California’s new temporary license tag law: for some car buyers, a nightmare on wheels

California car buyers face new headaches and hazards, thanks to a new law that took effect on January 1, 2019.  Some unlucky car buyers may end up losing their cars, and their jobs, or in prison — because someone else screwed up.

The new law requires car dealers to install temporary license tags that expire 90 days after consumers purchase a new or used car.

Until this year, dealers who sold cars without permanent plates taped a folded-up “report of sale” inside the back window, where the expiration date was difficult, or impossible, to read. The new temporary tags have prominent expiration dates and bar codes that make them easy for toll collectors, police, repossession companies, parking enforcement, and others to target, simply by scanning the tags with an inexpensive scanning tool.

In many other states, when you buy a car from a car dealer, the dealer must install permanent metal plates on your car before it leaves the lot. But in California, now dealers give you temporary tags, while you wait for the permanent plates to arrive.

Under California law, you must install the permanent plates as soon as you get them, or within that 90-day window. But here’s the catch:  if you don’t get the permanent plates on time, you can be pulled over by the police or Highway Patrol while you’re driving along and minding your own business, and ticketed for having expired tags — even if it’s not your fault.

You read that right. YOU are the one who suffers, even when it’s the car dealer, Department of Motor Vehicles (DMV), or “first line service provider” chosen by the car dealer who failed to send you the permanent plates on time.

After 90 days are up, you are suddenly subject to being pulled over and ticketed, or worse.  The penalties don’t fit the “crime,” especially since the license numbers on the temp tags are clearly visible for an extended period, and may be legible for many more months, making your car easy for law enforcement, toll collectors, or others to spot.

Temporary tags may cause tickets to skyrocket

What will happen in California, now that temporary tags make it ridiculously easy for police, repossession companies, and others to track cars and scan the tags, so they can target consumers stuck with expired tags?

Here’s what happened in a small village on Long Island, New York, when police started using scanners to track cars: “Since the scanners went live Nov. 2, they have been triggering an average of 700 alarms a day, mainly about cars on the road with expired or suspended registration stickers. Officers have impounded 500 vehicles. They’ve written more than 2,000 court summonses, mostly for minor violations.”

When that’s what happens in a small village, how many more car owners will be ticketed, lose their cars, or be hauled into court in California?  Fasten your seatbelts. We’re in for a rough ride.

In response to a recent Public Records Act request from Consumers for Auto Reliability and Safety, the California Highway Patrol provided data showing that from January 1, 2018 through December 31, 2018, the CHP impounded 54,442 vehicles. Those numbers are likely to skyrocket.  Plus police and parking enforcement in cities, towns, and rural areas will issue more tickets and add even more cars to the pool of impounded vehicles.

No warning

The DMV fails to have a system in place to warn consumers about the potentially serious consequences of having an expired temp tag, or to remind hapless car buyers when the deadline is near. In fact, DMV officials tout being pulled over on the freeway, with traffic zooming by, or on a remote, isolated rural road, as an appropriate, effective way to learn your temp tags have expired and you are entering the twisted Twilight Zone of attempting to deal with deadbeat dealers and the DMV.

Serious risks

For most motorists, at a minimum, traffic stops cause anxiety and delays. The tickets are also costly and can cause real hardship.  For some, they can be fatal. What starts out as a routine traffic stop may escalate and rapidly spiral out of control. Relatively trivial violations sometimes lead to violent death. Especially when drivers are African-American, Latino, or other persons of color, they face a higher degree of serious, potentially life-threatening risks. Remember Philando Castile? And Sandra Bland?  They lost their lives during traffic stops for minor violations. But California’s DMV and other state officials blithely dismiss concerns about the safety of motorists who are pulled over by police or the CHP just because they have expired tags.

A fix-it ticket you cannot fix

The DMV also scoffs at the notion that being ticketed can have devastating economic consequences.  According to the DMV, “The fine amount can differ depending in the county where a violation occurs. The fines range from $25 with proof of correction up to $197 without proof of correction.” That may not seem like much to a highly paid, high-level DMV executive, but for many families struggling to make ends meet, that can be a real hit.

As if that’s not bad enough, the DMV adds: “Drivers may receive multiple tickets if they delay making the correction.” Uh-oh.

For many car buyers, trying to get “proof of correction” from the DMV is an exercise in extreme frustration. A common scenario: a car dealer goes out of business without submitting the registration documents, leaving hundreds of consumers unable to get their permanent plates.  When that happens, it can take the DMV more than a year to sort things out.

Meanwhile, YOU are the one waiting in line at the DMV, pleading for help, and getting hit with tickets — over and over again, sometimes until your car is towed away and impounded. Then you get hit with hefty towing and impound fees. Catch 22: If you’re not the registered owner, even if you pay all the fees, you still cannot reclaim your car.

Bottom line: Those tickets can add up. Fast. Even if you are trying desperately to get things fixed. Get too many citations, and your car is impounded by the police or CHP.  For someone who needs their vehicle to keep their job, or take their disabled child for medical treatments, or get their kids to day care or school, losing a car because it was impounded can be a disaster.

Whose idea was this absurdly unjust system?

Assemblymember Kevin Mullin (D-San Mateo) authored this anti-consumer legislation (AB 516) at the behest of toll companies, car dealers, “service providers” chosen by car dealers, and police agencies.

In 2013, toll companies complained to Mullin that they were losing millions of dollars in revenue when scofflaws driving newly purchased cars with car dealer tags on them blew through toll booths without paying the tolls.  The car dealer tags typically trumpet the name of the dealership — like “Toyota of XXX” — but provide no identifying number so that toll operators can locate the drivers and collect.

