Advertiser Disclosure has affiliate referral relationships with multiple web sites. This means that for many of the links you see on this site, we are paid referral fees for leads generated from visitors that click on links or fill out forms on this site. In some cases we are paid a commission for a purchase made on a site that is linked to from Please view our advertising policy page for more information.

Our Visitor's Savings: $13,387,994

Advertiser Disclosure

Never Leave With Your New Car and No Paperwork

By | Published February 13, 2012

Every once in a while I get emails from visitors to us here at asking me "did I just get ripped off?" Well you know if they have to ask me that question, the answer is probably going to be yes they got ripped off. Sometimes people do very foolish things when shopping for new cars. One of the worst case scenario examples of this is buying your new car and leaving the dealership with no paperwork or anything in writing that confirms the deal you just signed. Sounds like a no brainer, right? But it's amazing how many suckers fall into this common car dealer scam. The reason dealers pull this scam is so they can change the numbers on you, meanwhile you already drove off with the car and put miles on it, so no matter what they do to the paperwork, the car is yours and you're stuck. Today I got another such email from a frantic consumer on this topic and we'll talk about this scam and avoiding it below.

How the Paperless Car Dealer Scam Works

The dealer usually will make up some bogus excuse as to why they can't give you the paper work for your new car that you just bought from them, maybe their computer crashed, or waiting for some manager approval, or (insert any bogus excuse here). So they promise to mail you the paperwork later. Sometimes they tell you to come back tomorrow to pick up all the paperwork. The problem is by time you finally get your hands on the paperwork, you are shocked to find the terms have changed, the APR went up, or they gave you less for your trade-in then they promised. It's one of the oldest tricks in the scheming car salesperson's book and it is still used to this day.

A car buyer emailed me today that they went to a dealer 100 miles away with a pre-approved new car finance loan check from a lender with 14% APR. They agreed on a deal for a new car but the total out the door price was more than the check limit. That was their first mistake, trying to buy more car than they were approved to buy. The dealer lied and said no problem that they were a "gold dealer" for that lender, whatever that means, probably another lie. They said they could get the loan increased from the approval amount already shown on the buyer's car loan check. That was mistake number 2, believing the scams of a lie-nance manager. If a lender approves you for a certain amount based on your credit score, that's it folks set in stone, no one is going to get that bumped up for you. Any finance manager that makes a statement that they can get the lender to up the amount that they just approved for you is just lying through his teeth. The lie-nance manager said they made the call to the lender and everything was fine, they just had to do the paperwork so the buyer went home.

Three hours later the crooked car dealer calls the customer back and told him the lender said no. Well wait a minute, they said they called the lender and it was ok. Wow, are you as shocked as I am the lender said no? Guess what, the dealer never even called the lender, you can bet on that, it's all part of their scam. Two hours later they said they got him a deal through BMW credit for 6.5%. Sounds like a much better interest rate than the other auto loan which the buyer had, right? Not so fast. They raised the price on the car $5,000 and said something about an interest rate buy down. Keep in mind, this really does not exist on auto loans, only on mortgages. If there was a buy down, it's the dealer doing it and charging him $5,000 for processing the car loan for him, whichthe buyer had already done himself for free. Had the buyer simply found a car withing th eprice range of his pre-approved car loan check, he would have dodged this scam with excellence by accident. But instead, the buyer has no paperwork or odometer statement or anything at this point when he left the dealership with his new car.

The odometer papers and loan papers were not given to the buyer because the car dealer told him their "system crashed." Hey, we've never heard that one before have we? But this very thoughtful and kind car dealer promised to mail them the papers! The buyer received the papers in the mail and it looks like a standard loan with nothing on it that looks like prepaid interest etc.

How to Prevent this Scam from Happening to You

The bottom line is you don't need this kind of nonsense in your life. When you go to buy something in a store they have signs that offer to pay you money if the cashier forgets to give you your receipt. It's that important to get your receipts and paperwork. You never walk away from the electronics store without a receipt for a new TV, so why on earth would you walk out of a car dealership with a $30,000 car and no receipt?

Any time a dealer tries this trick on you, walk out. Tell them to call you when the paperwork is 100% ready for you to sign, and that includes all the finance and Truth in Lending required paperwork. Tell them to get all managers approval, and all computers back up and running before you complete the deal, and don't accept any excuses for them not giving you full documentation on everything you just bought and signed for. I don't care if you have to drive back home 100 miles empty handed with no new car, always make sure you get it all done in one transaction, so they cannot change numbers on you pull the rug out from under you. now if you read the rest of, you will be ready for any trick they throw you way. Be sure to read our Top 10 Car Dealer Scams page.

Author Jeff Ostroff

About The Author: Jeff Ostroff is a consumer advocate, Founding Editor and CEO of overseeing a team of expert authors. For over 17 years, he's been the recognized authority on car buying, leasing, used cars and financing. He developed sophisticated spreadsheet tools to help consumers negotiate on a level playing field. He is a widely sought out guru, cited by the press for his expertise in savvy car buying and preventing consumer scams. Jeff has been quoted in CNN, Bloomberg, MSNBC, Wall street Journal, Consumer Reports, NY Times, Reader's Digest, and many live call in radio shows. He has covered the automotive space since 1997. Jeff also has extensive experience and expertise in selling used cars for clients on eBay and Craigslist. Connect with Jeff via Email, Twitter or on Google+. has affiliate relationships with multiple web sites. We are paid referral fees for leads or sales generated from visitors that click on some links or fill out certain forms on this site. Please view our advertising policy page for more information.