How the scam works:
You find yourself at a dealership. Your future car is picked out and it's just a matter of financing. The dealer is working on the papaerwork. They are friendly, ask you what you do for a living, and make small talk about your family.
Off-handedly a warranty is mentioned that is not included in the price, so no problem there. What this really means is the $3,000 warranty is included in the invoice's total, even though it's not part of the car's value. They may even tell you the warranty is required to get the loan. This is not the case. If you don't want the warranty, it is your right to decline it.
How to avoid:
Ask the dealer to show you where it says on the contract that the warranty is required to be approved for the loan. If they can't, feel free to walk out.
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