The toll collectors convinced Mullin to carry a bill to require temp tags, to stop the scofflaws and increase their revenues. But the first version of Mullin’s legislation, introduced in 2014, failed to pass, because it was opposed by the California New Car Dealers Association.

The dealers view tags that display their names as a terrific way to advertise. Temp tags could interfere with their unique way of getting their names in front of more eyeballs, on the roads and in driveways.

To appease the car dealers, the next year Mullin added an increase in the so-called “document fee” and other fees that car dealers and their “service providers” are allowed to charge consumers.  He also allowed the dealers to include the name of their dealership on the temporary tags, for advertising purposes.

The toll company / car dealer legislation was opposed by non-profit pro-consumer and civil rights groups, who sought reasonable protections for car buyers who cannot get their vehicles registered, or get their permanent plates, through no fault of their own. Those groups and attorneys who represent victims of abusive car dealer / DMV practices cited numerous examples of totally innocent consumers who have been pulled over and ticketed, even before the new law was on the books.

Some victims were also threatened with arrest, or actually handcuffed and arrested. Some had their cars towed away and impounded. Then the DMV refused to allow them to get their cars out of impound, even if they paid all the tickets and the hefty impound fees, because they weren’t the registered owners.  All because a car dealer, “service provider,” or the DMV messed up or deliberately stalled handing over their permanent plates.

New law threatens to harm low-income consumers and communities of color

One of the civil rights non-profits opposed to Assemblymember Mullin’s legislation, the Lawyers Committee for Civil Rights of the Bay Area, wrote:

“LCCR recently published, in collaboration with other groups, a report entitled Not Just a Ferguson Problem: How Traffic Courts Drive Inequality in California, which shows the many ways that low-income California drivers, and particularly communities of color, are impacted by unfair laws that result in license suspensions and hefty fines, and that lead people into an endless cycle of debt and court involvement from which they cannot extricate themselves. Rather than reverse this trend, AB 516 would contribute to it.”

Read more:  Letter from Lawyers Committee for Civil Rights of the Bay Area

Making matters worse: In California. car dealers are not required to provide car buyers their permanent plates within 90 days.  In fact, California’s DMV actually allows car dealers to have the plates sent to themselves, instead of the car buyers. This is an open invitation for dealers to cheat their customers.

Adding insult to injury: the car buyers pay the car dealer for the permanent plates and the registration when they buy the car. But they have no control over when their car is registered, or when they get their plates. They are at the mercy of the car dealers, the dealers’  “service providers,” and the DMV.  But it’s the car buyers who are penalized if the plates are late, or never arrive.  Obviously, this insane “Catch-22” system is rife for abuse.

Looking for help from the DMV? Good luck with that.

In response to complaints about abuses, DMV officials shrug and dismiss them, claiming that when a ticket is issued, it is merely a “fix-it” ticket.  But here’s the hitch: you cannot get it fixed.  Hapless car buyers have spent countless hours waiting in lines at the DMV, going back over and over again, pleading to have their registrations completed, only to be told:

  • “Sorry, there’s nothing the DMV can do.”
  • “Sorry, it’s under investigation and we have no idea how long that will take. It might take years.”
  • Sorry, before you can get the registration, and your plates, you need to post a bond.
  • “Sorry, there’s a problem with the registration, and you need to work it out with the dealer.”
  • “Sorry, someone needs to pay off a lien, that costs thousands of dollars, before the dealer can get the title and complete the registration.”
  • “Sorry, you need to pay off all the parking and speeding tickets — issued to the former owner — first.”
  • “Sorry, you need to pay the DMV for past registrations that were overdue, including the penalties.”

Temporary Operating Permits Scarce, Unpredictable

Occasionally, the DMV  doles out a “Temporary Operating Permit” to a consumer caught in this bind, but according to an official with the California State Transportation Agency, the DMV has no standards for deciding who gets a permit, or how long it lasts, leaving it up to the office manager’s “discretion.”  That lends itself to discrimination, based on whatever the manager’s biases may be.

However, before you can get a “Temporary Operating Permit,” the official wrote that “one requirement is that the registration fees have been paid”  — by the dealer. Good luck with that. That’s the deadbeat who ripped you off and went belly up without paying the fees to the DMV, or the arrogant characters in the gleaming palatial new car dealership who hang up on you whenever you call to inquire about when you can drive again without fear of being pulled over at gunpoint.

Why can’t you get your car registered, or get your permanent plates on time?

Common situations that lead to this nightmare scenario:

  • Glitches at the DMV, like entering the wrong Vehicle Identification Number, or losing track of the registration documentation.

 

  • Dealers who sell used vehicles without having the title, often because the former owner still owed money when he or she traded in their car. Their lender has a lien on the title, until the loan is paid in full. Until the dealer has a clear title, they may not be able to register the car.

 

  • Dealers who have the permanent license plates sent to them, instead of to the consumer.  The dealer refuses to send them the plates, and instead demands extra money  — holding the plates for ransom.

 

  • Dealers or “first line service providers” chosen by the dealer and approved by the DMV who fail to send the permanent plates on time, or send them to the wrong address

Dealers holding plates for ransom

Last year, a bus driver in Los Angeles  bought a used car from an independent used car lot.  As usual, she paid for the permanent plates and the registration. Without telling her, the dealer chose to have the permanent plates sent to the dealership, instead of to her. Over 90 days later, she was still waiting for her plates.  One day, the police pulled her over and handed her a so-called “fix-it” ticket. She explained the situation, but the officer was unsympathetic.

