It's one of the most adversarial situations most people find themselves in; sitting across from a car salesman whey they're buying a car. To make matters worse, most people are woefully unprepared for it. It's like a trip to the dentist. You know it's necessary, so you tolerate it, but don't really take any steps to make the visit better. You can stop that abuse suffered at the hands of your local car dealer right now. There's no reason they should have all the ammunition in this conflict, is there? If you were aware of some of the dealer scams, you could prepare and turn the tables, right? Now, most car dealerships are ethical, honest businesses, however there are those that deserve their reputation for sneaky, underhanded tricks and outright scams.

Car dealer scam #1 - You must fill out a credit app.
Many people know they are in a better position to negotiate if they have their auto financing prearranged before they venture down to their local dealership. That takes one arrow out of the dealer's quiver. After all, in one sense, the car is just a vehicle to sell you a financial product. In many cases, an unscrupulous car salesman will tell you that you are still required to fill out a credit app because of the Patriot Act. That is, to put it bluntly, a total load of bunk.

Section 326 of the Patriot Act requires banks and other financial institutions must get all your personal information before you open a new account, but it says nothing regarding buying a new vehicle. Remember, you're not opening a new account. It's just one more thing the dealership may try to pull to keep you off balance during the negotiation.

Car dealer scam #2 - The credit score lie.
One trick tried on occasion is the credit score lie scam. They tell you your credit score is lower than it actually is. This way they can get you into more profitable financial products. Don't let them try this scam. If you got a copy of your credit report before you went to the dealer, you'll be well aware of your credit score and all the other factors associated with your credit. You can (and should) get a copy of your credit report and FICO score before you go anywhere near a car dealership. Information is power and you need to have as much as power as possible. You are entitled to a free credit report from each of the major credit reporting agencies; TransUnion, Equifax, and Experian.

Car dealer scam #3 - Trade payoff scam
This is especially popular during ads for big sales. You hear it all the time "We'll pay off your trade no matter how much you owe." You don't actually think they are going to pay off your trade out of the goodness of their heart, do you? Actually it's another great opportunity for the dealership to trick you into financing more through them. They pay off the balance due on your trade, but to do so, they roll it into your new loan, so you're getting a loan for your new car and the outstanding balance on your existing car.

Combined with scam number 2 above, they can get you to finance a pretty hefty amount at fairly high interest rates. The other upside of this scam for the dealer is that they get your trade, and you may have little or no idea what they actually gave you for it. They do the old shuffle and "Wham!" it's all over. If you are a payment buyer, like so many people are these days, it's much easier for the dealer to pull this scam. All they have to do is get the payment where you want it and you're good to go. It's easier to be this kind of buyer, since you don't have to do any troubling calculations, but watch out, you'll get taken.

Really watch out if they try this scam with a lease. A lease is a contract with very strict terms. The overwhelming chances are that you can't get out of your lease without paying huge penalties; which you will. To make it worse, you'll probably finance the penalties and pay interest on them.