You walk into a dealership expecting honesty. After all, buying a car is supposed to be exciting—not stressful. But too often, behind the smiles and sales pitches, some dealers use shady tactics to squeeze more money out of unsuspecting buyers.
Whether you’re shopping for a new ride or signing the paperwork on a used one, it pays to know the warning signs. So, what are the most common car dealer scams—and how can you protect yourself?
1. The “Yo-Yo Financing” Scam
This scam targets buyers who finance through the dealership. The dealer tells you you’re “approved,” lets you drive off the lot, and then calls you days later claiming your financing “fell through.”
Now they want you to sign a new contract with a higher interest rate or worse terms. Yo-yo financing pulls you back in after you think the deal is done—often after you’ve already bonded with the car.
How to protect yourself: Never take the car home until your financing is 100% finalized with a confirmed lender. Get your loan terms in writing before driving away.
2. Hidden Fees and “Extras” You Didn’t Agree To
Some dealers quietly slip unnecessary charges into the paperwork—like “processing,” “reconditioning,” or “protection package” fees you never asked for. Others might add expensive extras like gap insurance, extended warranties, or window etching without your consent.
California law caps documentation fees at $85 for dealers with DMV agreements and $70 for others (as of 2025). Anything beyond that—or fees that weren’t disclosed upfront—may violate state law.
How to protect yourself: Read every line before you sign. Ask for an itemized breakdown of all fees. If they can’t clearly explain each one, walk away.
3. Odometer Rollbacks and Title Washing
Rolling back an odometer or hiding a branded title (like salvage, flood, or rebuilt) makes damaged cars look newer and more valuable than they really are. Modern odometer fraud involves digital tampering that’s harder to detect than old mechanical rollbacks.
How to protect yourself: Check the vehicle’s VIN through Carfax or AutoCheck. Compare mileage readings on the title, dashboard, and maintenance records. Any discrepancies? Don’t buy the car.
4. Bait-and-Switch Advertising
Ever see an online ad for a car at an amazing price—only to arrive at the dealership and be told “it just sold”? That’s the bait-and-switch. Dealers lure you in with fake listings or unrealistic prices, then push you toward a more expensive vehicle.
How to protect yourself: Screenshot the ad before visiting. If the dealer refuses to honor it or makes excuses, leave. Legitimate dealerships don’t need to play games.
5. “Spot Delivery” Traps
In a spot delivery deal, the dealer lets you take the car home right away—even before your loan is officially approved. Days later, they call saying financing fell through and demand a higher payment or bigger down payment.
This tactic plays on your excitement and the fact that you’ve already shown the car to friends and family. When done intentionally to mislead you about financing terms, it’s illegal.
How to protect yourself: Avoid taking immediate delivery unless the financing is fully approved in writing and signed by the lender.
6. Misrepresenting a Car’s Condition or History
Some dealers lie about accidents, repairs, or prior use—especially with trade-ins or leased vehicles. They might say a car was “dealer maintained” or “never in an accident,” when records tell a different story.
Dealers who fail to disclose material facts about a used vehicle can face serious legal consequences, even on cars sold without warranties.
How to protect yourself: Get the car’s full history report and have it inspected by a trusted mechanic. If the dealer resists or makes excuses, they’re probably hiding something.
7. “As-Is” Doesn’t Mean “No Rights”
Many buyers assume that if a car is sold “as-is,” they have no legal protection. That’s not true. A dealer can’t lie about the car’s condition just because it’s sold without a warranty. Misrepresentation and fraud are illegal under state and federal law—”as-is” or not.
How to protect yourself: Keep your paperwork, ads, and written promises. If the car you bought wasn’t what the dealer represented, you may still have legal options.
If You’ve Been Scammed, You Have Rights
If something about your car purchase doesn’t feel right, you don’t have to deal with it alone. Whether it’s a hidden fee, false promise, or misleading history report, California consumer protection laws are on your side.
Consumer Action Law Group is experienced in automotive fraud and dealership misconduct, and we offer free consultations to review your case.
Call (818) 254-8413 today for a free case review.