She called the dealership. The dealer said he had her permanent plates. But he refused to give her the plates, unless she paid nearly $300 extra for them. The dealer refused to put his demand in writing, or to accept a check or credit card. He told her to bring cash.

She was infuriated, and considered filing a lawsuit.  But her resistance wore down, after she was pulled over and ticketed again, and again. The tickets cost her hundreds of dollars.  But even worse — If she didn’t get the plates soon, she faced being arrested and having her car towed and impounded.  She finally paid the dealer nearly $300 more for permanent plates she had already paid for, when she bought the car.

Even Kansas has better laws against such practices

Consumers in other states, like Kansas, have better protections against car dealers who jerk consumers around and withhold car titles. For example, car dealers in Kansas are required to provide car buyers with title to their cars within 60 days. If the dealer fails to comply with the law, the transactions are void and consumers are entitled to a full refund.

Read more: Wichita car lot hit with $140,000 fine over business practices

Who opposed AB 516?

Consumers for Auto Reliability and Safety

Consumer Federation of California

California Rural Legal Assistance Foundation

Lemon law / auto fraud attorney and Judge Pro-Tem Steven Simons

Lemon law / auto fraud attorney David Valdez

Lemon law / auto fraud attorney Greg Babbitt

Lemon law / auto fraud attorney Balam Latona

Lawyers Committee for Civil Rights of the Bay Area

Citizens United for a Responsible Budget (CURB)

Law firm of Kemnitzer, Barron & Krieg

Courage Campaign

News reports

News reports highlight car buyers’ nightmarish experiences with dealers who failed to complete their registrations, even though they had paid the dealers to handle the paperwork, and were dependent on them to do their jobs. Consumers for Auto Reliability and Safety alerted the news media about these cases:

ABC Channel 10 (San Diego): U.S. Military Veteran faces ordeal because of car dealer who failed to register his car

ABC Channel 30 (Fresno): Clovis car dealer leaves hundreds in limbo

NBC Bay Area (San Jose): Dealer can’t register car, woman wants refund

Roger Lanctot in LinkedIn: Car dealers making yo-yo’s out of legislators

 

San Francisco Chronicle Editorial calling for a “quick fix” to address “legitimate concerns” with Assemblymember Mullin’s legislation:

San Francisco Chronicle Editorial: “License plate bill needs a quick fix”

Change an expiration date, go to jail

Raising alarms among groups that oppose adding more laws that result in imprisonment for minor offenses — selectively criminalizing  low-income consumers and people of color — AB 516 would make altering just the expiration date on a temporary tag a wobbler/ felony offense, subjecting car buyers to a potential prison sentence of 2-3 years.

Imagine: you are a single mom with three kids. You have only one car. You keep being pulled over by the police and ticketed because you have not received your permanent plates. You take time from work and go to the DMV, waiting in line over and over again, to no avail. Each time, you lose desperately needed income.

If you are detained by the police one more time, making you late for work, you will lose your job. In your desperation, you take a magic marker and change just the expiration date on your temporary tags. You do NOT alter the number on the tags, so toll agencies and law enforcement officers can still readily identify the car, for toll collection or public safety purposes.  For this offense, you could be heavily fined, convicted of a FELONY, and sent to prison for 2- 3 years.

Law enforcement agrees: consumers should not be punished for the wrongs committed by car dealers or the DMV

Consumer groups and the California Police Officers Association worked together and drafted amendments to AB 516 that would have addressed the serious problems with the bill, and presented those to the author’s staff, at an in-person meeting. The amendments would have changed the bill so that:

  • When law enforcement officials detect that your car has a temporary tag with an expired date, they would have to check an existing law enforcement database, that they can already access electronically, to find out whether you were issued permanent plates. In a matter of seconds, they can tell. If the plates have not been sent to your address, you would not be pulled over or issued a citation.

 

  • It would be an infraction — not a wobbler / felony —  to alter just the expiration date on a single temporary tag, leaving the rest of the tag unaltered and readily traceable.

The California Police Officers Association, to its credit, expressed the sentiment that its members are not anxious to pull over and detain people who are already frustrated because they cannot get their permanent plates, so long as they properly display the temporary tags, and the car is readily identifiable for public safety purposes.

However, Assemblymember Mullin refused to accept those amendments. Instead, he added a “fig leaf” to the bill that would require consumers who have not received their permanent plates to prove their own innocence by obtaining a form from the DMV and showing it, if they are detained.

That may sound easy, but in reality, it’s just another Catch-22. The form cited in the bill requires that you sign, under penalty of perjury, that you are the “registered owner of record.” But that’s the problem. You are not the registered owner. The DMV has a history of rejecting car buyers’ attempts to fill out and submit those forms, unless their registration is already complete, and in their names. But that’s the problem. It’s up to the dealer to complete the registration.  Gotcha.

 

 

 

 

It IS against the law for car dealers to sell used cars with unrepaired safety recalls

Contrary to the spin from unscrupulous car dealers, and erroneous reports in the news, it is illegal for car dealers to sell dangerous used cars with unrepaired safety recalls. Injured or misled consumers and their surviving family members who sue dealers that engage in such reckless practices usually win confidential settlements. The dealers insist on confidentiality to cover up their illegal activity.The legal settlements also are a telltale sign that the dealers know perfectly well what they are doing is illegal.

So if you discover that a crooked car dealer sold you an unrepaired recalled used car, you should get expert legal advice and fight back.

