When you're looking to buy a used car, it can seem like a real jungle out there.
Consumer advocates say some shady practices can suck in anyone, but service members may be juicier targets because of their steady income and the fact that their pay can be garnisheed to satisfy debts.
In some areas, dealers set up shop near military bases specifically to zero in on troops.
What to watch out for
• Dealers falsely reporting to finance companies that a car has a moon roof or all sorts of other features in order to get a loan approved for a car that isn't worth the asking price.
"Normally, it wouldn't be approved by the finance company," said John Van Alst, staff attorney for the National Consumer Law Center.
But the customer never knows that. Then shortly after, the car develops major problems. When the owner can't sell it for what he bought it for, he must default on the loan.
• Dealers getting kickbacks from finance companies for jacking up interest rates. "There's no way for a consumer to know, even if they're allowed to read through the documents," Van Alst said.
• Dealers jacking up the price — especially after you've been at their lot for hours and are ready to sign on the dotted line. They add on products or change the terms, and customers are pressured to take the deal.
• Dealers wrapping an extra, burdensome loan into the deal.
Sometimes a service member doesn't have $1,000 or $2,000 for a down payment, and he's probably not going to be able to afford a car.
"The dealer says, ‘Don't worry. I'll just write in the contract that you're making a $2,000 down payment. You'll pay me back separately,'" said Sharon Glassey, a San Diego attorney.
The bank thinks the customer can afford the loan, and the customer is left to make two hefty payments.
• Undisclosed accident damage. Customers buy cars with a 90-day warranty, and shortly after the warranty expires, the car starts having problems. The customer finds out the car has been "Band-Aided together," Glassey said. Now the customer is stuck with a car that doesn't work and can't be sold — and an expensive loan.
What you can do about it
• First, get your own financing. You can get much better deals from military-affiliated banks and credit unions.
• Not all dealers are bad apples; check them out with the http://www.bbb.org">Better Business Bureau. Be careful about buying from small "mom-and-pop" lots, Glassey said. "If there is a problem, they may not have the money to resolve it, and they'll close their doors," she said.
Be wary of dealers advertising "buy here, pay here." In other words, they push financing of the car through the dealer. Van Alst said he has seen some abuses from franchised dealerships, too.
"Honest dealers prefer to compete based on the price of the car, but when the dealer down the street makes money based on financing, it's difficult," he said.
• Research cars that interest you, checking sites such as http://www.kbb.org">Kelley Blue Book for reasonable pricing.
• Check the vehicle's history at the National Motor Vehicle Title Information Service website, www.nmvtis.gov, which includes, among other things, information about accidents, title data and brand history.
Check http://www.carfax.com">Carfax.com to get a history of the car you're looking at. But know Carfax's limitations — sometimes the data is delayed, Van Alst said. "It could be a safety hazard if it's been in a serious accident," he said.
One report costs $34.99 and includes a range of information such as whether the car has been in major accidents, service history and last reported mileage.
• Before buying, take the car to a mechanic and a body shop, Van Alst said. The body shop can spot signs that the car has been in an accident and other problems.
If you think you've been the victim of fraud, contact your military legal assistance office or state attorney general's office. A database of auto fraud attorneys is http://www.naca.net">available at the National Association of Consumer Advocates' website.
More information is available at the websites of the http://www.nclc.org/">National Consumer Law Center, the http://www.consumerfed.org/">Consumer Federation of America and at http://www.consumersunion.org/">ConsumersUnion.org.