If you are buying a car with bad credit then you need to be aware of some common scam tactics that some lenders will try to use to increase their profits. In this post we will outline a few of these tactics, with the hope that next time you are buying a car with very bad credit that you will be well prepared to fend off any such scam attacks.

The first tactic that you need to be aware of is the pressure-scare technique (at least that is what I call it). With this technique, the car dealer will play off your fear that since you have bad credit you will not be able to get a loan and as such will be forced to pay a higher interest rate and make a larger down payment. While both of these things usually are required to get a loan with bad credit, you need to make sure the rates and amounts are not above the current market rates. To avoid this problem, know exactly where you stand with your credit score, and know the current market rates for borrowers in your similar situation.

The second tactic involves a car that is traded in as part of a down payment on the new car. Make sure you have the dealer sign an agreement stating that they will pay off the loan on the trade in within 10 days. This is important because sometimes deals will scam you by saying they will pay off your loan as part of the trade in, but then they never do–leaving you holding the bag and responsible for making the payments on a car you no longer own. However, the simple 10 day agreement should take car of this problem, but also contact your bank which hold the current loan and let them know what is happening just in case.

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