Here’s the scoop: There is a FEDERAL law against car dealers selling recalled NEW cars. There is a FEDERAL law against car dealers with fleets of 35 or more rental cars from renting, selling, or loaning recalled rental cars.  But — while there is no FEDERAL law against car dealers selling recalled USED cars, if they do, they risk being held accountable under various STATE laws.

No less an authority than the U.S. Federal Trade Commission has noted:

“…state product safety, tort, and other consumer protection laws, provide important safeguards to consumers affected by defective cars.”

An attorney who advises auto dealers has also warned them that if they sell used recalled cars, they face serious sanctions under state laws. According to a report in Automotive News:

“There are theories of liability that plaintiff attorneys may attempt to attach to these vehicles, even if dealers are using good-faith efforts to identify potential open recalls,” says Shawn Mercer, a partner at Bass Sox Mercer, a Tallahassee, Fla., law firm that specializes in dealership franchise law. There is no federal law against selling a vehicle with an open recall. But “depending on the jurisdiction,” Mercer says, “potential liability can stem from violations of state laws or common law tort claims.”  (Emphasis added)

The article also cautions car dealers:

“Selling a vehicle with an undisclosed safety problem makes for dissatisfied customers and can have legal repercussions, even if the dealership was unaware of the recall.” (Emphasis added)

One legal case that stands out, making the point that state law prohibits dealers and other businesses from failing to exercise due care, or acting with negligence, is Houck vs. Enterprise.  Sisters Raechel and Jacqueline Houck were ages 20 and 24 when they visited their parents in Ojai, California.  On their way back home to Santa Cruz, they were killed by an unrepaired recalled rental car — a Chrysler PT Cruiser that caught on fire, and also lost steering.  They ended up colliding with an 18-wheeler semi-trailer truck.

Their parents sued Chrysler and Enterprise under state laws, for failing to exercise the common law duty of care, and for negligence, resulting in wrongful death.  Eventually, on the eve of trial, Enterprise admitted 100% liability — under state laws.  A jury awarded the Houcks $15 million in compensatory damages.

Years later, the President of the California New Car Dealers Association made the false claim that it wasn’t illegal for dealers to sell unrepaired recalled used cars. The Houcks’ attorneys wrote a scathing letter pointing out that violating state civil laws is illegal. The attorneys cited the unanimous jury decision in the Houcks’ favor, and also cited state laws against negligence and common law torts.

CARS worked closely with Cally Houck, Raechel and Jacqueline’s mother, to get a new federal law enacted to prohibit rental car companies or car dealers from renting, loaning, or selling unrepaired recalled cars. The battle lasted for years, with auto manufacturers and dealers actively opposing the bill, even after the rental car industry had dropped its opposition.  But eventually we won.

That victory means that not only do rental car companies remain liable under state laws, but they also face enforcement by the National Highway Traffic Safety Administration (NHTSA), the nation’s premier auto safety agency.

Thanks to the passage of the Raechel and Jacqueline Houck Safe Rental Car Act, NHTSA now has the authority to issue fines or take other action if a rental car company with a fleet of 35 or more vehicles violates the law — even if no one is injured or killed as a result.  Thus, the federal law works to help prevent more tragedies from happening.

CARS supports the ongoing efforts of Senators Blumenthal and Markey, and U.S. Representative Jan Schakowsky, to enact federal legislation to make it a violation of federal law, enforceable by NHTSA, for car dealers to sell unrepaired recalled used cars.

Meanwhile, victims of crooked dealers who play “recalled used car roulette” with their customers’ lives, should get legal advice and fight back, using existing state laws. It’s also important for state attorneys general to enforce the existing state laws against fraud, violations of express and implied warranties, and other provisions of law.

CARS applauds the District Attorney in Sedgwick County Kansas — one of the few law enforcement officials in the nation who is standing up to the powerful car dealer lobby in order to protect car buyers and others who share the roads.

Read More: The Wichita Eagle:  Wichita car lot hit with $140,000 fine over business practices

 

Consumer, safety groups fight back against car dealer “license to kill” legislation in New Jersey

Unscrupulous car dealers got New Jersey Senator James Beach and Assemblymember Louis Greenwald to carry anti-consumer, anti-safety, anti-enviroment legislation that threatens to open the floodgates for car dealers to sell hazardous recalled used cars in New Jersey, endangering the lives of their customers, their families and other passengers, and all who share the roads.

The bills would also allow New Jersey car dealers to sell vehicles that fail to comply with federal clean air / emissions standards.

The bills, S2740 and A4292, are the epitome of special-interest legislation.  “Coincidentally,” the owners of the Foulke car dealerships in Cherry Hill, NJ, contributed over $500,000 to a leadership PAC controlled by NJ Democratic power broker George Norcross shortly before the elections in NJ last November. So some politicians, such as Senate President Steve Sweeney, are likely to feel beholden to them for winning their seats.

The Foulke car dealerships have come under fire from NJ’s Attorney General for allegedly engaging in a number of illegal practices, and have been enjoined from engaging in such activity.

Assemblymember Greenwald, author of A4292, also has close ties with auto dealers, and has carried legislation that favors car dealers before.

The “license to kill” bills in NJ are similar to other measures that legislators have rejected in other states where car dealers got them introduced. Most recently, the car dealers’ bills were withdrawn in New York and Massachusetts, once lawmakers realized how harmful they would be.  Similar bills have also been defeated, or had the harmful provisions removed, in California, Maryland, Oregon, and Virginia. New Jersey legislators rejected a similar measure authored by Assemblymember Moriarty in 2015.

