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New Traps of the Car Market: Why Vehicle Shortage Is More Dangerous Than It Seems

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Indy Auto Man car dealership, Indianapolis

Indy Auto Man car dealership, Indianapolis

Indy Auto Man Dealership, IN

Indy Auto Man, IN

Indy Auto Man experts reveal new tricks unfair car dealers use against the background of car shortage to extort money from customers.

Models with high trims and a list of additional equipment prevail in stocks now. But this doesn't mean that buyers can be forced to purchase an overpriced car that does not suit their expectations.”
— Victor Figlin, the GM for Indy Auto Man car dealership

INDIANAPOLIS, INDIANA, USA, August 16, 2022 / -- Supply chain disruptions continue to pressure vehicle inventory and sales in the US, pushing prices to record levels. The average value of transactions in June exceeded $45.8 thousand per car, which is almost 15% higher than a year earlier.

Despite rising interest rates and fears of a possible economic recession, consumer interest in new and used cars did not wane. And looking at the prospects for the coming years, there are several reasons not to postpone the purchase:

- drop in vehicle production set the shortage in the new and used car market;
- increased prices moved the main buyers' activity to the pre-owned vehicles;
- reduced market volumes together with inflation will lead to a further increase in prices: there will be fewer used cars on sale in a relatively new condition, while the cost for the new vehicles will keep growing.

Starting a search for a used vehicle by browsing a full inventory of cars for sale on the websites is a clever step to take in August before the majority of the buyers will do the same in fall.

But the excitement and shortage observed in car dealerships caused activity among unfair sellers.

The used car market professionals from Indy Auto Man listed typical violations of consumer rights their customers in Indianapolis faced before visiting their used car dealership:

Understated price in advertising. The real value appeared to grow nearly twice at the dealership.
Preliminary contract and prepayment. Before showing the car, dealers obliged customers to sign a contract with conditions for deducting the entire amount or part of it in case of refusal to purchase.

False information about the interest rate. Advertising on the Internet or in the booklets an interest rate significantly lower than in the contract.
Inconsistency between advertised and available options, as well as cars being of the lower trim level.

Dealers impose goods and services when buying a car without prior disclosure.

The experts emphasize that the buyer should be alerted if a seller offers only car financing or insists on signing an agreement and making an advance payment before inspecting the car. Another alarm bell is the absence of a complete set of documents for new cars - vehicle title (if it's not a digital one), warranty card, or service book.

It is vital to check whether the car dealership has a proven track record. This information can be found on different rating websites and Google reviews. The next step is checking the dealer's website: the name of the seller, its location (address), working hours, contact numbers, and email address are mandatory.

“Experienced dealers are more resistant to crises, fluctuations in demand, and changing market conditions. The managers of such dealerships can diagnose the lack of liquidity and compensate for it at an early stage with proactive measures, without taking profitability to sky-high values. Indy Auto Man has been in the used car market since 2008. All this time, we have dealt with the most popular brands, models, and makes, and managed to build a strong community to bring special benefits to our customers,” Victor Figlin, the GM at Indy Auto Man, said.

All information about the price, trim, additional options, or age and mileage in case of a used car should be available in a couple of clicks.

Reliable used car dealerships also provide history reports. For example, at Indy Auto Man, it is possible to order a free CARFAX report for any vehicle from the inventory.

Before picking up the car, it is indispensable to verify if it has any defects – scratches, dents, etc. Reconcile the engine, chassis, body number, and VIN with the contractual terms; check the fluid level. Signing of the paperwork and transfer of the car ownership should take place only after a thorough inspection. In the case of a used car, a test drive is a must.

Careful study of the contract before signing is another step many car buyers neglect. Meanwhile, reading everything written in small print is a guarantee of not being deceived. If some points of the document do not suit or do not correspond to what the manager says, it is a reason to double-check everything. If everything is ok, the customer should sign the contract at once.

"In general, everything is simple - to avoid misleading, you should carefully read reviews, pay attention to the dealer's communication, and willingness to answer your questions. Any self-respecting dealer cares about reputation and strives for a high level of service. Check recommended prices from automakers, compare special offers from several dealers, study market-based prices, and choose the best deal," the expert concludes.

Victor Figlin
Indy Auto Man
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