According to Edmunds.com, one of the top websites for car shopping, “54% of car shoppers say they want more clarity on the exact price of a car rather than haggling with dealers.” — Detroit News, June 8, 2013
According to Automotive News, auto “Dealers have moved to the front lines of opposition against legislation that would make it easier to workers to join unions. The practice is commonly called card-check.”
“Dealers…are claiming some success in slowing momentum of the bill, which is a top priority of organized labor and key Democratic leaders.” — Automotive News, March 23, 2009
That was in 2009. Since then, dealers and their business allies have succeeded in blocking enactment of the legislation.
Dealers like to be able to fire employees at will, sometimes pressuring them to cheat customers, under threat of losing their jobs.
Auto dealers are overwhelmingly conservative. Their political giving, predictably, follows the same pattern. Auto dealers donated tens of millions of dollars to right-wing politicians like former President George Bush, Presidential Candidate John McCain, and Presidential candidate Mitt Romney..
Auto dealers like to pose as “Main Street” “mom and pop” businesses, in order to get concessions from legislators and regulators. But according to Automotive News, “The $1 billion club for 2012 includes 34 [dealership] groups, including 13 with more than $2 billion.”
Increasingly, auto dealerships are consolidating and thousands are publicly traded on Wall Street. Microsoft’s Bill Gates is one of the largest investors in the nation’s largest auto dealership chain, AutoNation, which reportedly grossed $15,668,8000,000 last year.*
*Automotive News, “Top 125 dealership groups in the U.S.” – March, 2013.
In response to dozens of complaints from consumers who were stuck struggling to make payments on vehicles they had traded in, plus the cars they bought, Washington State’s Attorney General ordered dealerships owned by Mark Gilbert to pay off the liens on the traded-in vehicles.
Washington state law requires auto dealers to pay off the remaining balance consumers owe on traded-in vehicles within two days after they make a new purchase. Typically, the amount owed on the trade-in — known as “negative equity” — is added onto the price of the newly purchased car.
According to the Attorney General’s office, “The Walla Walla County Superior Court..entered a preliminary injunction, ordering several Northwest auto dealerships owned by Mark Gilbert to comply with Washington dealer and consumer protection laws, requiring prompt payoff of customers’ trade-in vehicles.”
The Attorney General’s legal case involved car dealerships Gilbert owned that sold new Honda, Jeep, Dodge, Chrysler, Nissan, and Ford vehicles.
How can you protect yourself from this scam? The safest thing to do is to wait to buy your next car until you have paid off the loan on the car you are currently driving. Otherwise, you risk having both cars repossessed if the dealer fails to pay off the loan on the car you trade in. Plus you sink deeper into debt. And — always insist on seeing the title to the car BEFORE you buy. If the dealer doesn’t have the title, the lender for the prior owner can repossess your newly purchased car — even if you are making all the payments in full and on time to your lender.