Types of car dealership fraud that you should be aware of

Posted June 23, 2022 by allenstewartpc

Some auto dealerships indulge in fraud when getting customers to sign a car buying contract. There are many ways in which the dealership commits fraud, from financial irregularities to misrepresentation.
When working with a client looking for a new vehicle, an auto dealership can commit a variety of various sorts of fraud. These can include false income figures, reports of bigger down payments, considerably lower recorded expenses, deception, and a lack of openness concerning various aspects of the vehicle.

Many of these could result in criminal charges being brought against you. With the help of an experienced lawyer, it is generally easier to pursue civil remedies. However, many of these concerns are difficult to resolve once the consumer has signed the car buying contract. 

Here are three ways in which car dealerships can defraud customers:

Switching from buy-to-lease - You've decided to buy a car rather than lease one, but the contract you're being asked to sign is confusing. Make sure the contract does not contain the word "lease" anywhere. Dealers will attempt to persuade you that a lease is a purchase. Understand that if a salesperson tells you that you will own the vehicle at the end of the lease, most likely, you will need to make a hefty payment for that.

The "yo-yo" transaction - You buy a car and drive it home in a yo-yo sale. The dealer then informs you that you have been denied financing but can keep the car if you agree to a higher down payment or interest rate. Financing approval should never be used as a justification to renegotiate a contract. If this happens, you can either walk away from the deal or get your financing from a bank or credit union.

Becoming a co-signer - The dealer might inform you that you are merely signing the car buying contract as a reference for the original buyer. Nevertheless, you should know that you are equally liable for repaying the debt if you agree to be a co-signer on a car loan for a friend. If your friend cannot qualify on his own, you will most likely be responsible for the car. Being a co-signer for any form of debt is never a good idea.

For more information, log in to https://www.allenstewart.com/.

About the company

Allen Stewart provides its clients with legal assistance in various matters, including automobile and dealership fraud. They provide free consultation and evaluation of the merits of your fraud claim. 


Address: 1700 Pacific Avenue Suite 2750 Dallas, Texas, 75201
Phone: 214-965-8700; 866-440-2460
Website: https://www.allenstewart.com/
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Issued By Allen Stewart, P.C. Law Firm
Phone 866-440-2460
Business Address 1700 Pacific Avenue Suite 2750, Dallas
Texas 75201
Country United States
Categories Business , Law , Legal
Tags car buying contract
Last Updated June 23, 2022