The Federal Trade Commission (FTC) reported a troubling increase in auto loan fraud complaints, with more than 60,000 cases filed in 2024—and that number is expected to rise in 2025. Whether car prices in New York are rising due to inflation, tariffs, or other economic factors, one thing remains constant: consumers must stay vigilant when making such a major purchase.
As a New York auto fraud attorney, I’ve seen firsthand how deceptive car dealership practices can leave consumers in serious financial distress. The surge in complaints stems largely from four areas of concern:
1. Inflated Vehicle Pricing and Add-Ons
Many consumers report being charged for optional car add-ons they never agreed to—such as extended warranties, service contracts, or GAP insurance products—that are quietly bundled into the loan. This deceptive tactic, often referred to as payment packing, artificially inflates the total cost of the vehicle.
In some cases, buyers are charged for products they neither requested nor received. If you see unauthorized charges on your auto loan documents, that may be grounds for a New York auto fraud lawsuit. Getting a dealership to cancel such a contract can be incredibly difficult without legal representation for auto fraud.
2. Yo-Yo Financing Schemes
Also known as spot delivery scams, yo-yo financing occurs when a dealership allows a consumer to drive off with a car before the financing is officially approved. Days or even weeks later, the dealer may claim the financing fell through and pressure the buyer into signing a new loan—usually with higher interest rates or a larger down payment.
This tactic is especially dangerous for consumers with poor or limited credit. Fortunately, a New York Senate bill is currently under consideration to ban or limit these yo-yo car sales practices and protect consumers statewide.
3. Identity Theft and Auto Loan Fraud
Auto loan identity theft is another growing concern. Criminals use stolen personal information to take out fraudulent car loans, leaving innocent victims with debt and damaged credit.
If you’re the victim of car loan fraud due to identity theft, take immediate action:
- Contact the three major credit bureaus (Equifax, Experian, and TransUnion) to place a fraud alert.
- Review your credit reports for unauthorized activity.
- Visit IdentityTheft.gov to report the theft and get a recovery plan.
An experienced New York consumer protection lawyer can also help you dispute the loan and repair your credit.
4. Falsified Loan Applications and Predatory Lending
Some car dealers falsify income, employment, down payment, or trade-in information on credit applications without the buyer’s knowledge. This type of dealer fraud can lead to unaffordable monthly payments and eventual repossession.
If your auto loan was based on incorrect information you didn’t provide, you may be the victim of predatory auto lending. A car fraud lawyer in New York can help you challenge the contract and pursue damages.
Know Your Rights—and When to Fight Back
These rising trends in car loan fraud and deceptive auto financing highlight the urgent need for stronger regulation and better consumer awareness. If you believe you’ve been the victim of auto dealership fraud in New York, don’t wait to get legal help.
As a New York auto fraud lawyer, I’m here to help you understand your rights and fight back against dishonest dealerships and lenders. Contact my office today for a free consultation with a car fraud attorney.
