Turns out I'm not alone in recognizing that most used car dealers (not all, but most) are really just shady payday lenders disguised as merchants.
But I've been too optimistic!
Below is a quoted comment from an auto industry expert in the midwest. And this ins't me talking or another consumer attorney. This is a car industry guy talking - someone who helps dealers!
BHPH = "buy here, pay here" -- the classic small independent car lot.
He warns that even the big chain used car places have the same practices!
For used car dealers, the car is just the bait for the important part -- selling you an outrageous loan and optional "extras" that give the dealer much more profit than the car ever could. (Because, think about it -- the only reason 99% of the customers step onto the lot at one of these places is that they have such poor credit that they have to buy the car that someone else felt good about getting rid of.)
With the horrible increase in economic inequality in the US, this isn't going to change anytime soon.
But at least understand what you're dealing with -- if you feel like you have to buy a used car from a dealer, do everything possible to GET YOUR OWN FINANCING first, before you get anywhere within 100 miles of a dealer. Know what you are approved for IN TOTAL as well as in weekly or monthly payments, and walk away the minute the dealer tries to sell you financing.
Dealers are pushing out financing terms to absurd lengths to make used cars "affordable," but that just puts you into a negative equity trap (you owe much more than the car is worth) at trade-in time ... if the car even lasts long enough for a trade to be possible.
Imposter Scams Top The Charts in 2018 - REMINDER: the IRS, Social Security or police/sheriff will NEVER call you demanding money!
I really, really hate fast operators who prey on the elderly. I have a close friend, an elderly woman, who shares all the scam mail she gets with me, so I have a window into a world that most working-age folks are totally unaware of.
Below is an example of a really nasty bit of business, an offer pitching what is supposedly a way to buy an extended warranty on your old car (it's not really a warranty but a service contract, but most people call it a warranty or extended warranty).
What it really is instead is a way for them to hook a suction line up to your bank account and drain it.
I know this for several reasons.
One is that my friend's car is a mid-1990s sedan. There is no way in hell that anyone honest will sell her a service contract to fix problems with a car of that age. It would never pencil out.
Two is that, while I was born at night, it wasn't last night. I have had countless elders come to me to complain about "warranties" that refused to pay when the coverage the elder thought they had purchased was invoked.
This whole offer, and especially the table on the back, is the work of sophisticated con artists who know that if they can get elders on the phone, the elders are often vulnerable to sales pitches that play on the fixed-income elder's fear of unexpected/unplanned expenses. The people who staff the phones for these come-ons are really, really good at being convincing and sounding utterly sincere and honest. They will talk your ear off about the high cost of auto repairs, and how their "product" would give the caller "peace of mind."
That's what this scam is about -- playing on the fear that folks on fixed incomes have of repair bills, just like the horrible "water supply line" warranties that were being sold around here a few years ago.
Believe me, that supposed "example" on the second page of the piece is PURE FICTION and is intended to give the reader the FALSE impression that they are selling something that would PAY for those repairs. (It is a lie, in in other words.)
If you EVER get an offer like this that tempts you to respond, DON'T DO IT.
Send it to me instead -- I'll gladly review it and discuss it with you at no charge if you let me use it as a consumer education example to help others.
And if you can ever show me a mass-mailing come-on that targets the elderly that actually proves to be actually be a good deal after I look into it, I'll not only tell you it seems legit, but I'll give that company a public pat on the back for offering elders a fair deal that benefits them, and not just the company trying to take their money.
Just sent the email below to Attorney General Rosenblum. I invite anyone who wants to second the motion to send her an email at firstname.lastname@example.org
I have had a number of very unhappy consumer victims of scams where they received very convincing calls from someone with an authoritative voice who told them that they were going to be arrested/audited/exposed as a liar/cheat/unfit parent/tax fraud unless they went to Apple (or Google or Wal-Mart) and bought gift cards and gave the codes from the cards to the person calling.
It's easy for you and I to sit back and say "That's an obvious scam" but it's not obvious sometimes, when you're tired and don't expect someone to call and threaten you. Once your amygdala fear response kicks in, your reasoning declines dramatically.
So just remember -- just like money never calls you on the phone, only scammers demand payment in gift card codes.
Never buy a gift card because someone threatened you! (Unless it's your wife.)
Scammers demand gift cards | Consumer Information
The short answer to "How do criminals steal from the elderly?" is "by phone, mostly."
And new phone-based payment services that let you send money to others without even leaving your house make it crucial that you remember this key survival rule:
MONEY NEVER CALLS YOU ON THE PHONE.
And if you think you've found the exception to this rule, call an attorney or a trusted friend with good sense to discuss the offer before you do ANYTHING that the caller suggests. If you have truly found the exception to the rule, it'll wait for you to conduct a thorough investigation.
If you feel ANY pressure to seize the opportunity at all, that's the clearest sign of all that it's a SCAM.
Remember, the phone and internet means just one thing for sure:
Every criminal in the entire world is just one click or phonecall away from you.
In years past, you pretty much only did business with people nearby; now you can be ripped off by someone from a country you can't even pronounce just as easily as by someone who calls you from a boiler-room scam operation in your own hometown.
How Criminal Steal $37 billion a year from the elderly
Remember -- you have EVERY RIGHT to take the paperwork home from a car dealer so you can get help reading and understanding it at your leisure before you sign!
A car salesman who says "I can't hold this car for you if you leave" is a liar trying to pressure you into signing on the dotted line without having help reviewing the contract.
FTC press release:
Not all dealers play by the rules. In a case announced today, the FTC alleges that Tate’s Auto Center of Winslow, Inc. — as well as related dealerships in Arizona and New Mexico and their owner and manager, Richard Berry --
* used deceptive advertising to get people in the door,
* failed to disclose required financing terms, and
* frequently falsified consumers’ income and down payment information in an effort to close the deal.
Instead of using the income information people gave, Tate’s often inflated numbers to make it look like people had higher monthly incomes.
US Ed Department wants to protect Trump U. Type Scam Schools instead of Ripped-Off Student Loan Borrowers
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