How to Avoid Dealership Scams

How To Avoid Dealership Scams

Buying a car from a dealership can be an exciting experience, but it can also leave you vulnerable to scams. Dealerships want to sell cars and make a profit, which can lead some to use underhanded tactics. Being aware of common dealership scams

and approaching the car buying process with caution can help you avoid falling victim. With some knowledge and preparation, you can have a smooth, scam-free experience purchasing your next car from a dealership.

Do Your Research on the Dealership

Before ever setting foot on a dealership’s lot, make sure to do some background research on the dealership itself. Check for reviews online from other customers, look for any complaints filed with the Better Business Bureau, and see if the

dealership has been involved in any lawsuits or investigations for fraudulent practices. This can give you an idea of the dealership’s overall reputation. You’ll also want to find out as much as possible about the specific car you’re interested in before going to the dealership.

Research the car’s fair market value based on its year, make, model, mileage, and condition. Go to Kelley Blue Book or Edmunds to look up the car’s value so you have a baseline to know if the dealership is inflating the price. Read reviews and check for recalls as well so you go in fully informed.

Do Your Research On The Dealership
Do Your Research on the Dealership

Beware of Extra Fees and Add-Ons

One of the most common tricks dealerships use is tacking on extra fees and optional add-ons to increase the car’s price. They might try to include a documentation fee, certification fee, delivery fee or charge you for an alarm system,

fabric protection spray, or other products you don’t necessarily need. These extras can add hundreds or thousands of dollars to the purchase price. Be wary of any fees or add-ons pushed on you by the dealership. Make sure you understand exactly

what each fee is for and don’t be afraid to question it or negotiate to get it removed. Also decline any optional add-ons you don’t really need. Go over the purchase order carefully to ensure no unnecessary fees or products have been added without your consent.

Watch for Price Hikes

Another common scam dealerships try is advertising a car for one price but then telling you the actual price is higher when you get to the lot. They’ll say the advertised price was for a base model or the vehicle is no longer eligible for the sale price.

This bait-and-switch tactic is meant to lure you onto the lot and get you invested in a specific car you now can’t actually afford. To protect against price hikes, get all price quotes in writing from the dealer before going in. Ask specifically if the

advertised price includes all fees and is for the exact make, model, year and trim you’re interested in. Also be cautious of deals that seem too good to be true, as they may be a bait to get you on the lot.

Watch For Price Hikes
Watch for Price Hikes

Don’t Fall for High-Pressure Tactics

High-pressure sales tactics are essentially tricks used by unscrupulous dealers to get you to make an impulse decision. Saying “this deal is only good for today,” pushing you to put money down immediately, or trying to sell you add-ons by

saying things like “you don’t want to send your kids off in an unsafe car do you?” are manipulation techniques. Combat high-pressure tactics by doing research beforehand and having your budget clearly set, not going into a purchase unprepared.

Be extremely wary of any salesperson who tries to rush you or insists you make an on-the-spot deposit or finance decision. Simply respond with “I do not make major purchase decisions without time to think about it” as needed.

Watch for Lowball Trade-In Offers

Many people trade in their old car when buying from a dealership. This makes you vulnerable to tricks like dealers deliberately undervaluing your trade-in. They lowball the offer so they can turn around and sell your trade-in for much more, pocketing the difference.

Safeguard against lowball trade-ins by knowing your current car’s value first, checking Kelley Blue Book trade-in estimates. Clean your car inside and out to help maximize the value. Consider selling it privately instead to get full market value.

At minimum, take any trade-in offer home overnight to think it over before accepting. Don’t let a salesperson pressure you into taking a low offer on the spot.

Watch For Lowball Trade-In Offers
Watch for Lowball Trade-In Offers

Avoid Unnecessary GAP Insurance

Guaranteed Asset Protection (GAP) insurance is pushed by many dealers as a way to cover any gap between what you owe on a car loan and what your insurer would pay if the vehicle got totaled. Though it can be beneficial in some cases, dealers

often inflate its cost and try to convince buyers they absolutely must have it, which is not the case. To avoid unnecessary GAP insurance, first check if it’s already included in your auto insurance policy or credit card benefits, which is common. Make sure

you understand exactly what GAP coverage protects so you can assess if it’s truly right for your situation. Understand that the coverage is usually cancelable if you change your mind, so don’t let a salesperson pressure you into buying it same-day.

Double Check the Paperwork

Comb through every document before signing anything at a dealership. Make sure the price matches your negotiated deal and includes all fees discussed. Verify no extras like warranties or GAP coverage were added without your consent. Review the

financing terms to ensure the interest rate, down payment and monthly payments align with what you agreed to. Also check for things like an arbitration clause buried in the fine print. In addition to scrutinizing the purchase paperwork, also carefully go

over any financing application and trade-in paperwork. Make sure all details, income amounts and other personal information is correct. Don’t sign anything that has errors or blank sections to be filled in later, which leaves you vulnerable to more scams. Take paperwork home if more review time is needed.