There is overwhelming public opposition to allowing car dealers to sell recalled used cars, with or without “disclosure,” which merely shifts legal liability onto victims. Statewide polling in New Jersey found that hardly anyone thinks such a law would be a good idea.

The car dealer “license to kill” bills are opposed by the nation’s leading consumer / auto safety organizations, plus major consumer, civil rights, and environmental groups in New Jersey, and the New Jersey State Bar Association.

They are also opposed by safety advocate Alexander Brangman, whose daughter Jewel was only 26 when she was killed by an unrepaired recalled Honda Civic with an exploding Takata airbag. She was in a low-speed collision involving multiple cars. Everyone else walked away. But the defective Takata airbag spewed metal fragments into the passenger compartment, severing an artery in Jewel’s neck, causing her to bleed to death.

The only supporters of the anti-consumer bills are trade associations for car dealers, who seek to evade legal liability for engaging in fraud and selling deathtrap cars. Attorneys for car dealers have advised them that the legislation is needed in order to eliminate the existing protections under various state laws, which prohibit auto dealers from engaging in unfair and deceptive acts and practices, violating express or implied warranties, committing fraud by misrepresenting the condition of the car or concealing a material fact such as the safety recall status, failing to fulfill their common law duty of care, being negligent, or causing wrongful death.

The New Jersey bills are even worse than in other states, because they would also drastically limit attorneys fees for victims of fraud committed by car dealers, making it virtually impossible for individual attorneys or the state’s Attorney General to act, regardless how harmful and widespread the car dealers’ practices are, or how many victims are harmed.

That means that even if the dealers fail to “disclose” the safety recalls, and make false claims about the safety of the cars they sell, they can evade being held accountable.

Here are some of the letters of opposition to the car dealer bills:

Consumer Federation of America, Consumers for Auto Reliability and Safety, National Association of Consumer Advocates, Consumer Action, and The Safety Institute

Center for Auto Safety

Alexander Brangman, father of Jewel Brangman, who was killed by an unrepaired recalled car

New Jersey State Bar Association

Consumers Union

New Jersey Citizen Action, Sierra Club of New Jersey, NAACP New Jersey, The Latino Action Network, Ironbound Community Corporation, La Casa De Don Pedro, New Jersey Tenants Organization, Environment New Jersey, American Federation of Teachers Local 2274 Ramapo College of New Jersey

Consumers League of New Jersey

Pam Fischer, founder of the New Jersey Teen Safe Driving Coalition and former Director of the New Jersey Division of Highway Traffic Safety

Garden State Bar Association

News reports:

Philadelphia Inquirer: N.J. considers a consumer bill that only car dealers love

News 12 Investigates: Car recall bill may provide less protection in legal disputes

News 12 Investigates:  Groups oppose bill to require auto dealers to notify buyers about recalls

NJ101.5 Radio: Consumer groups fear the backhand effects of New Jersey car recall legislation

NJTV: Would new bill harm or help consumers buying used cars?

Editorial:

NJ Star-Ledger Editorial Board: Hit the Brakes on Bill Favoring Auto Dealers

 

 

Dealers increase profits at customers’ expense

When you shop at a car dealership, watch out for expensive add-ons and costly financing. Often items like extended service contracts, “theft etch” and “GAP” are a rip-off, and usually you can get a better rate on the financing yourself, by shopping around.

For example, many service contracts and extended warranties have fine print that excludes “pre-existing conditions.” So if the engine blows, your claim may be denied when the provider blames the problem on a lack of maintenance by a prior owner, or a component that was supposedly faulty when you bought the car.

How much extra do add-ons and dealer-arranged financing cost? They can add $5,000 or more to the price of a car, without adding any real benefit. Of course, car dealers push add-ons aggressively because they are so profitable — for them.

According to Automotive News, in the first quarter of 2018, AutoNation, the country’s largest new car dealership chain, averaged a gross “finance and insurance” profit of $1,779 per unit sold. That’s just their profit.

Bottom line: If you want to save big, it’s smart to get your own financing and decline the high-cost / fat-profit / low value add-ons.

Why can’t you buy a new car without going to a car dealership?

Car dealers and corrupt politicians conspire to keep consumers captive, forcing them to go to greedy car dealerships to purchase a new car. This outrageous monopoly costs American car buyers billions of extra dollars each year.  Plus it often ruins lives when dealers engage in fraud, deception, or sell cars with killer safety defects.

truTV’s  Adam Conover, famous for his riffs on “Adam Ruins Everything,” explains “The REAL Reason Why Car Dealerships are the Worst”

What can you do to break free from the car dealer monopoly? Well, if you are buying a USED car, you don’t have to go there. You can usually get a much better deal on a nice, safe used car without having to spend 4 – 6 hours being tormented by a greedy car dealer.  This is how some of the nation’s leading consumer advocates buy a car — without the hassles and risks that come with buying from a professional crook:

12 Tips for how to get a good deal on a nice, safe used car

Did CarMax sell you an unsafe car?

You’ve probably noticed the ads. They’re on TV, at sports events, and on the radio.  CarMax has an enormous ad budget and spends millions to paint  a rosy picture about the cars it sells. But behind all the hype, dangerous cars with killer safety defects are lurking.

CarMax boasts that all the vehicles it offers for sale must pass a rigorous inspection, before they can be sold as “CarMax Quality Certified” vehicles. But what they don’t want you to know is that they fail to get the FREE safety recall repairs done.

Instead, they charge top dollar for cars with killer safety defects. In fact, according to a recent survey of CarMax vehicles for sale in California, Massachusetts, and Connecticut, over 25% of the vehicles they offer for sale have unrepaired safety recalls.  One truck had 6 unrepaired safety recall defects — a deathtrap on wheels.

