How the scam works:
You decide to buy a new car although you still have payments left on your old one. Normally, in this situation the dealer will offer a buy-out amount and pay the existing loan off for you – transferring that amount towards the new car.
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Unfortunately, there are times when the bank will call you a few months later because the dealership never paid the old loan. This is a horrible scam, since the loan at the bank is in your name, not in the dealer’s.
Watch the video below to see more scams pulled by dealers and things to check when buying a car:
Buying A Car From A Dealership Scams Video
How to avoid:
These scams happen because the victims focus on what car they are getting for the trade-in (along with all the new features) and they never request an additional contract, in which the dealer signs to pay off the loan in a certain amount of time.
Get a signed contract – you may still have to take him to court but at least you will have proof.

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