The Forced Warranty Scam
This is when the finance manager tells you that you are not eligible for the loan by the bank unless you pay an extra $2000 for a 2-3 year
extended warranty.
This scam just doesn’t make any sense, but they're counting on you not thinking
clearly. Basically the finance manager is telling you that the bank won’t trust you to pay the $22,000 loan for the car, but they
will trust you if you pay even more money! That’s just stupid but they're not counting on you thinking this thing
through.
You can avoid this scam if you tell them to put it in writing that you “have” to pay the extended warranty in order to get the loan...you'll
find that requesting this will put a quick end to their scam.
If it doesn't, simply tell them why you need it in writing: So you can
take a copy of the contract to your local State’s Attorney’s office to verify that the deal is
valid. You can bet the finance manager will change his tune in a heartbeat. Your 'forced extended warranty' will be
dropped.
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