“Arizona Auto Dealer Arrested, Charged with Fraud”

TEMPE, AZ (3TV/CBS 5) – A Tempe used car dealer arrested Wednesday is facing multiple charges of theft and fraud, accused of cheating clients out of hundreds of thousands of dollars.

Detectives with the Arizona Department of Transportation Office of Inspector General say Farhad Kankash, owner of Onyx Motorsports, allegedly committed fraud against both customers and lenders.

ADOT officials say Kankash had allegedly committed several types of fraud, including failing to provide titles to customers who purchased vehicles, not paying off liens on trade-in vehicles, and defrauding lenders by obtaining multiple loans for the same vehicle.”

Want to avoid being ripped off and having your life ruined by a greedy, sleazy car dealer? Here’s how to get a good deal on a safe, reliable used car without having to set foot on a car dealer’s lot:

12 Top Tips from auto consumer experts– step-by-step How to Buy a Used Car

Read more: AZFamily.com:  Arizona Auto Dealer Arrested, Charged with Fraud

NEVER trust a car dealer to make sure a car is safe.

When you shop at a car dealership, you shouldn’t have to worry that they’re deliberately selling you a deathtrap. But that’s what many unscrupulous new and used car dealers all over America are doing.

Car dealers keep getting caught selling vehicles with deadly safety recall defects, like faulty brakes, loss of steering, catching on fire, sticking accelerator pedals, and exploding Takata airbags that shoot metal shrapnel into the passenger compartment, causing drivers and passengers to lose their eyesight, suffer brain damage, or bleed to death.

Car dealers coast-to-coast are exploiting the widespread misconception that if you shop at a dealership, they must have gotten any deadly safety defects fixed. Otherwise, why pay extra, if the car is no safer than if you bought it from a stranger who posted it on Craig’s List?

Even highly sophisticated consumers, including Members of Congress and reporters who cover the automotive industry, suffer from this mistaken belief that somehow vehicles are safer if they’re on a car dealer’s lot.

That erroneous belief tends to be even stronger when the dealer claims the vehicle was thoroughly inspected, and when the dealer is a major franchised dealership.

U.S. Rep. MarkWayn Mullin, of Oklahoma, a GOP Member of Congress, stated at a Congressional hearing on auto safety that “I understand the responsibility of the driver. But at the same time, if you buy a vehicle new or used, you assume everything’s perfect on it.”

The former Administrator of the National Highway Traffic Safety Administration, Dr. Mark Rosekind, who was testifying at the hearing on behalf of the Obama Administration, agreed.

Recently, Automotive News reporter Richard Truett wrote:

“For me, there’s a certain trust the comes with buying a used car from a franchised new-car dealer. I feel I’m not going to get an unsafe car. And it’s worth paying a small premium to know that the vehicle has been inspected and that technicians examined the critical items. Most techs, I believe, would not let a used vehicle go out for sale if they wouldn’t put their own family in it.”

Sadly, that trust is terribly misplaced. As many news organizations have reported, and the CARS Foundation and our research partners at U.S.PIRG and the Frontier Group have repeatedly found, both new car dealers and used car dealers routinely fail to get deadly safety recall defects repaired, even though the repairs are free.

A car dealer in Hartford, Connecticut sold a young African-American man who was buying his first car a 2011 Hyundai Sonata SE with an appalling 11 unrepaired safety recalls. The safety defects included: faulty airbags, bad brakes, stalling in traffic, and other life-threatening defects. He fought back and won a favorable decision in arbitration, including a refund and his attorneys fees.

More reports about car dealers who sell unrepaired recalled cars with deadly safety recall defects:

Click here to see CARS’ tips for how to get a good deal on a safe used car without having to deal with professional crooks who put their short-term profits ahead of your safety, and the safety of your family and friends.

California DMV punishes car buyers for others’ debts

Yes, it’s unfair. And yes it’s crazy.  Especially now, when California Governor Gavin Newsom and his administration are working hard to protect consumers from debt collectors during the pandemic, to mitigate the economic fallout.

But if you buy a used car in California, the California Department of Motor Vehicles can sock you with having to pay for past-due registration fees and penalties owed by the former owner.

Imagine the shock car buyers feel when they buy a used car, only to find out later that it comes with an unwanted accessory —  a boatload of bad debt.

