the guy to slow down, and calculate right along with him to make sure that you are getting a fair deal and that you both come up with the same numbers.

2. Price beating scam: This is when the dealer tells you that they will beat anyone else’s prices or give you $500.

They simply ask you to get the price from another dealer and they’ll beat it. The hard part is that other dealers will not just hand over their information for you to take to someone else.

This deal is almost impossible to get because most dealers sell different makes and models anyway. so it’s practically impossible to find the exact same vehicle with the exact same color, options, etc. at another lot. Avoid it by not buying into it in the first place.

3. I won’t get paid scam: This is when the dealer tells you that he won’t get paid if you don’t purchase the options package. This is a tug at your heart strings. They want you to feel sorry for them.

To avoid this simply tell them that you refuse to buy something you don’t want just so that they get paid. If it’s that much of a problem they should get another job.

4. No payments until scam: This is when a dealership advertises that you don’t have to pay for 6 months.

Next thing you know, you buy the car and they tell you that it is due for payment in 2 months. Some will not even be applicable at all.

These despicable characters will claim a typographical error or that the deal was a week ago. It’s an outright lie, and you should get your deposit back.

Avoid this by asking the dealer to put that in writing before you purchase the car and make your deposit by credit card so that you can refute it.

5. The “We’ve Got it scam: This happens when you call a dealership asking for a specific car make, model and color and are told that they have it.

However, when you get there, you are told that they miraculously sold the only one they had before you arrived. Next they will tell you that they have another car similar to it for only $500 more. Avoid this by leaving at once.

6. No Cheaper rate scam: This is when a dealership tells you that you can’t find a cheaper price anywhere else on the market.

Of course, if you’ve done your research, you already know that the prices don’t change on the value of a car. Avoid this by simply stating that they must be right, and then leave.

When you go into a dealership, you want to know all of the pricing and costs of the car that you are looking into buying, as mentioned earlier.

You should know the manufacturer’s cost and the dealer’s cost. You need to calculate the cost that the dealer paid for the car and then make a reasonable offer to him if you want to get somewhere.

You should also know that the dealer’s price is not the invoice price from the factory. You should know that the dealer’s cost is much lower than the factory’s cost.

In order to make a fair offer to a dealership, you need to learn to read a factory’s invoice. Here is what you can expect to find on the factory invoice. · Base model of the car · All of the options packages · Destination charge · Holdback and dealer flooring help

Quick Tip: DO NOT confuse the invoice with the MRSP window sticker because they are not the same.

Contrary to popular belief, dealers don’t have to tell you the invoice on any car. This often gives the dealer leverage over you.

They can offer you one dollar over the invoice. You should know that there are hidden factory incentives in the invoice price that lowers the cost of the car for the dealership. It’s no bargain for you.

If a dealership is very quick to show you the invoice, you should be aware that they are fully aware that they will be making money on that car off of you and they can settle at a lower price for the car.

Knowing this before you walk into a dealership can be your best negotiating strategy. See, they will tell you that you can afford to buy the car at MSRP hoping that you will not then wonder what the actual worth of that car is.

But you can make them the same offer. If you offer a few dollars over the factory invoice (which is the actual worth of the car) then you can open your bid and let them know how much profit they can make off of your offer.

There’s a variety of websites than can give you the factory invoice on virtually any vehicle. Just do a search on “factory invoice”.

Dealers are always going to try and tell you that they paid less for the cars than they actually did so that they can make a higher profit off of the sale.

Salesmen often try and make you feel guilty by telling you “I’m losing my shirt off of this deal”.

In truth, you are the one that is losing your shirt off of the deal, so don’t buy into it.

You just need to remember that dealer cost is not the same as the factory invoice.

Some dealerships refuse to haggle over the cost of a car. Once you make your opening offer you should never accept anything higher than that, as far as costs go.

If the dealership that you go to doesn’t haggle, don’t sweat it, some other dealership will. There’s too many nice cars out there to fall in love with just one.

The reason some dealerships refuse to haggle is because they want to add extra fees to the MSRP. You will need to decide what kind of buyer you are in order to get a negotiating stance.

You do not want to set yourself up as a monthly payment buyer either because that is a guaranteed way for you to get a higher payment fee.

They will offer to take a little bit off of the MSRP. They will then ask you what you are looking to pay each month; this is where the extra money comes in.

Cash buyers are generally asked, “Are willing to pay each month?” Tell them it doesn’t matter because you are looking for an even division on the cost of the car, not to haggle over the monthly cost.

And tell them that you are looking to haggle over the cost of the car, not the monthly payments. This is often used for cash buyers.

If a finance manager tries to get you to report your payment method before you have decided upon purchasing the car, don’t get sucked into it.

The method of payment doesn’t matter unless you are deciding upon purchasing the car. Finance managers ask so that that they can best decide how to screw you over.

Some dealers will offer you to give you a better deal if you finance your car through them. I can guarantee that this will not be the case.

But the worst thing that you could be an impulse buyer.

An impulse buyer is just another word for “victim.” Impulse buyers can often get sucked into the “hot” car of the moment and usually get taken for as much as $10,000. A dealer can see this buyer coming from a mile away.

