According to figures from the National Automobile Dealers Association, the issue has lately gotten worse since the typical vehicle's gross price represents a decreasing percentage of its selling price each year. The advice session is unpaid. Contact Allen Stewart if you suspect you are a victim of a payments processing scam.

[11th October 2022 Dallas]: When car dealerships overstate the monthly payments due by a potential customer, this practice is known as "payment packing" or "car-buying contract."  

Payment packaging may be anything from dubious to outright unlawful. The process begins innocently enough: the car salesman provides the buyer with a pricing proposal that includes extra items. These goods may include undercoating, VIN etching, credit life insurance, gap insurance, and more. When pre-loaded onto a car, some accessories give the buyer genuine value, while other accessories may prevent the consumer from declining them.

Other potentially misleading practices include erroneously raising your interest rate, unfairly inflating the cost of a new automobile, or secretly lowering your down payment. Further payment packaging acts cross the line into illegality after the dealer examines your credit report and publishes the selling price, term loan, and financing rate.

Before presenting any extra back-end items, the dealership's finance manager is legally required to reveal the vehicle's base payment; otherwise, they are unlawfully packaging the payment. The finance manager should reduce the monthly payment to the original, accurate amount if you reject these back-end items. More dishonest dealers, however, can decide to make up the difference by increasing the price of the automobile or lowering the value of your trade-in.

Long-term, payment packaging costs customers a lot of money. Throughout a 60-month loan, an additional $50 in monthly payments may cost a borrower $3,000. Although some goods, such as GAP insurance or an extended warranty, might be very helpful to the consumer, they are not necessary purchases, and customers must be given the option to acquire them or not.  

You may speak with Allen Stewart's attorneys to learn how to avoid similar vehicle fraud scams. Do you have further concerns about the car-buying contract? Consider visiting https://www.allenstewart.com/practice-areas/auto-fraud-attorneys/what-is-payment-packing-fraud/

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