One more reason NOT to buy a car from a car dealer

Even the auto dealers themselves have to admit:  many car buyers dread buying cars from auto dealers. Young people are especially wary.  And for good reason.

Car dealers keep selling unsafe, recalled used cars to consumers, putting them, their friends and family, and other motorists at risk of death or serious, debilitating injuries.

And as if that weren’t bad enough, they also insist that you surrender your Constitutional rights as part of the price of buying a car from them.

Good luck trying to buy a car from a dealer without a “gotcha” clause hidden in the contract that says you give up your Constitutional right to take them to court, and benefit from  our nation’s hard-won consumer protection laws. Like laws against rolling back odometers, selling “junk” cars that are advertised as being “in mint condition,” or engaging in other forms of cheating, lying, fraud, and thievery.

And get this:  the dealers got a special exemption from Congress — just for car dealers —  that allows them to keep THEIR Constitutional rights. So they can take anyone they want to court, and use the laws that benefit THEM. But they killed a bill that would have protected YOU from losing your rights when you sign on the dotted line to buy a car from them.

If you’re fed up with car dealers and their scams, check this out:

Cleveland Plain Dealer: Arbitration: What you don’t know about fine print can hurt you

And let your local car dealers know you’re not buying from them until they clean up their act, and you don’t have to surrender your rights to buy a car from them.

Avoid GAP insurance rip-offs

If you’re buying a car from a dealership, resist high-pressure tactics aimed at getting you to buy “GAP” insurance. What the finance manager doesn’t tell you is that auto dealers make a lot of profits from the sales of GAP, or “Guaranteed Asset Protection” policies.

Dealers hike up the price, and add it onto your loan, where it can cost you $1000 or more extra, over the life of the loan. Some charge double or triple what you would pay if you bought GAP separately from a reputable insurance company. Finance managers are usually paid an extra bonus based on how many GAP products they sell. So they have a personal financial incentive to pressure you.

The purpose of GAP is to cover you if your car is stolen or totaled before you pay off the loan. The “GAP” is between the amount of the loan and the worth of the car. If there’s a large difference, it’s a sign you’re paying too much for the car.

It’s better to get a less expensive car, or wait until you can pay more of a down-payment and get a shorter loan, or pay cash, instead of paying extra for GAP.

If you do decide you want GAP coverage, shop around and avoid buying it at the dealership. Why?

One major pitfall to buying GAP at dealerships: many dealers collect the GAP payment, but pocket it themselves, and fail to activate the policy. Some dealers have been arrested and prosecuted for this scam, but even then, their victims were not able to recover their losses.

As a result, consumers who paid for GAP, and believed they were protected, got a rude awakening when their car was stolen, or totaled. When they contacted the insurer that was supposed to pay their claim, they found out they weren’t covered. Suddenly they had no car, and still had to pay thousands extra for the difference between the amount of the loan and what they collected from their auto insurer.

Another problem with buying “GAP” from dealers — often, the policies they sell have loopholes that exclude coverage, in the fine print. So consumers end up paying extra for worthless GAP policies that leave them unprotected.

Bottom line: either don’t buy GAP, or get your own coverage directly from a reputable insurer. Many offer GAP polices, and it pays to shop around.