Picture this: You walk into a car dealership, excited to buy the car of your dreams. You browse the models, talk to the salespeople, and negotiate a fair price. But as you sign the paperwork and drive off the lot, you realize you've been scammed.
Car dealership scams can cost you a ton and leave you with a car that doesn't meet your needs. That's why it's essential to protect yourself when buying a car.
This article will provide seven tips to avoid car dealership scams and make a smart buying decision.
From researching to knowing your financing options, we'll cover everything you need to know to protect yourself and your wallet.
Here we go!
When you're in the market for a new car, ensure you don't pay more than you should. This is why researching the car you want and its market value is crucial before shopping.
By researching, you can get an idea of what a fair price is and is and prevent you from overpaying.
You can research a car using online resources like PigiaMe, Jiji Kenya, and Autocheck.
These websites will provide information about the car's features, specifications, and pricing. You can also get quotes from multiple dealerships to compare prices and negotiate a better deal.
Read Also: How to Save Money and Get the Best Deal When Buying a Car.
When buying a car, it's important to know your financing options to protect yourself from potential scams. Car dealerships may push you to finance through them, but it's important to remember that you have other options.
Compare various lenders' interest rates and loan terms to better understand what you can afford and avoid high-interest loans.
Another helpful tip is to get pre-approved for a loan. With a pre-approved loan, you'll have a budget in mind when you enter the dealership, preventing the salesperson from talking you into a higher-priced car or loan.
Read Also: The Process of Car Financing in Kenya.
Dealerships may try to sell you add-ons and extras that you don't need, such as extended warranties, rustproofing, or fabric protection. These add-ons are often overpriced and unnecessary, and they can significantly increase the cost of your car.
To avoid being upsold, know what you want and set a budget. If the dealership offers an add-on, politely decline and stick to your original plan. Feel free to walk away if the dealership is unwilling to work with you on the terms you want.
Read Also: Money & Me: Buying My First Car.
Trade-in scams are another common tactic used by dealerships. They may offer you a low trade-in value for your car and then charge you more for the new car to make up for it.
For example, you're interested in buying a used car listed for Ksh1 million at a dealership.
You have a car to trade in that you believe is worth around Ksh500,000. When you bring it up to the salesperson, they tell you they'll give you Ksh300,000 for your car as a trade-in.
You might think that you're getting a good deal since you're effectively getting Ksh700,000 off the price of the new car.
However, the dealership might not tell you that they've marked up the price of the new car to make up for the low trade-in value. The new car might only be worth Ksh700,000, but the dealership sells it for Ksh1 million.
To avoid this scam, it's essential to know the true value of your trade-in car and negotiate separately for the trade-in and the purchase price of the new one.
Read Also: My First Car: Bitter Lessons from Skipping Due Diligence.
Dealerships may sneak in hidden fees or charges that can significantly increase the cost of your car.
As such, take the time to read the contract thoroughly and ask questions if something needs to be clarified.
Look for dealer fees, document fees, or add-ons you disagreed with. Don't sign something if you're uncomfortable with something in the contract.
For example, let's say you're purchasing a car, and they present you with a contract that includes a "delivery fee" of Ksh50,000.
You should have discussed this fee during negotiations and need to figure out what it's for. Before signing the contract, ask the dealership to explain the fee and its necessity.
Only sign the contract if you're satisfied with their explanation or feel comfortable paying the fee.
Read Also: The 7 Hidden Costs of Car Ownership in Kenya.
False advertising is a type of car dealership scam where a dealership may use misleading or false information to lure you into their dealership. They may use advertisements falsely claiming the car's features, performance, or pricing to interest you.
For example, a dealership may advertise very low prices, but when you arrive, you are told that the car has already been sold or that the price was a mistake. They may then try to sell you a more expensive car.
To protect yourself from false advertising, use reputable online resources to get accurate information about the car you're interested in, including its features, specifications, and pricing.
Finally, taking your time and not rushing into a purchase is essential. Dealerships may try to pressure you into making a quick decision, but this can lead to costly mistakes.
For instance, some dealerships may only let you test drive a car once you sign a contract, which is not a good practice.
Moreover, some may create a false sense of urgency by saying that the car you're interested in is in high demand and may only be available temporarily.
This tactic pressures you to make a quick decision without giving you enough time to research and compare prices. To avoid falling for these scams and fraud, take your time to research, compare prices, and test drive a different car
To sum up, when buying a car, it's important to be aware of the potential scams and frauds that car dealerships may use to take advantage of you. These scams can include false advertising, hidden fees, high-pressure sales tactics, and more.
To protect yourself, do your research, know your financing options, be aware of add-ons and extras, negotiate separately for trade-ins, read the fine print, and take your time. By following these tips, you can make an informed decision and avoid falling victim to car dealership scams.