CarMax is the largest retailer of used cars in the U.S. They took in over $15 billion last year, but they don’t care enough about the safety of their customers to hire employees and give them the job of delivering cars to franchised car dealers for repairs and picking them up when they’re ready.  Instead, they are perfectly willing to put the lives of their customers, their families and friends and other passengers, and others who share the roads, at risk, to maximize their profits.

One of the most common defects in CarMax cars: hazardous Takata airbags that are prone to exploding with excessive force, spewing metal fragments at drivers and passengers. Over 20 people have been killed by these ticking automotive time bombs.  Here’s what can happen at any time to hapless consumers who end up riding in cars with the faulty airbags:

People Magazine: Scott Eastwood’s girlfriend Jewel Brangman died from faulty airbag in crash.

The crash that killed Jewel was basically a fender-bender. The recalled Honda that caused Jewel’s death was sandwiched between two other cars, in a low-speed crash. Everyone else walked away. But a metal fragment from the exploding airbag sliced into Jewel’s neck and she bled to death.

The only way CarMax is going to stop endangering lives is for their own customers to speak up. We hope that happens before there are more tragedies like the one that killed Jewel Brangman.

Did CarMax sell you a car with an unrepaired safety recall?  If they did, we want to hear from you. Such sales are very likely a violation of state consumer protection laws. We encourage you to fight back.

Here’s where to contact CARS. Thank you for helping save lives!

 

Cars with deadly Takata airbags you may not even know about

Last March, Las Vegas teen Karina Dorado was in a low-speed crash that normally wouldn’t have resulted in serious injuries. But she was driving a 2002 Honda with a checkered past. It had once been in a crash and was “totaled” by the insurance company.  Some people might expect that to be the end of the road for that car.

But insurers auction off wrecked cars to the highest bidder. Those wrecks are often purchased by unlicensed, untrained rebuilders who lack the equipment, or the desire, to perform a proper repair.  It would be very expensive to fix the vehicles so that they are safe to drive.

Instead, they cut corners, leaving the vehicles with major problems that can cause death or serious injuries.

According to news reports, the Honda that Dorado was driving had a recycled recalled Takata airbag that was removed from a 2001 Honda Accord. It was not the original one that came with her car. Instead, it was a faulty airbag that was prone to exploding with excessive force, spraying metal fragments into the driver’s face and neck.  When her car was in the crash, metal from the recalled airbag punctured Dorado’s windpipe, almost causing her to bleed to death.

Under the the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act of 2000, it is illegal to sell a used automotive part that was recalled, but not repaired. However, the law is seldom enforced.

How can you avoid buying a car with a recycled killer Takata airbag?

  1.  Check the federal database of total loss vehicles established by the U.S. Department of Justice. Keep in mind that no database is 100% complete, and there are huge gaps in each of them.  This one includes ONLY vehicles that were “totaled” by the insurer, or self-insured company (such as a rental car company).  It does NOT include vehicles that sustained major damage, but were not totaled, or recalled cars.
  2. ALWAYS get any used car you are considering buying inspected by both a skilled mechanic and a reputable auto body shop of YOUR choosing BEFORE you buy. Make sure they check for signs that the car was in a crash that may have caused the airbags to deploy. Don’t trust the seller. Insist on getting your own inspection. If they won’t let you do that, walk away. They are hiding something. A good place to find a good mechanic and body shop: Car Talk’s Mechanics Files

More tips on how to buy a car, without having to go to a car dealership

Read more:  KSAT Investigative report: Why are recalled Takata airbags being recycled?

Why don’t consumers get unsafe recalled cars fixed?

GM, Fiat Chrysler, Honda, the National Safety Council, the National Highway Traffic Safety Administration, mayors and other elected officials, are investing millions in an attempt to reach owners of older recalled cars and persuade them to take their vehicles to car dealers for recall repairs. They’re using advertisements, social media, even private investigators who track people and find out who owns vehicles that have repeatedly changed hands.

They are trying to impress on the owners that their safety is at stake, and driving without repairing the safety recalls is too risky. The biggest challenge: the millions of older vehicles with Takata airbags that are prone to exploding with excessive force, spewing shrapnel into the faces, necks, and chests of drivers and passengers, causing victims to bleed to death.

But the messages that consumers are getting from the auto industry are extremely mixed. The former Chairman of the National Automobile Dealers Association, Jeff Carlson, a Colorado car dealer, claims that “only 6 percent of recalls are ‘hazardous.'” Carlson and the NADA have been opposing federal legislation that would require dealers to fix all safety recall defects on used cars, prior to sale — in addition to the existing protections under state laws in all 50 states.

He claimed that “Such a move would ground millions of cars unnecessarily and diminish vehicle trade-in values.” That attitude is dangerous, reckless, and irresponsible, but it’s all too common in the car dealer world. By that nutty calculus, none of the following safety defects would be considered “hazardous” — brakes that fail, steering loss, sticking accelerator pedals, catching on fire, wheels that fall off, seat belts that fail in a crash, or a myriad of other safety defects that have claimed hundreds of lives and maimed thousands of people.

No wonder consumers are confused about whether it’s worth taking time off from work to take their car to a dealership that may be over 100 miles away, and where they may not get a loaner car, while their car sits waiting for repairs. Meanwhile, many consumers would be without their only means of transportation to get to work, and get their kids to school, or get to medical appointments.

