CP Week Tip of the Day: Five car sales scams to avoid

Buying a car can be exciting and somewhat intimidating, considering it’s the most significant purchase you’ll make other than a home. But it shouldn’t be a bad experience. The Attorney General’s Office received 1,184 complaints about auto sales in 2007. Despite dropping from No. 4 to No. 5 among the category ranks, that’s still more complaints than the previous year.

Here are five scams to watch out for:

• Bushing or yo-yo sales: A Washington law allows car dealers four working days to find financing and finalize a sale after you’ve signed a contingent contract. If the financing falls through, the dealer must call off the deal, return your down payment and your trade-in and start negotiations from scratch. A dealer can’t change the terms and force you to sign a new contract that requires more money, higher interest rates or a co-signer. Listen to Attorney General Rob McKenna discuss this scam.
• Curbstoners. If you respond to a classified ad and the seller has several cars for sale but does not have a car lot or showroom, you may be dealing with a “curbstoner,” or unlicensed dealer. Buying from a curbstoner increases your chance of a buying a junk car and the risk of complications transferring the title.
• High-pressure sales tactics. You may be asked for a cash deposit or to sign a document indicating that you agree to buy a car after negotiations are finalized. You are under no obligation to buy until the final sales contract is signed. Be willing to walk away if a seller rejects what you consider is a reasonable offer.
• Bait and switch: A very attractive deal on a car is advertised (the "bait"), but at the dealership the salesperson tries to sell a more expensive car (the "switch"). Dealers: click here for information to help you comply with Washington's advertising laws.
• Payment packing or loading: Customers are persuaded to buy additional products, such as credit insurance, service contracts, chemical protectants, and security devices, but the salesperson doesn't reveal the true impact on their monthly payments.

Read today's related blog to get a fair deal on a car.

Monday's Tip: Choosing a wireless phone plan
Tuesday's Tip: Debt collectors -- legit and bogus -- and your rights
Wednesday's Tip: Shopping online
Tomorrow's Tip: Hiring a contractor