Top 8 Car Scams You’ll See When Buying or Selling an Automobile

These days, it’s incredibly easy to buy or sell a car. It’s so easy that criminals and unethical dealerships absolutely love it as much as the modern consumer does. As with any transaction, there’s always a risk something will go awry. With a car, you’re making a huge investment, so it’s important you’re dealing with upstanding sellers and buyers. Don’t just believe what everyone tells you without requiring proof — you need to verify identities and do your research so you don’t end up being a victim of a scam.

We’ve gathered 8 of the most common attempts at fraud and scams you might come across in your car-buying or car-selling process.

Packing the contract

This is an issue that requires you to have an eagle eye when it comes to reading through the language in your contract. There are some unethical dealerships that may try to trick you into signing a contract with a ton of options you didn’t actually want. These add-ons might be in the form of warranties, service contracts, and accessories you didn’t ask for. If you’re looking for a new Ford or new VW for sale, for example, make sure that you go to a reputable dealership that garners good reviews online.

Tips to avoid this scam:

  • Always read through the fine print so you can be sure you’re only getting what you agreed upon
  • Make sure any “free” additions to your vehicle are actually free
  • Did you find an item you didn’t want? Tell the dealer that you’re not paying for it – cross a line through the item and reduce the Total Sale Price by that amount. If the dealer puts up a fight, walk away from the sale.
  • Make sure the price of the vehicle lines up with the true market cost

2. Advertising bait and switch

If you see a dealership advertising vehicles for rock-bottom prices – that’s usually a sign of a scam. What will generally happen is that a customer will go into the dealership to inquire about the extra-cheap cars but when you get there, those cars have supposedly already sold. Instead, the dealers will helpfully guide you to more expensive models.

Tips to avoid this scam:

  • Call the dealership before heading down to verify the VIN of the car you’re interested in
  • Take the ad with you if you’re planning on making a trip to the dealership

3. Pricing scam

You’re ready to sign on the dotted line for a car purchase — but just as you are about to put pen to paper, you see that the price on the written contract isn’t the same as what the dealer told you. What do you do? In this case, it’s in your best interest to go somewhere else.

Tips to avoid this scam:

  • Make sure the Total Cash Price on the final contract matches what the dealer told you, and if it’s different? Walk away.

4. Concealing a lemon

You’ve bought a car. It ran fine during the test-drive and you’re excited to take it on a road trip. As you’re driving along, mid-way to your destination, smoke pours from the hood. After getting it towed to a mechanic, you find out that there are a ton of repairs that need to be made. Whoops – you’ve made an expensive investment in a lemon.

Tips to avoid this scam:

  • Always ask for a vehicle’s repair records
  • Have your personal mechanic check out a new car
  • Use a search service like Carfax to see a car’s history
  • Always test-drive a car you’re thinking about buying

5. Financing fraud

A car dealership may attempt to swindle you in many ways. One insidious way they could trick you into paying more is by lying about your credit score. By claiming you have a low credit score, they may try and force you to pay a higher interest rate to finance your new car. Avoid this situation completely by bringing records of your own credit score.

6. Misrepresenting a lease

Make sure you know the difference between buying a car and leasing one. A dealer may misinform you and tell you at the end of a lease term, you’ll own it. That may be true with the caveat that you have to put down a large payment. If they don’t tell you this part, they’re not telling the truth.

Tips to avoid this scam:

  • Know the difference between owning and leasing
  • Read your contract carefully

7. Requiring add-ons

Sometimes, dealerships may try to swindle customers by requiring certain financing or accessories added on to the vehicle to get the deal. This may be illegal and, in any case, you shouldn’t do business with any dealer offering such terms.

8. Yo-yo purchase scam

Maybe you bought a car and you’ve driven it home. But you get home and the dealership informs you that you didn’t actually qualify for financing. They’ll force you to return the next day and press you to pay a higher interest rate.

Tips to avoid:

  • Walk away if the dealership aggressively pursues the higher interest contract.
  • If financing doesn’t happen, the original contract shouldn’t be renegotiated – you should just pursue your own financing


With these scam-avoidance tips, you’ll be a better-informed buyer and one step closer to a beautiful new set of wheels.


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