MIGHTY MONEY

4 tips for buying your first car as a junior troop

Purchasing your first car is a minefield filled with predatory lenders and scams. Young troops, unfortunately, fall victim to these bloodsuckers every year because they do not know of the special offers and protections available to them. It's exciting to be on the lot, test driving your potential steed, but knowing the pitfalls that lurk in those lots will save you and your wallet a lot of grief.

It's your first car and having your finances accounted for will make it easier when the additional expenses of maintenance, insurance, gas, and registration come into play. You wouldn't go into battle without ammunition and you should equally not venture onto a lot without knowing your credit score, pre-approval amount, and potential financial threats.

Here are 4 tips for identifying and preventing scams targeting you, a junior troop, as you shop for your first car.


1. The "refusing pre-approved checks" scam

You found it. It's the perfect car to take you from base to places where knife hands and regulation haircuts do not exist, but there is one problem: the dealer doesn't want to accept your pre-approved check from your lender (bank). They may try to spin something along the lines of, "I don't trust those, I've been scammed before." They're playing the victim; don't believe them. Their next move will be to convince you to sign a financing agreement with them instead, effectively scamming you into a higher APR loan.

Walk off that lot and never look back. You don't need that evil put on you, Ricky Bobby.

2. The "you have bad credit" scam

As a young troop, you probably don't have a credit history at all, which is a double-edged sword. The positive is that lenders will give you the benefit of the doubt. Why? Well, because of your service, you're easy to find and collect from if you become delinquent on payments. So, if a dealer says you have bad credit when you know, for a fact, that you don't, it's another scam waiting to happen.

We're willing to bet that the dealer will tell you your only option for approval is to finance through them at a ridiculously high rate. The solution here is the same as before — walk.

3. The "buy here, pay here" financing scam

In this scam, the dealer will promise that you're going to get a sweet APR if you finance through him, but the application process takes a few weeks. He's a nice guy, though, so he'll let you take the car home while everything finalizes. He's trusting you, but then, once those weeks pass, he calls you with bad news: the loan was denied, and you're forced to pay a much higher APR or lose that car.

The best defense against this scam is shop around for different lenders, get pre-approved, and don't accept any unknowns. Do not let dealers talk you into something you'll regret later. Not all "buy here, pay here" offers are scams, but why take the risk when the alternative is clear as day?

4. The "price is too good to be true" scam

There are advantages to buying directly from a person instead of a dealer, like a faster turnaround or a better deal. But keep your head on a swivel because you'll also leave yourself open to other risks and scam artists. As always, if in doubt, bring a friend. With some information and a properly calibrated BS meter, a troop can venture into the unknown unafraid.

The 'price is too good to be true' is when a victim sees a car they want to purchase online and it's priced well below market value. Usually, it's a classic or an exotic car -- something to entice the victim to overlook a few details. The scam artist states that they're out of the country with the vehicle (for one reason or another), but they'll ship the car to you -- but only after they receive your payment. The scam artist will make it seem like they're the one at risk.

Once the scammer receives your money, they will cease speaking to you and disappear. Surprise!

The lesson here? Always make purchases in person and be wary of wire transfers and money orders. And, as always, if it sounds too good to be true, it is.

If you feel like you have fallen victim or see a scam targeting your brothers-in-arms, you can report the car-buying scam at Fraud.org