Car dealers across the country have also been urging state legislatures to allow them to get away with selling unsafe, unrepaired recalled cars without repairing them first. What message does that send to the public about the importance of getting safety recall repairs? If the cars are so unsafe, they should be repaired first, right? Shouldn’t the car dealers, who are the professionals, set the right example? Of course they should.

It appears that the car dealers’ double standard is aimed more at forcing consumers to go to car dealerships for repairs, than at ensuring their safety. Once there, consumers are often subject to high-pressure tactics to sell their car and purchase a new one. Among the scams common at many car dealerships — refusing to return the car keys unless the consumer buys another car.

Recent complaints about car dealers posted on Quora: “I had my car keys taken at the dealership and was almost forced to purchase a car (refused to let me leave).”

Automotive News: Carlson vows to press NADA’s fight against regulation

Bottom line: Consumers should take safety recalls seriously. So should auto dealers. Car dealers need to do the right thing, comply with state laws, and stop selling unrepaired, defective recalled used cars — shifting the burden onto consumers. Auto manufacturers should offer roving repairs to consumers with unrepaired recalled cars where they work or at their homes. And the National Automobile Dealers Association should acknowledge publicly that of course all the cars with Takata airbags and other safety recall repairs are unsafe, and should be repaired immediately.

Lawsuit: Dealer sold “fake” warranties on used cars

Ever wonder what happens when you buy a warranty or service contract from a car dealer?  Unfortunately, some dealers just pocket the money.  Then if your car needs repairs, you are left with no coverage.  Some dealers have faced criminal penalties for engaging in this scam, but often it goes undetected.

A lawsuit filed on behalf of consumers in New Jersey alleges that a dealer in that state repeatedly sold so-called “warranties” or service contracts on expensive used cars, but failed to activate the policies.

See news report:

ABC 7 New York: Dealer of high-end used cars sold “fake” warranties

Don’t fall victim to car dealer scams.  CARS tips for how to get a good deal on a nice, safe, reliable used car — without having to set foot on a car dealer’s lot

 

Buying a car from a dealer in California may get even more hazardous to your financial health

When you buy a car at an auto dealership, you should be able to get all the terms in writing BEFORE you sign anything — right?  Right. But for California car buyers, that may change. Why? Because car dealers are aggressively lobbying to get rid of the consumer protection laws in California that currently prohibit them from using “e-contracting.”

The California New Car Dealers Association and Enterprise Holdings (one of the largest sellers of used cars) are pushing for passage of AB 380, authored by Assemblymember Matt Dababneh (D-Van Nuys), powerful chair of the California Assembly Committee on Banking.

But pro-consumer groups including Consumers for Auto Reliability and Safety, CALPIRG, the Consumer Federation of California, Consumer Action, Public Counsel, the California Reinvestment Coalition, the Center for Responsible Lending, and Public Good are fighting back, to preserve protections for California car buyers.

Who would benefit the most if AB 380 passes?

One of the biggest winners would be Credit Acceptance Corp. What’s their business model?

Mother Jones: “They Had Created this Remarkable System for Taking Every Last Dime from Their Customers: Welcome to the Lucrative, Predatory World of Subprime Auto Loans”

Here’s why groups that work on behalf of consumers and against powerful, crooked special interests are opposing AB 380:

Large coalition of pro-consumer, pro-economic justice organizations opposes AB 380

Consumers for Auto Reliability and Safety opposes AB 380 (Dababneh)

Consumer Federation of California

CALPIRG

What’s wrong with e-contracting in car transactions?

Unscrupulous car dealers and shady lenders LOVE “e-contracting.” A LOT. That’s because the combination of high-pressure sales tactics at the car dealership — aimed at consumers who are often tired and feeling rushed after hours of haggling and test-driving cars — and all-electronic transactions make it much easier for dealers and crooked lenders to get away with fraud, forgery, and other illicit (but oh-so profitable!) flim-flam.

Among crooked car dealers’ favorite e-contracting scams: selling cars in excess of the agreed-upon price, “packing” loans with thousands of dollars in unwanted, high-profit, worthless add-ons, overcharging for license fees and pocketing the difference, selling cars that fail to pass smog,  charging bogus “government” fees, and engaging in other types of fraud.

Unlike with home purchases, where there are strict, built-in protections, auto sales transactions fail to require the seller to provide you with a written, good faith estimate of all the costs three days in advance, before you sign.  Buying a car is much riskier. It’s also riskier than credit card transactions, where there are limits on your liability in the event of identity theft or fraud.

You have a lot to lose

Under the federal Truth in Lending Act, you are entitled to get all the disclosures about an auto loan in writing. BEFORE you sign anything. Like: What will the monthly payments be? How much will you have to pay in interest?  How long will the loan last? Up front. In your own hands. Then if you wish, you can leave the dealership and take that document with you and shop around, to see if you can find another dealer or lender who will beat that offer. You have that important right, thanks to federal law.

California law also prohibits dealers from using e-contracts. That means when you buy a car in California, the dealer should hand you a paper document, with everything in writing, all nicely filled in. You can look at the entire document at one time, or zero in on any part of it. You get to review the whole contract before you decide whether you want to agree to anything. You can tell that “friendly” F & I manager to stop hovering over you, while you read it. You can take it with you while you sip a cup of coffee in a quiet spot. You can show it to your spouse, or friends, or an attorney, or anyone you wish,  BEFORE you sign.

But if the dealers and lenders have their way, and gut California’s law against e-contracting in auto sales, dealers will be able to get away with concealing vital terms on a computer screen that you may not even be able to read. You certainly cannot take the computer or e-pad with you and shop around. It won’t be in your control. Instead, it will be in the dealership’s control.

