Everybody wants to pay the minimum on their car loan. For this reason, car refinancing is attractive since it can lower your overall or monthly loan payment – or maybe even both. Unfortunately, as in any industry, there are those who try to game the system and take your money. Learn how to spot these scammers.

Want to pay less on your car or truck loan? Then get a free auto loan refinance quote from CARCHEX today.

Internet Risks

These days, anyone can put up a professional looking website. So before you call or share any data, look closely at the site. You should look for a Better Business Bureau seal of accreditation. But don’t trust the seal itself, see if it’s clickable. Some scam artists put the BBB symbol on their site, even if they’re not accredited.

If there is no clickable link, go to the BBB website and search for the company’s name. If they are accredited they should show up. If not, beware that you might be at a scammer site.

Read The Fine Print

Before you agree to or sign anything, make sure you read all the paperwork carefully. This might be tedious, but sometimes scams are incredibly easy to spot if you just read carefully. For example, the fraudster might tell you one rate by phone, then have a completely different rate written in the contract.

If you don’t feel comfortable, then ask a family member or friend to help you read the new loan terms and conditions.

Watch Out For Up Front Payment Demands

Every form of auto refinancing has certain conditions and fees. However, some dishonest lenders will ask you to pay an upfront fee before any paperwork is even signed. They will promise you money back guarantees, but don’t get fooled. Sometimes they’ll try to trick you by saying that if you don’t pay the fee, you’ll lose the chance at a very low interest rate. Another common fraud tactic is saying that you have to pay an upfront appraisal fee.

If you feel that the seller is applying any kind of pressure tactic, then walk away and look elsewhere.

Unfair Packaging

Another method used to take your money is to package other services in with your refinanced auto loan. You might be offered things like rustproofing, gap insurance, tire rotation, or other extended service plans that have nothing to do with your car loan.

These services might be useful, but they should be negotiated separately. Again, if the seller pressures you, it might mean that they’re trying to steal your money.

Conclusion

If done correctly, car loan refinancing can be a great way to lower monthly car payments. But like any other financial decision, it pays to be careful and read the fine print.

Want to organize your car refinance with a BBB A+ accredited company? Get a free auto loan refinance quote from CARCHEX today.

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Published in CARCHEX Auto Finance Resources by CARCHEX on March 27, 2015