Say you’ve got a dream car, and you’re in a position financially where you can stretch to afford it. So what if it would take 60% of your income to make the car payment? You’re an adult. You work hard. And you can decide how you spend your money. So when you’re filling out the paperwork for that dream car and the finance department at the dealership says you’ll have to add an extra zero to your income on the loan application, you think ‘no harm, no foul,’ right?
Wrong. Just because you’re willing to stretch to make your car payment doesn’t mean that the bank giving you a car loan is willing to take a chance on you. If you lie on your car loan application, don’t be surprised to wake up one morning and find your car has been repossessed and your credit is ruined.
Buyers who submit false information to lenders sometimes think they’ve gotten away with it, until the bank checks up on the application and cancels the loan. Then you’re in for a surprise when your car is gone, along with any money you’ve already paid for it.
Yes, this does happen. And yes, people do get caught. The Miami Herald has a story about a retired woman who is suing a dealership that helped her lie on her car loan application.
It’s getting harder and harder to qualify for a car loan, so the temptation to lie on an application might be stronger than ever. The credit squeeze means that in addition to making it harder to get a loan, banks are looking deeper into car buyers’ finances than ever before. You’re more likely to get caught falsifying a car loan application now.
Even if you plan on making the payments, lying on a car loan application is fraud, and you could face criminal charges if the lending company decides you deserve them. Keep that in mind if someone in your dealership suggests fudging some numbers when you’re looking for a car oan. Even if the lender you lied to decides you don’t deserve jail time, you’ll have a car repossession on your credit report. You’ll find it’s very hard to find a bank willing to finance someone with a history of lying on credit applications.