If  AB 380 passes, car dealers can lure consumers into signing in advance that they agreed to let the dealer use e-contracting, to buy a car.  They can make it sound like it’s no big deal. Then they can use that against car buyers, if there are any disagreements over what they agreed upon. Making matters worse, “signing” can be done by anyone who has access to the computer — with the click of a mouse.  It would become virtually impossible to prove your signature was forged. Your “signature” could be added with a click. By anyone.

And — you won’t get anything in writing, on paper, until AFTER the documents have already been “signed.” By then, it’s too late, and you may be held legally obligated to pay, even if you are the victim of a scam.

Consumers fight back

Some dealers in California have jumped the gun and are already acting as if it were legal for them to use e-contracts. With unfortunate but predictable results. Consumers are starting to complain they didn’t get to see the screen, and dealers are adding thousands of dollars extra, above the purchase price that was negotiated; giving the consumers thousands less than the agreed-upon value of their trade-ins; and adding in worthless, expensive service contracts  — even when the consumers rejected them, during negotiations. One dealer added over $4000 in multiple unwanted, worthless extra service contracts onto the purchase of a new car, plus “surface protection” costing over $1200 and “Lo Jack” costing $695 — extremely high-profit items for car dealers.

In some cases, consumers have won the right take these dealers to court, because the judges agreed that the contracts were not binding, citing the existing law that prohibits e-contracting. Otherwise, the consumers could be forced into arbitration, basically being compelled to surrender their Constitutional right to fight back in a court of law.

If the predatory dealers and lenders win, and AB 380 passes, consumers would be likely to lose those court challenges they are winning now, and could be forced to give up their ability to hold unscrupulous dealers accountable.

Winners and Losers

If AB 380 passes, the biggest winners will be large auto dealership chains like AutoNation, which took in over $19 billion in gross revenue in 2014. They are publicly traded on Wall Street. Their biggest investor? Bill Gates.

The biggest losers will be California’s new and used car buyers who can ill-afford to give away thousands of their hard-earned dollars to mega-dealers and big banks for the privilege of being ripped off.

What can you do to help stop AB 380, the crooked car dealers and fraudulent lenders’ favorite bill?

Call your Assemblymember and tell them to vote NO on AB 380. Buying a car from a car dealer in California is already dangerous enough.  Here’s where to find out who your Assemblymember in Sacramento is: Find Your Legislator

Thank you! Every call helps make a difference!

Read more:

Large coalition of pro-consumer, pro-economic justice organizations opposes AB 380

Consumers for Auto Reliability and Safety opposes AB 380 (Dababneh)

More pro-consumer organizations are also opposing AB 380:

Consumer Federation of California

CALPIRG

Public Counsel

Attorney David Valdez, who represents many victims of unscrupulous auto dealers and lenders

 

 

 

DO NOT drive these Honda cars. Get them fixed. NOW.

A 50-year-old Riverside, California woman was recently killed by a faulty, recalled airbag in her 2001 Honda Civic. Cutting corners on safety, airbag supplier Takata produced the airbag with cheap but volatile sodium nitrate.

In even a low-speed collision, the chemical explodes with excessive force, sending shards of metal into the passenger compartment. It’s been described as having a hand grenade go off in the car.

The woman, Delia Robles, was driving to get her flu shot when her Civic collided with a pickup truck. Officials at the National Highway Traffic Safety Administration (NHTSA) have been warning owners of the cars not to drive them, and to get them repaired immediately.  NHTSA found that in a collision where the airbags inflate, the odds of being killed are 50-50.  In other words, those cars are ticking time bombs.

Here are the cars that NHTSA has identified as posing the highest risk:

2001-2002 Honda Civic, 2001-2002 Honda Accord, 2002-2003 Acura TL, 2002 Honda CR-V, 2002 Honda Odyssey, 2003 Acura CL, 2003 Honda Pilot.

Honda is offering to tow these cars to dealerships for repairs. They should also offer to send roving mechanics to the owner’s home or workplace, since a leading barrier to getting repairs is the fact most people have only one car, and they depend on it to keep their job and get their kids to school. For many owners of recalled cars, the closest dealership may be a long distance away, and they may not be able to drop off their car on a weekday, and then get back home and back to work.

Owners of recalled cars may also have difficulty getting time off from work to drive a long distance for repairs. Many at-risk owners may not be proficient in English or Spanish, and may not understand the risks they face.

Some owners have also had bad experiences at car dealerships, and may be fearful of going to a dealership again. Unfortunately, some dealers may take advantage of the safety recalls to pressure them to buy another car, while holding their recalled car for repairs.

Where to check the safety recall status of your car, at a government website:

https://vinrcl.safercar.gov/vin/

If you own one of these recalled cars, here’s what CARS recommends:

Contact Honda directly.  Here is Honda’s toll-free number:  1-888-234-2138

Take Honda’s offer to provide you with a loaner or rental car,  and also have them tow your car to the dealership for the FREE repairs.

Read more:

CNN report: Stop driving these cars NOW.

Daily News report: Many Southern California cars have dangerous airbags

 

 

 

 

 

 

 

Buying a used car? YIPES!!

Comedian and commentator John Oliver lambastes crooked car dealers and greedy auto lenders. These are the unscrupulous characters we’re battling with, to protect consumers.

How can you avoid becoming a victim of greedy dealers and Wall Street bankers? It’s easier than you think. Here’s how you can get a good deal on a nice, safe, reliable used car — without having to deal with professional crooks.

How to get a good deal on a nice, safe, reliable used car