Beware of these six used car scams. In tough economic times, seniors can become targets for unscrupulous car dealers. Be careful and beware of these six car scams in Utah:

1. Payment packing. The car dealer avoids discussing the price of the car and commits the shopper to a specific monthly payment. The car is grossly overpriced and the contract is packed with extras such as insurance, extended warranty, service contract, dealer fees, undercoating, and delivery charges. The chatty dealer distracts the car buyer from carefully reading the contract. Our advice: Get your own financing, always negotiate the price of the car, and read the contract carefully. Question every charge.

2. Yo-yo dealing. Soon after the sale, the car dealer calls with an excuse to rewrite the contract. Believing such excuses as the financing fell through or “we can get you a better interest rate,” the car buyer signs a new contract which is never a better deal. Our advice: If the dealer wants you to resign the contract, call your lawyer. Almost all car dealers know what financing they can get before you buy their car. Also, keep copies of every paper you sign. Never give your copies back to the dealer.

3. The co-signer scam. A parent or grandparent is encouraged (sometimes paid) to cosign a car. Later, the co-signer discovers that he or she is the sole buyer of the overpriced car.
Our advice: Don’t co-sign for a car; if you do, read all contracts carefully. Ask the dealer for the co-signor notice required by federal law.

4. The quick repossession. The car dealer finances the car but doesn’t provide a payment book or schedule. Soon, the payment is a few days late and a repossessor shows up. The dealer gets the car back and keeps the trade-in, but the car buyer is obligated to pay the contract. Our advice: Arrange your own financing.

5. Overpriced insurance. The car dealer adds expensive theft insurance, GAP insurance or extended warranties.
Our advice: If you want insurance, buy it from your own agent, bank or credit union. You will save money.

6. The cancellation period or exchange guarantee scam. The dealer gets you to sign a contract with a promise that you can later undo the deal. Some dealers offer an exchange guarantee which allows you to return the car for another car of your choice. Beware of these. The car dealer will set its own price for the car of your choice.
Our advice: Never rely on a cancellation or exchange right unless it is in writing and lets you completely back out of the sale. In Utah, consumers have no three day cancellation right for car purchases. Always get copies of every document you sign.
Published April 1, 2009