Double Check The Paperwork
Double Check the Paperwork

Consider Bringing Someone With You

Having a trusted friend or family member come along when car shopping at a dealership provides another set of eyes and ears to help spot potential scams. They can help you review paperwork, provide a voice of reason if sales pressure gets intense,

and remind you to walk away if an offer seems too shady. Just don’t bring someone likely to pressure or confuse you. The right companion can give you confidence and support to make the best deal.

Trust Your Instincts

If at any point during the dealership experience you feel uncomfortable, sense you’re being misled, or think the deal just isn’t right, listen to your gut. Unethical dealers rely on pushing customers past their initial uncertainties to make a sale.

The moment you begin feeling pressured or suspicious, it’s usually a sign something is amiss. Don’t ignore those instincts, even if it means walking away from a car you really want. Your safety is more important.

Report Fraudulent Activity

If you believe a dealership or salesperson has engaged in outright fraudulent behavior, don’t let it slide. Reporting the activity can help prevent the dealership from victimizing other customers.

File a complaint with the Federal Trade Commission as well as your state consumer protection office. You can also consult with an attorney about possible legal action if you lost money due to fraud.

Report Fraudulent Activity
Report Fraudulent Activity

Preparation Is Key

Avoiding dealership scams comes down to being prepared, vigilant, and willing to walk away from dealers exhibiting sketchy behavior. Know your rights as a consumer and don’t be afraid to exercise them. Luxury cars like a BMW or Lexus are

investments that bring years of enjoyment. Don’t let an untrustworthy dealership taint the experience. Follow these tips and take your time, and you’re much more likely to leave the lot with nothing but excitement about your new vehicle.

common car dealership scams

  • Spot delivery – Letting you drive before financing is finalized, then repossessing if it falls through.
  • Yo-yo financing – Claiming your financing fell through after taking possession, forcing worse terms.
  • Packed payments – Adding warranties, insurance, services without consent.
  • Loan packing – Sneaking in add-ons to your loan for dealer kickbacks.
  • Oil change – Claiming your new car needs immediate service.
  • Alarm install – Adding third-party alarms not actually required.
  • Trade-in undervaluation – Lowballing trade-in value to resell at higher price.
  • Fine print tricks – Hidden fees, penalties, arbitration clauses in paperwork.


What to do if scammed by car dealership?

Document everything including paperwork, receipts, ads, and correspondence. Escalate the issue within the dealership by speaking to sales manager and GM. Consult a lawyer about your options based on specific scam. Report the dealership to consumer protection agencies and online review sites. Be persistent in seeking a fair resolution.

Car dealership scams Reddit?

Reddit has many threads devoted to sharing car buying scams experienced at dealerships. These include spot delivery scams, yo-yo financing, packed payments adding unapproved items, undervaluing trade-ins, misleading advertising, bait and switches, and improper disclosures. Reddit provides a place for consumers to warn others and get advice for dealing with scams.

Dealership service scams?

Common service scams at dealers include recommending unnecessary repairs and maintenance, padding the time for services to overcharge, performing repairs not consented to, charging for repairs not actually done, and damaging other parts deliberately to charge more. Always get a second opinion, review itemized bills, and request documentation for any recommended service.

Illegal things car dealers do?

Some illegal activities dealers engage in are odometer fraud, selling salvaged cars without disclosure, forging customers’ signatures, discrimination, false advertising, offering kickbacks, and credit fraud. These violate consumer protection laws. Consumers should report illegal behavior to state attorney general.

Car dealer add-on scams?

Shady dealers push overpriced add-ons like fabric protection, extended warranties, VIN etching, and alarm systems using deception and high-pressure tactics. Learn which add-ons provide value and read all contracts carefully. Never let the dealer rush you into any purchase same day. Research legitimate costs of add-ons outside the dealership first.

Dealer options to avoid?

Avoid “dealer prep,” nitrogen filled tires, door edge guards, excessive fees, longer loan terms to reduce payments, and extended warranties. Do your own inspection, research fair fees, and stick to terms you can truly afford. Extended warranties from manufacturers are usually better than third-party. Focus only on what you need.

Car dealership financing scams?

Shady dealers falsify application info, charge excess fees, delay loan approvals, lie about rates, and pack loans with add-ons without consent. Get preapproved yourself, don’t inflate income, monitor paperwork for proper terms, and avoid dealers pushing their financing. Third-party lenders are usually better options.

Car dealer trade-in scams?

Dealers lowball offers, lie about issues to lower value, don’t allow appraisal until sale commitment, pressure quick acceptance of offer, and make more off the trade-in. Research accurate value beforehand, correct issues that lower value, and be willing to sell privately for a better deal.


Buying a car can be one of the most expensive purchases a person makes. With so much money on the line, it’s no surprise that some dealerships resort to scamming and taking advantage of unknowing customers. By becoming aware of the tactics

commonly used by unscrupulous dealers, consumers can educate themselves and avoid becoming victims. Do your research, know your rights, bring someone you trust, and don’t be afraid to walk away and take your business elsewhere if you feel

pressured or misled. Buying a car should be an exciting experience. By staying vigilant for red flags and trusting your instincts, you can have peace of mind that you made a smart purchasing decision without any of the stress of dealership scams and tricks.

Enter the car buying process with confidence by following these tips, staying patient, and protecting yourself and your hard-earned money at all costs.

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