Car spotting can cost you thousands of dollars

You buy a new car and you drive it home. Then days later, the dealer calls and wants it back. It's a disgusting practice called car spotting, and it could cost you thousands of dollars.

Executive producer Christa and her husband inadvertently discovered that their Honda Odyssey minivan had been spotted not once but twice when they brought it in for a routine warranty-covered repair.

Christa was told her Odyssey was out of contract because the dealer claimed the car went into service some four months before she actually bought it. How could that be possible? It all comes back to car spotting.

Here's how this one played out: The Odyssey had been sold to someone four months before Christa bought it. That person signed a contract for the van, took it home, and only then did the dealer work on the financing. As it turned out, the financing failed, so the dealer called them to bring the car back.

When you bring a car back, the dealer can and will hold you to the contract you've signed. If you've signed a bailment agreement, you'll be obligated for a per diem charge everyday you have the vehicle (plus other charges) if your financing fails.

In Christa's case, this happened twice to her vehicle. So the van went back on the lot as a supposedly new vehicle (that had already been sold twice) before Christa and her husband came along and were able to successfully finance it.

To prevent this from happening to you, Clark recommends that you separate the process of buying a car into three parts:

First, get pre-qualified for financing at a bank, credit union or online lender. Only use the dealer for financing if they will give you the lowest rate.

Second, shop around for the car before you get to the dealership. Clark prefers you do this online by getting a guaranteed price for a vehicle from CarsDirect.com,Zag.com or any similar service. Ideally, you only use a dealership to take delivery -- that's it.

Third, sell your old car first. Or if you're going to trade it in, make sure you cut the deal on the new car first, before making the trade-in.

If you keep these three steps separate, you'll greatly lessen your chances of being taken for a ride.