If a dealer approaches you about the “hot” car tell him that you are not interested because it will not be worth the money next year as the new “hot” car will be out by then.

You don’t want to buy a car that is in demand because it is the easiest way for a dealership to mark up the prices. The MSRP always looks low, but it is the extras and monthly payments that will lose you money.

Remember the resale value of the car doesn’t change no matter how much money you bought the car for. It still depreciates in value from the factory invoice.

When you are trying to negotiate with a car dealer, you should know that they are very practiced in the art already. You will need to know how to get through their “car speak” in order to be successful.

Since you now know how to calculate your offer and already know what the dealer paid for it, you should get a copy of the paperwork from a friend that recently bought a car, so that you can become familiar with what you will see on your paperwork. They are all generally the same.

If you’ve followed the above mentioned tips, you will also be pre-approved for a loan. The key is for you to get in and out of the dealership as quickly as possible because the salesman will definitely find more loopholes to up your charges if you stay.

Here are a few tips to successful negotiating. · Remain positive and confident · Don’t talk down to your opponent · Show up prepared and ready to counter anything that may come up · Bring ads from other dealerships with you as an extra weapon · Finance your loan before you arrive at the dealership so as to avoid paying unnecessary extra fees · Bring a friend with you for extra support

Something that you should look out for from salesmen is the extra little tricks that you will likely encounter that will try to force or rush into a buying decision.

You have to remember that they are trying to negotiate you into paying more money just as you are trying to negotiate paying less. Here are some of the things that you can expect to hear from them.

1. “These cars are flying off of the lot. It may not be available for the same deal tomorrow”. (Threaten to leave and they will ease up and try to change their strategy)

2. “This deal is only good for today. If you come back tomorrow I can’t guarantee that the deal will be the same”.

3. “I’m an honest man. Look at how many cars I’ve sold this weekend” (This is where he will show you his list of sold cars. If he does this, then tell him that he doesn’t need your money).

4. “I hate to tell you this but I have another offer on the table from a man that is willing to pay more money than this. I am just waiting for his paperwork to be returned”. (Tell him that if he promised the car to someone else, you don’t want to step on someone else’s toes and that you should leave then).

5. “To cover the overhead costs, we have paid $13,000 for this car.” (Just check your paperwork in your folder and prove them wrong).

Be forewarned–these people are as slick as an ice rink covered in baby oil, and will do ANYTHING they can to pull the wool over your eyes and the bucks out of your wallet. Because the more they suck out of your bank account, the more commission they’ll receive and the more they can slap in THEIR bank account.

So don’t fall for the lines. Do your homework, stay firm in your offer, and walk away if it’s not to your liking.

1. The Dealer Mark up Scam This is an unnecessary fee that the dealer charges for no reason other than greed. This fee can be seen on the orange sticker marked on the manufacturer’s suggested retail price (MSRP).

The additional dealer markup is nothing more than requiring more money for no real reason. They can include all kinds of extra fees in the additional dealer markup.

When you see an extra dealer mark up fee, ask the dealer to get rid of it. If they refuse, it is pretty much up to you, but remember that if you do pay the extra dealer markup, you are overpaying for no real reason.

2. The Payoff Your Loan Scam This is when the dealer offers to pay off the balance of your current car loan no matter how much money you still owe. It is a common sales strategy.

When the average buyer hears it, they think that by purchasing a new car with a new dealership, they will automatically owe no more money on their current car.

That couldn’t be further from the truth.

What really happens is that the dealership does help you get out of your current contract; however, they normally are forgetting to tell you how high your fees are going to be for breaking the lease agreement with your old dealership.

You will now be responsible to pay fees that are in the thousands to make up for it.

You also will not be able to refinance for a new car until those fees are paid. Of course the dealership can add the cost on to your contract with them at a substantially higher rate.

The dealership only agrees to this deal because they want to get more money off of your current car. They aren’t really doing anything for you at all.

The dealership will also give you far less then the car is worth on the trade off. Basically this scam works because they will up your monthly fees, and then sell your trade in for a more money than its worth.

The dealership then extends your monthly payments so that they can make it appear that you are paying a small amount monthly when you don’t even realize that you have committed to an extra year of payments.

To avoid this scam, you have to bite the bullet and ride out your current lease till the end. If you are really determined to get a new car, then you should try selling your current car on your own so that the buyer just takes over the lease payments.

Here’s 5 quick tips to know before heading into the dealership…

1. You can easily avoid a common scam that dealerships pull. You will often hear that your financing fell through and that you have to respond by paying more money on your loan.

Don’t believe it. Get a copy of your credit information online at a website like Equifax, so you’ll know exactly where you stand with your credit scores.

2. Another common scam by dealership salesmen is for them to tell you that they have found you a lower rate, but that they want you to re-sign your loan papers.

Usually, that is a downright lie. Once they pull up your financing information, they have the upper hand if you don’t know the details about your credit information.

Again, it’s another great reason to get a copy of your credit score before shopping for a new or used car. They only cost about $10-$15 and it’s better to pay $15 now than thousands later.

