People who are having difficulty paying their car loans often turn to companies that promise that they can get their payments lowered.  While some refinancing companies are legitimate, many unfortunately are scammers who make big promises and take your money, but provide no services in return.

These scammers lure people by representing that they have strong relationships with the lenders when the truth is that they have no relationships with the lenders.  Their ads often feature testimonials from “satisfied’ customers, but these testimonials are bogus.  They appear to offer a money back guarantee, but the guarantee is worthless.  Once someone is lured into doing business with one of these scam auto loan refinancers, the soon-to-be scam victim is told that they have to pay a few hundred dollars as an “enrollment fee.”  Often the scammers tell you that you should stop making your car payments while the company negotiates on your behalf or, even worse, some of the scammers tell you to make your payment to the scammer who promises to pay your lender on your behalf.

The truth is that these scammers aren’t negotiating with anyone.  They money you pay as an enrollment fee gets you nothing, but a reduced bank account and  the money you pay to the scammer that the scammer represents will be paid on your behalf to the lender is pocketed by the scammer.


It can be difficult to initially determine if a company offering auto loan relief is a scammer, however an easy way to tell if it is a scam is through the requirement of an advance fee before services have been rendered.  Regardless of whether this advance fee is called an “enrollment fee” or something else, it is a violation of federal law for any company to charge you any kind of advance fee for an auto loan renegotiation before providing any results.

When considering whether to use a particular company for debt relief services, you should do a search engine search and see if there have been complaints or allegations of fraud against them.  You also can check with the Federal Trade Commission or your state’s Attorney General to find out if any legal action has been taken against them.

Finally, if you do have trouble making your car payments, the best thing you can do is to contact your lender directly to see what options they may provide.  Some will add payments to the end of the loan or extend the term of the loan.  Unfortunately, despite what scammers will tell you, lenders rarely reduce the interest rate on their loans.

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