A recent Wall Street Journal article delved into a subject that we at Cassels Garage hear about all too often – car dealers engaging in income fraud. Some car dealers simply do not put the customer’s best interests first, instead opting to approve them for car loans that they cannot realistically afford.
$809/mo Car Payment on a $660/mo Income?
The article uses the example of a woman named Mirna Lopez, who bought a pre-owned 2018 Pathfinder and found herself with a car payment of $809 a month. The problem was, she only earned about $660 per month. How did she get approved for a loan that she wasn’t even close to being able to make the monthly payments on? The sad truth is that the dealer gave inaccurate information about her earnings to get her approved for a car that would drown her in debt. This is called income fraud, and it happens more often than you might think. In fact, about 1 in 5 auto loans contain income fraud. “The consequence for a lot of people is to ruin them financially for five to 10 years,” lawyer Richard Feferman points out.
Make Sure to Read the Fine Print
Because of the prevalence of income fraud associated with taking out an auto loan, it’s more important than ever for car buyers to be vigilant. As we’ve stated in previous blogs, if you can avoid taking out a car loan altogether, that is almost always the best way to go. If you do decide to take out an auto loan, explore your options and be sure the loan you secure is one you can afford. It might even be wise to let a lawyer look over the contract before you sign it to make sure all the information is correct and above-board! When it comes to large investments like a vehicle, it’s better to be safe than sorry.
At Cassels Garage we believe it’s important to share helpful information with our customers, especially when it comes to all things automotive. Unlike car dealers who engage in income fraud, we pride ourselves on honesty and integrity. While we can’t single-handedly solve the issue of income fraud on auto loan applications, we can bring it to the attention of you, our valued customers and readers.
Look for Auto Businesses With Integrity
If you are looking for a well-established, reputable auto mechanic in the Melbourne, FL area, come see us at Cassels Garage. We give accurate quotes and stand by our high-quality work. We have been serving the people of Brevard County since 1966 and offer services including oil changes, transmission repairs, auto maintenance, and even car concierge services. Start the year off right by taking great care of your current vehicle. Or, if you’re in the market for a new car, do your homework to determine what you can afford so you don’t get stuck with a loan you cannot afford. Happy New Year from our family to yours!