How to Avoid Car Loan Scams

When the first car dealerships came into being, sleazy car merchants came on the scene almost as fast. Conjuring modern day images of men in checked suits, matching white belt and shoes, the sleazy car dealer has been the stuff of comics, radio, movies and TV. We all think we know how to spot them and, in many cases they tip themselves off the moment we step onto the car lot. But, what about the shady lender? Are we so savvy that we know right away when someone's about to stick us with a car loan that'll leave us broke and walking to work?

The disreputable lender and the dishonest car dealer tend to go hand in hand. But, spotting them can get tricky these days. These can be genuine con artists who will leave you with nothing in the end and they'll likely appear to be ordinary folk. Or, they can simply be people who want to move cars that don't sell too well off their lots leaving you with a gas hog or an irredeemable piece of junk. The key is to stay alert when you go shopping for a car and a car loan.

The vast majority of lenders are honest business people who want to earn a living and provide a reliable service. The last thing they want to do is put you in a car loan that'll leave you feeling screwed. But, there are folks who want to part you with your money while expending as little effort as possible in the process. The tip-offs to a bad car loan might be glaring, but most can be very subtle. After all, a sleazy lender can only be successful if the trap is carefully concealed.

The obvious car loan traps are telegraphed by outlandish claims and promises. With huge signs and emblazoned windshields that scream "NO MONEY DOWN!" and "ZERO PERCENT FINANCING", you have a clear warning that there's a scam in play and that big, shiny SUV that you think you're getting for a sweet deal, ends up costing you thousands more than you bargained for -- after 84 months have gone by.

The application form is where the car loan scam starts. The disreputable lender will convince you that the deal is for a limited time and urge you to rush through the application process. He may talk you into signing forms before they're all filled in and maybe even ask you to fudge a few numbers regarding your income to "expedite the process". In doing this, you become a party to the scam and when you find that you must forfeit the car and all payments made so far, you're stuck since the lender can prove you falsified a loan application -- an act that has legal repercussions.

Beware the lender who is going to extend to you a sweetheart car loan deal when he knows your credit score won't allow it. A lender who rushes you through the loan application process, urges you to give information you know is false, or a lender who asks you to sign an agreement before all the blanks have been filled in are clear indicators that this is a scam and you should walk out the door. You are the final decision maker and it's up to you to find the right car loan -- and the right lender!