3 Dealership Warning Signs for Car Buyers


3 Dealership Warning Signs for Car Buyers

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When you’ve finally decided that you want to buy or get an auto loan for a new car, the last thing you want to experience is being cheated by the dealership. Although there may be some wiggle room in terms of negotiating prices and options, all car dealers need to be upfront and honest in dealing with potential buyers.

How do you know when a new or used car dealer is taking advantage of you through deceptive practices? Here are the warning signs that indicate you’re in the wrong dealership.                                                                                                                                                     

Dealers Forcing Prospects To Get Financing From Them

With the supplies on vehicles dwindling, a growing number of dealers are becoming more aggressive in terms of their sales efforts. One example is that some dealerships are forcing prospects to get financing directly from them first before they can buy their desired vehicle.

This type of “buy here, pay here” scheme may be quite tempting, especially for people who really need their own transport vehicle yet have bad credit. The problem with this type of deal is that the interest rate can be quite high (19 to 29% interest or even more).

These dealers may also sell extended warranties that will provide themselves a guarantee that you’ll continue making payments even if the vehicle breaks down. You can easily end up spending three to five times the car’s worth by the time you’ve settled the deal

It’s important to know that you always have the right to get an auto loan or financing from a third party and not just with the dealership. If the dealer stands their ground, just walk away and find another that offers better deals.                                                                                                            

Used Car Has No Title

When deciding to buy a used car, make sure that the dealership provides you with its actual title – saying that they have it isn’t enough. Countless car buyers have been stranded when they found out that their dealers sold them a used vehicle that still has an existing loan.

Cars that have outstanding auto loans will have their titles held by the bank and not the dealer. Another thing to keep in mind is that the dealership can easily forgo paying the loan and you’ll be left with a car you can’t register.

Asking You To Sign an Arbitration Clause

A dealer that requires you to sign an arbitration clause is another warning sign that you’re in the wrong shop. This type of clause means that, in case of disputes, it will require the dispute to be resolved through a third party.

Unfortunately, this third party will almost always lean towards businesses filing disputes since these dealers pay the arbitrator’s fee. Dealerships that ask you to sign an arbitration clause simply means that they don’t have your best interests at heart.                                                                                                              


These are some of the most common warning signs that car buyers should be aware of when visiting dealerships.

By following the tips provided in this post, you should be able to tell if a dealer is shady whether you’re buying a used or new car.


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