Are you looking to finance your business vehicle purchase with an auto loan? If so, protect yourself from scammy lenders – here’s how.
The overwhelming majority of lenders and auto dealers keep their transactions above-board when dealing with good, fair or bad credit car loans; but all it takes are a few to keep you wary of the scams out there. The trick is, as with many things, to be informed; this acts as a buffer against even the smoothest-talking salesperson’s unethical tactics.
You’ll learn about the four major types of car-buying scams in the following article. Whether you choose to go with a reputable online vendor such as badcreditauto.loans or a big-bank option, being armed with this knowledge is a benefit in any future transactions with anyone.
Online Financing Should Be an Option
As a part of the auto loan process, you’ve likely already received a pre approval notice from an online lender, given the convenience and ease of doing such things via computer.
Now, what if you approach an auto dealer with your financing offer, and they tell you that they don’t want to deal with this? You should definitely avoid this lender – no matter what excuse they give you. It simply isn’t trustworthy, irrespective of any experiences they may claim they’ve had in the past with other customers. In all likelihood, they’re trying to set you up to accept a higher APR and loan terms that benefit them to your detriment.
Are You Being Pressured to Find a Cosigner?
If so, this is another reason to avoid the offending lender. Although you probably can get a better interest rate and overall loan terms if your credit history is poor, you might want to think very carefully about the nature of your relationship with a prospective auto loan cosigner. Remember; financial hard times can afflict anyone, and in the event that you cannot pay, you’ll be leaving a family member or close friend with all the fallout. And this can happen in ways that you cannot help them with – such as a hit to their credit history.
The main thing to look out for here is the paperwork. In high pressure environments, an auto lender may try to bait and switch what you sign, and give you a copy that is different from the one you saw and signed – but identical at first glance. Be alert, and identify your signature on all documents.
Never Leave the Lot Without the Loan Approval Documents
This is simply a case of making sure all legal documents are present, irrespective of the nature of any conversations you have with the lender/dealer. You are not friends, and if you have issues with bad credit, it can be easier to take advantage of you. What could go wrong, you ask?
Let’s say the car dealer allows you to claim the car and drive off the lot – with promises that the financing will be completed the next day or sometime next week. What sometimes happens is you’ll receive a call telling you that the financing didn’t proceed, and you will have to take the deal they offer or your car will be reclaimed. This is called a yo-yo auto loan, and is a result of unscrupulous dealers and careless customers. Never agree to take a car until you are in possession of the approved financing – or you can view online that it went through.
Watch Out for the Lemon
This, of course, refers to the largely unusable car that was advertised as an adequate used car. It generally happens to people with bad credit, since they’re the easiest to take advantage of.
Watch out for the “As Is – No Warranty” signs on cars with almost unjustifiably-low sticker prices; you know the old saying – if it looks too good to be true, then it probably is. Get the CARFAX or other report on the history of the car.
In sum – don’t count on the dealer or lender to protect you; as always, only you are responsible for doing that. Good luck with your endeavor in purchasing a car for your company.