In house financing is usually a rich source of scams. Dealers usually apply these methods to increase their profit. Any car buyer can be a victim to this kind of scam. This could be avoided by knowing the most basic concepts involved in this type of financing. There are also a lot of available tips that could help you prevent dealers from playing these tricks on you.
1. When you plan to apply for in house financing, take note of the actual price of the vehicle and the interest rate involved. Don’t just focus on the monthly payments for these are just parts of the bigger picture. Avoid giving car salesmen the idea about how you wish the payments would be. This allows them to alter the loan term by extending it and earn higher profits.
2. Know your credit score because most car dealers would take advantage of your lack of information if you don’t. The most common scam of this type is that the salesman would make you believe that your credit score is bad and he is not sure if they can finance you. The salesman would then tell you that he will talk to his manager if they could find ways to help you. After a few minutes, the salesman would return and offer you a loan with higher interest rate. This technique is probably a scam
3. Accept the fact that loans have interests. Don’t fall for loans that offer zero interest for six months. Dealers would always find a way to gain the profits lost from the zero interest offer. Dealers would then charge you with hidden fees to earn the profits lost.
4. Read the loan contract carefully before signing. Make sure that you know all of the conditions in it so as to prevent the dealer from altering the contract to earn larger profits.