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How to avoid scams when buying a car

A communications manager for the Better Business Bureau recommends checking these seven steps off your list before buying a car.

GRAND RAPIDS CHARTER TOWNSHIP, Mich. — Buying a car can feel like a daunting process, and with a myriad of contracts and deals, many people are afraid of being swindled when they walk into a dealership.

In a 2019 study surrounding trust in West Michigan, The Better Business Bureau (BBB) serving Western Michigan found used car dealers were among the least trusted industry.

Troy Baker, communications manager for West Michigan's BBB said car "scams" are some of the most common complaints in his organization's field each year.

"One of the biggest complaints that we see is someone who says, 'I bought this car, and now there’s this problem with it,' or, 'they told me it had this problem' or 'they told me it was gonna be good. They told me that had it inspected'," Baker said. 

Don’t believe them. Even trustworthy people, you need to have a healthy skepticism."

However, he explained that a majority of the complaints don't hold much legal standing, as customers signed contracts locking them into a deal. 

"If you’re buying used, often it’s as is, so whatever’s wrong with that car becomes your problem...Once you sign your name on that purchase agreement, that car is yours," Baker explained.

While some car-selling tactics may leave the customer confused, Baker said most are perfectly legal and it's up to the consumer to do their research. Here's a breakdown of what the process looks like.

Go to the right place

It all starts with finding an accredited place to do business. Jim Ferenz, general manager of Preferred Chrysler Dodge Jeep Ram in Muskegon, said customers should look for signs of credibility.

"We’re J.D. Power and Associates approved. Look for a sign like that. Look for a sign from the Chamber of Commerce. Look for a sign from BBB. If you see those types of things, you know you’re working with a good company," he said.

Credit: WZZM

Ferenz also advises buyers to look at the sales system and policies of each dealer before getting too far into a purchase. His staff is non-commission based, and workers get paid on volume customer satisfaction. 

"We're not persuading customers to go to a specific vehicle because it has the profit in it more than others," he explained, noting that his company also allows a three-day return policy to best fit customers' needs.

Companies' reviews, licensing and history can also be found on the BBB's website.

Figure out what you want

Whether a driver is buying a car new or used, Baker said it's important to walk into a dealership with a well-researched idea of what they want. 

"Decide what is it you want to buy. How much should it cost? What should the mileage be on it, should it be used or new? What kind of wear and tear is acceptable on it or normal on that? So you know what you’re looking at when you walk into the dealership, you’ve got some ammunition," he explained.

Get uncomfortable

It's important for customers to advocate for themselves to get the deal and quality product they deserve, which can seem awkward when speaking directly with a salesperson.

However, Baker said when it comes to money, it's always a good idea to go the extra mile for checks and balances. He recommends all used-car purchasers request inspections of the vehicle before purchase.

"It’s uncomfortable to say, 'okay thank you. I think I like this car, but I don’t really believe you when you say this is a great deal, and everything’s good on it. So I’m want to take it over here to this guy.' But I tell you what, that is really going to save you, because they can identify things, even little things that you can then negotiate to get repaired on the vehicle before you buy it," he explained.

Ferenz said his team encourages customers to take vehicles for test drives and inspections.

"If they want to take it to a third party inspection, not even here at the dealership, we encourage them to do that. That’s going to make us all feel more comfortable because they know and we know they had a stamp of approval from somebody else, and that way there’s gonna be no hard feelings if something did go wrong," he said.

Get it in writing

If a buyer has an inspection done and there are areas that need mending, it's important to work out the details in writing. Baker with the BBB said the same idea applies to all aspects of the purchase: price, warranty, repairs and more.

"When you buy a car, there’s a lot you’re signing. You’re ripping through document after document. Slow down. Make sure you know what’s happening, so you’re fully informed and you don’t miss something," Baker said. 

He added that putting details in fine print is going to be a costumer's best bet at holding a dealer to their agreement in the future.

"We hear from people who come in and say well this person told me they were going to fix this and it never got fixed. If it’s not in writing, it’s gonna be hard to hold them to it," Baker explained.

Know your rights

Customers have every right to ask questions and speak up if they feel like a deal isn't right for them. Similarly to feeling uncomfortable, Baker cites "West Michigan Nice" or an aversion to conflict as a big factor in people feeling duped or later regretting their purchase.

"I think most of us have gotten into the process of buying a car, and gotten to a point where they’ve started to second guess, and they go, 'wait, is this really what I want to do?' But you have that little pang inside of you that says wait a minute, I’m so far in. I can’t just walk away now. Yes, you can," he said.

Customers have the right to walk away at any point in the process before they put their pen to paper. However, once a customer signs on the dotted line, the deal is final and the car is theirs and can not be subject to illegal spot deliveries. 

Watch out for scams

Illegal spot deliveries occur when an auto industry dealer delivers a vehicle to a buyer before the financing on that vehicle is completed. 

Baker said it's one of the most common scams he sees in the auto industry and often plays out with buyers with low credit. They will often go to low-credit dealers. 

The dealer will sell the buyer a vehicle, then try to sell the contract to a bank or credit union. However, if that financing falls through, the dealer will tell the buyer they need to return the vehicle to the dealership or make them re-sign for the vehicle under different terms.  

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"The Secretary of State's Office, which licenses car dealers, and the State Department of Insurance and Financial Services, says that's absolutely illegal...If they can't sell that contract to a bank, they have to accept your payment. You get to go and pay them every month instead of the bank...If you've kept up on the payments, that's your car," Baker explained.

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Close the deal

Buying a car doesn't have to be a scary process. Baker said there are many reputable dealers to choose from in West Michigan. Once a customer finds a deal that's right for them and understands all points of the agreement, a purchase can be made.

"There are good, trustworthy used-car dealers out there. You just got to go looking for them. So just make sure you do the homework on the front end, will really save you a whole lot of hassles later on," Baker said.

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