Beware of Car Loan Scams When Buying a New Car
Buying a new car is a big commitment. Although it’s really exciting to be taking ownership of a new vehicle, it’s also perfectly understandable if you’re worried about the process – including car dealer financing tricks and car loan scams.
You’ve probably heard lots about different car loan scams and tricks and it can seem overwhelming to figure out what and who you should trust.
Don’t panic. There are several simple things you can do to spot car loan scams and car dealer financing tricks and protect yourself when buying a new car.
For car loan advice you can trust, talk to our expert car loan brokers.
Common car loan scams
Cheap car offers
You’ll likely come across cars being offered at prices that are far below what you’d expect to pay. This is likely to be a scam. You may go ahead and contact the seller only to be told that you need to pay upfront fees or that you can’t see the vehicle in advance due to it being overseas. Don't be tempted by an offer like this. If it sounds too good to be true, it probably is.
There are a number of SMS scams targeted at people wanting to buy a new car. The best way to approach these is to call the SMS number directly and if you can’t get through, do not email them but assume that it is a scam. Any reputable company will offer you direct contact with something as serious and financially costly as a car loan or purchase.
Loan modification scams
You’ll need to keep your wits about you if you commit to a car loan but struggle to pay it back. There will be numerous companies offering to help you refinance your car loan or offering you ‘help’ to pay it back – always be wary of this as you don’t want to get into further financial difficulty.
Warning signs to look out for
You should always be wary of dealers offering guaranteed approval. Often you may be credit checked and approved for a loan yet you’ll be given terms that are very expensive in the long term.
Being asked to pay upfront fees should always raise alarm bells. A reputable lender will not ask you to pay a fee before your application is processed or in advance of funds being distributed. Often companies take your payment and then disappear – so make sure you don’t pay upfront.
Internet-only loan companies
Although many of these companies can offer great deals on a new car loan, just treat any online companies with a certain amount of caution. Always make sure that they have a set address and a phone number that you can contact easily if you need.
Tips to make sure your car loan company is right for you
It’s really worth trusting your own judgement and using your common sense when it comes to figuring out whether you’re using the right car loan company.
Never feel pressured or rushed into committing to a car loan when you’re buying a new car. The right car loan company will take their time explaining and clarifying anything that you need, and they won’t push you for instant payment.
Speak to Positive Lending Solutions to get peace of mind when buying a new car. We have decades of experience and our teams of expert brokers will instantly be able to identify scams or anything that doesn’t seem right in your hunt for the perfect car loan.
Talk to a finance expert for advice on finding the right car loan for you.