Five Ways To Spot A Predatory Car Loan
04.07.11
Accommodation packed with Junk fees
Dealers inflate the overall price of the car loan through overpriced add-on products – often sold in packages –including “GAP” insurance, means service contracts, credit life and disability insurance, rust proofing, theft deterrent packages, and “window etching.” By inflating mechanism cost, the dealer is inflating the loan size. As a result, the potential loan kickback for the dealer is increased.
Yo-Yo Sales
The client is either convinced to enter into or unwittingly placed in a conditional sale agreement rather than a final sale. After the buyer drives the carrier home, the dealer later claims to be unable to fund the loan at the agreed-upon terms. The buyer is required to recurrence the car and renegotiate an often more costly loan. Often, the buyer is told that their down payment is non-refundable and/or their trade-in has already been sold.
Source: Consumer Affairs