3. Don’t bring in a car for trade in if you still owe money on it. The dealership rarely pays the rest of the loan on time which will result in you having to pay a great deal of late fees to the bank.

If you do decide to bring a car in that you owe money on, get it in writing from the dealership that they will pay the balance on the car within 10 days.

4. Sometimes a dealership may not have all of your options and must order the car directly from the dealership. If this happens they will often ask you to pay $500-$1000 for a deposit on the car.

Try not to pay more than $500 and be sure to pay with a credit card. Sometimes the dealership will tell you that there was a price increase on the vehicle and will want more money.

If you pay with a credit card you have room to dispute the amount being taken from you. If you pay by check, you can just consider the money gone.

5. You should never buy a car when you are in desperate need for one. A dealer will see that and take advantage.

For example, never wait until an old car is dead before searching for a new one. Give yourself time to shop around for one and get the best deal possible. Desperation often clouds your judgment.

Getting a good deal on a new or used car is easier than you think. You just have to be prepared before entering the dealership. And these 5 tips will help you drive out with the car of your dreams…at a savings that will make you smile.

Here’s 3 common scams that a shady dealer might try to pull before buying a car…

1. The Used Car Sold “As Is” Scam This is when a dealership will sell you a car that has been in a car wreck, but they will tell you that the car has been completely refurbished.

When you see the car it has a sticker on it that says “as is” on it and no warranty is included with your purchase.

This is the dealer’s way of telling you that you can’t bring the car back, you are assuming all risks for the car, and that it is not under warranty.

To avoid this scam, don’t buy a car without a warranty or one that says “as is” on it. By doing this, you might as well buy a car from a stranger on the street with the same deal.

2. The Bounced Check Scam This is when you walk into a dealership with a bank draft and the dealership says that they can’t accept your draft because your bank bounces checks too often.

Of course, this leaves the table open for them to get the extra money they want by offering to sell you a car at a higher interest rate.

You can avoid this scam first by getting your drafts from an online auto financier like Capital One or Eloan.

Then let the finance manager know that you are aware of the scam that they are pulling and thatyour chosen auto finance company is in the business of giving loans so the checks don’t bounce.

3. The Forced Credit Application If you are hoping to pay for a car outright or in cash with a bank draft or check, watch out. Some dealerships will not let you.

You will hear one of these lines so that they can try and get you into paying monthly terms for more money.

“State laws require that you must fill out a credit application before I can sell you this car.”

“Everyone that buys a car from us fills out a credit application first.”

“It’s the company’s policy”.

If you hear any of these lies, then know what’s going on. When you are paying cash why would you think that you need to fill out a credit application?

It doesn’t make sense. No state will force you to apply for credit when paying cash.

Would you have to fill out a credit report if you want to buy a sofa or groceries while paying cash? See how silly this is. To avoid this scam, just laugh in their faces.

And if you see any of these tactics used by a car dealer, run–don’t walk–to get out of there.

Dealerships will pull out all the stops to make sure they sell you a car. Here’s a few car buying tips to help you save tons of money on your next new or used vehicle.

1. The Credit Score Scam – This scam is ridiculous at best. This is when the finance manager tells you that your credit score is lower than it really is so that they can get you for higher interest rates.

This scam is pulled on everyone; good or bad credit.

This scam is easy to avoid. Just get your own copy of your credit report online, and bring it with you.

It is really difficult to lie to you about your credit score if you have your own copy of it. If your paper and theirs doesn’t say the same thing, go somewhere else because that dealership is lying to you.

Don’t forget to let them know it too because it’ll be nice to watch them squirm.

2. The Forced Warranty Scam - This is when the finance manager tells you that you are not eligible for the loan by the bank unless you pay an extra $2000 for a 2-3 year extended warranty.

This scam just doesn’t make sense. Basically the finance manager is telling you that the bank won’t trust you to pay the $20,000 loan for the car, but they will trust you if you pay even more money. That’s just stupid.

You can avoid this scam if you can force them to put it in writing that you “have” to pay the extended warranty in order to get the loan.

That way you can bring a copy of the contract to your local State’s Attorney’s office to verify that the deal is valid. I can bet that the finance manager will change his tune pretty quickly.

3. The Dealer Prep Scam – Let me first let you know that this cost is not only legal but very much common practice. I still refer to it as a scam because it is just another way for you to end up paying more money for the car.

Basically the dealer will tell you have to an extra $500 to cover the labor costs of the dealership’s 5-point inspection. You are paying for the time it took for the dealership to make sure that the car wouldn’t explode on you in the first week of owning it.

This check up that you are paying so much money for is for the dealership to remove plastic from the seats etc, vacuum the car out, and making sure that all of the fuses and fluids are ready to go.

When factories deliver the new cars to the dealerships the cost of delivery and prep is already covered, so basically you are paying the dealership for work that they haven’t really done.

You can avoid this scam by simply asking the dealership to add an extra $500 credit to the deal to make sure you do not have to pay the money.

If they refuse, you can then decide if the car is worth the money. If it is fine; buy the car, if not; go to another dealer that will remove the dealer prep costs.