1. “The Coverup”
Paper plates, blurry thumbs, rags, smiley faces... Some sellers, particularly on craigslist®, use all sorts of things to obscure the license plate on a car posted for sale. But why? Why cover up the license plate when you’re selling a car?
It’s to prevent you from running a Carfax®. You’re likely looking at a car with title issues: salvage, flooding, fire, lemon etc. Is it really cheap? Now you know why. The seller is hoping you won’t ask for a VIN. Get ready for a good story if you do!
2. “The bait and switch”
Eager to go see a car for sale by a dealer at a great price? Be sure you’re not looking at a “bait and switch.” The great deal you see advertised could just be a ruse to get you to the dealership. Once you’re there the salesman lets you know, “I’m sorry, that car just sold.” Then the switch, “We have a similar car I can show you.” Of course this one is a few thousand over the price of the car you came to see. You traveled a long way and maybe you’ll buckle and go for this trick.
Read reviews carefully. Check independent review sites like Yelp® and Google®.
See how long the car has been posted for sale if you can. If it’s $3,000 below market value and it’s still for sale after 90 days, chances are it’s a fake.
3. “The prep fee”
Thought you were getting a good deal? Not anymore. If you want to buy the car, you’ll also need to pay the prep fee. What, you thought prep was included!?
One variation on the prep fee is the not-really-a-cash-price cash price. Many dealers count on pushing you into an overpriced financing deal in order to make a few thousand in profit on a car that has a reasonable cash price. But if you want to pay cash, the dealer levies an additional internet fee or similar. Dealers are able to "pack" your finance contract so that you’re paying them as much as $3,000 in additional interest. Beware of high APR loans and other fees. If you can’t buy the car for the amount it’s advertised at well then it wasn’t really a cash price in the first place.