The world of used car dealerships has gotten somewhat of a bad reputation over the years – it’s hard to think of the term “used car salesman” without picturing some slick, greased-back guy in a cheap suit trying to sell you a lemon of a car.
However, today’s world of used car dealerships is much more reputable. It’s quite rare to find a dealership that’s looking to take advantage of car buyers – 99% of all used car dealerships are totally legitimate, and offer great cars for good loan terms – even for those of us with poor credit.
However, there are still some bad apples out there. Some used car dealerships prey on folks who have bad credit and are in desperate need of a car – and they give the rest of the other legitimate used car dealers a bad name. These car dealerships usually finance loans themselves, which makes them far more likely to tack on hidden fees, offer higher or variable APRs, and pull other underhanded tricks that put money in their pockets – and take it out of yours.
So to help you avoid being taken advantage of by a scammy, dirty used car dealership, we’ve put together a quick list of the 4 signs that a used car dealership may be trying to scam you with a predatory loan. Take a look – and learn how to avoid these underhanded dealers.
Your Dealership Is Financing The Car – Or Getting Kickbacks From Their Lender
Generally, you should avoid financing a car at a used car dealership. This is because they have a financial stake in making your loan as expensive as possible – by raising your interest rates, for example, they put money directly into their own pockets.
This can also happen if they use an unscrupulous lender – these lenders offer kickbacks to car dealerships if they hike up interest rates on customers.
It’s not uncommon for these lenders to offer very low “buy rates” – low interest rates on the initial purchase of a car – and then tell you that the fees have increased since you first expressed interest.
If you’re truly desperate for a car, you may accept a much higher APR – meaning less money in your pocket, and more for the dealership.
To avoid this, make sure that your dealer partners with legitimate lenders – and doesn’t finance their own loans, in-house.
You’re Seeing A Lot Of Junk Fees On Your Invoice
If you’re financing a car, a used car dealership can pack in extra “junk fees” and tack them onto your car loan. This means a higher loan – and more money paid to the dealership through high interest rates.
A scammy dealership may try to tack on delivery fees, inventory fees, preparation fees, theft deterrent packages, rustproofing and paint protection, and even insurance like GAP protection and other unnecessary items.
While some of these fees can be legitimate, it all adds up to higher monthly premiums – and if the used car dealer is financing your loan, that means more money directly in their pockets.
Take a close look at extra fees and other items on your invoice – if there are quite a few, it could be a sign that you’re not dealing with an above-board used car dealership.
Your Sales Agreement Isn’t Final – “Yo-Yo” Sales.
This is perhaps the dirtiest trick, that a used car dealership can pull. They offer you a great rate on a loan – and you sign up, thinking you’ve gotten a good deal. However, this is not the final sale – merely a “conditional sales agreement.”
A day or two later, you’ll get a call from your dealership – they can’t fund your auto loan at the initial rate, and you have to return your car – or accept a much higher interest rate. You’ll also be told that your trade-in has also been sold, or that your deposit is non-refundable.
Essentially, these schemes hold your car hostage – and force you to pay an exorbitant interest rate to avoid losing the money you paid for non-refundable deposits and fees.
To avoid this, ensure that your sales agreement is absolutely final – and if it’s not, simply walk away.
You’re At A “Buy Here, Pay Here” Dealership
BHPH dealerships take advantage of the desperate and needy. Usually, they offer car loans that are financed in-house to just about anyone, regardless of credit – but have enormous APRs and hidden fees associated with their cars, and usually require large down payments.
This allows them to sell cars to those who need them most, get a large sum from the down payment and couple of months of high-APR payments, and then repossess the car if the owner is unable to pay – then resell that car again to continue the cycle.
This leads to low-quality cars, sky-high APRs, and a totally unscrupulous business method. You should never do business with one of these dealerships. Their entire business model is based on taking advantage of people.
Avoid Scams! Buy Your Used Car From Ride Time – Even With Bad Credit!
If you have bad credit in Winnipeg – or anywhere around Canada – you don’t have to worry about being taken advantage of just because you need a vehicle. At Ride Time, we understand that bad things happen to good people – and we believe everyone deserves a second chance.
We have a unique partnership with 15+ lenders in Canada, and we can absolutely guarantee you a fair loan at a reasonable rate – financed not by us, but by a third party lender.
If you have a valid Canadian driver’s licence, have had a job for more than three months, and take home $1,500 or more per month before deductions, we can 100% guarantee you a great auto loan on a fantastic used car.
So avoid scammy car dealerships, dangerously high-interest, variable APR loans, and hidden fees. Visit Ride Time’s new dealership in Winnipeg, or take a look at our website to see our stock of high-quality used cars, trucks, and SUVs.
We work with a network of high-quality logistics companies to deliver our cars all over Canada – and even internationally – so if you see a car you like, get in touch, regardless of location.
Don’t get scammed. Don’t be taken advantage of. Choose Ride Time today.