This happens even to consumers who shop at auto dealerships. And there’s no limit on how much extra you can be charged. An overdue registration can cost you $300, $1000 or more in hidden, unexpected fees and penalties.

California law allows the DMV to impose a lien on the registration, until it is paid in full. It’s illegal to drive a car with expired license tags or registration. So if you refuse to pay, or can’t afford the unexpected expense, you can lose your car. The California Highway Patrol can pull you over, issue a “fix-it” ticket that you can’t afford to fix, or impound your car. If you aren’t the registered owner, you can’t get your car out of impound, even if you scrape together the cash to pay the hefty towing and impound fees.

Glenn Harris, a U.S. Army veteran and devoted family man with a wife and three children, testified before the Senate Committee on the Judiciary and described their ordeal:

“While I was driving to work recently, the CHP pulled me over. They noticed that I was driving with a temporary sticker that had expired, and my car was impounded. The CHP also said there was over a year of back fees owed to DMV that Express Auto Sales never paid.

They said we had to pay the DMV those extra fees, from before we even bought the car, before it could be registered in our names. We can’t afford to pay DMV those unexpected fees, that were not disclosed when we bought the car, on top of what we’re already paying the bank.

I can’t afford to pay the hefty impound fees, which are hundreds of dollars. I also can’t get the car out of impound because I am not the registered owner. Even if I got the car out of impound, I couldn’t afford to get it registered, so I may get pulled over and ticketed again.”

What will it take for the California DMV and lawmakers to end this grossly unfair practice, which can ruin the lives of innocent used car buyers who have done nothing wrong?  All they did was to buy a car from a licensed dealership.

How many Californians have already been made homeless because the DMV and law enforcement agencies seized their vehicles — often their only means of transportation to get to work or school, buy groceries and access medical care and other necessities of life?

Read more: California Vehicle Code Section 9562. (a) When a transferee or purchaser of a vehicle applies for transfer of registration, as provided in Section 5902, and it is determined by the department that registration penalties accrued prior to the purchase of the vehicle, and that the transferee or purchaser was not cognizant of the nonpayment of the fees for registration for the current or prior registration years, the department may [or may not] waive the registration penalties upon payment of the fees for registration due.

This means that the DMV might choose to waive the penalties, but not the past-due registration fees, even if the consumer can somehow convince the DMV that they are totally innocent and were unaware of the prior owner’s debt.

Too Risky: Buying A Car from a Dealer can Ruin Your Life

The car dealership looks like a gleaming palace. But what is really happening inside?

Some car dealers sell vehicles they don’t own. They also fail to pay off the loans on vehicles that are traded in. They ruin their customers credit and sometimes also their lives.

Robert Anglen, consumer reporter for the Arizona Republic, investigated dealerships in Arizona that ripped off consumers in multiple states, leaving them with faulty vehicles and stuck trying to make loan payments on two cars — even ones they had traded in, that were sold to someone else. Here’s what he found:

Read more: Arizona dealer didn’t pay off trades or transfer titles

How can you avoid become a victim of an unscrupulous auto dealer?  CARS tips for how to get a good deal on a safe, reliable used car, without having to set foot on a car dealer’s lot:  How to Buy a Used Car, Painlessly.

Truck from CarMax catches fire, nearly destroys home

Californian Anthony Santos’ house nearly burned down, after CarMax sold him an unrepaired, recalled, defective Ford F-150 truck that was prone to catching on fire. Before CarMax sold him the truck, Ford issued a safety recall, warning that the truck could short-circuit and cause a fire. But CarMax failed to take the truck to a Ford dealer for a free repair.

Making matters worse, CarMax also advertised that the truck passed its “125 point inspection.” But what good is an “inspection” that doesn’t catch safety recalls and get them fixed?

Mr. Santos hired a law firm to pursue justice against CarMax, under California state laws against fraud and other bad practices, aimed at protecting consumers from unscrupulous car dealers and other crooks. CarMax is evading responsibility and trying to foist off the blame on him.

Please help spread the word: Beware of CarMax. They sell dangerous cars and if the worst happens, they try to shift  the blame onto you.

Watch NBC Los Angeles news report about Mr. Santos and his flaming truck from CarMax.

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?