Monthly Archives: September 2013

Honda announces new safety recall of popular Odyssey and Acura models

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Honda announced it’s recalling 318,000 Odyssey minivans in the U.S. and 63,400 Acura MDX sport-utility vehicles in several nations because the air bags could deploy unnecessarily, due to electrical interference with a computer chip.

Honda acknowledged it had received complaints from owners of 2003 and 2004 model year Odyssey minivans and 2003 Acura MDX sport-utility vehicles, after the air bags popped open while they were just driving along.

Honda said that owners of the recalled vehicles should take them to Honda dealers, where technicians will install an “electrical noise filter.”

Caution:  If you are shopping for a used car, you cannot rely on the dealer to ensure that the safety recall repairs have been performed.  Auto dealers are actively opposing legislation that would require them to fix unsafe, recalled vehicles prior to renting, selling, or loaning them to unsuspecting consumers.

Read more: Dealers play unsafe, recalled used car roulette

 

 

Car dealers block Tesla from competing in Texas

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Electric car manufacturer Tesla won raves from Consumer Reports. It snagged Car & Driver’s Car of the Year award. It earned top marks from the National Highway Traffic Safety Administration in crash test results. Plus — the company inspires loyalty among its customers bordering on fanaticism. So who could possibly want to block it from selling its cars?

Car dealers. In a remarkable culture clash, the new-age California-based company is being hammered by politically connected mega-dealers accustomed to padding their profits by engaging in a whole range of shady practices that harken back to horse-trading days.

In the latest skirmish, auto dealers succeeded in barring Tesla from being able to sell its popular cars in one of the nation’s largest car markets — the state of Texas.

One interesting analysis of Why Tesla lost the battle to car dealers in Texas

Car dealerships — fertile ground for ID thieves

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How common is identity theft at auto dealerships?  According to a report in Automotive News, “Dealerships are targets for identity thieves — those working from both the inside and outside.” *  The report quotes Dave Robertson, executive director of the Association of Finance and Insurance Professionals:

“It’s still a major problem, but it’s not growing as fast.”

The report also quotes Maryann McKessy, Chief of the Fraud and Identity Theft Bureau of the Maricopa County Attorney’s Office, regarding auto dealerships:

“I hate to say it, but it’s a pretty common ground where information is breached.”

The FTC has issued “Red Flag” rules to try to curb identity theft at auto dealerships and among other creditors who handle people’s personal financial information. Dealers are being urged to train their employees to be on the lookout for identity thieves, including checking to see if the person in front of them looks like the photo on their driver’s license.

* Automotive News, Dec. 5, 2011

 

 

Car title loans — who pays, who makes a killing?

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High-cost car title loans are illegal in most states. That’s because they’re so risky for borrowers, often ruining lives. Particularly when people lose their cars — usually their only way to get to work — and then their jobs.

In 2004, in response to a two-part series of front-page reports by David Lazarus in the San Francisco Chronicle, exposing the seedy but growing car title lending business, California legislators vowed to put a stop to title loans.  Fast-forward almost a decade, and what’s changed?  Nothing — except the shady, predatory businesses continue to expand and cost more consumers triple-digit interest, and often their vehicles.

How high is the default rate for car title loans? At a hearing before the California Assembly Banking Committee, Oscar Rodriguez, CEO of LoanMart, testified on behalf of the leading trade association for car title lenders operating in California.  When asked, point-blank, he admitted that while some lenders have default rates of 14-15%, others have rates up to 40-50%. This is astronomical, and powerful evidence that the loans are predatory — not designed to aid the borrowers, but to strip them of their only valuable material possession — their car.

California caps the interest rate on some loans below $2500. So title lenders skirt the law by talking consumers who seek smaller loans into getting loans over the $2500 threshold. Consumers naturally assume that must mean that they qualify to borrow more, based on their income or creditworthiness. In reality, their credit has nothing to do with the loan amount. As long as the lender can seize their car, and it’s worth much more than the loan, there’s no risk for the lender.  Of course, the bigger loan increases the risk for the borrower.

As the Attorney General of Florida warns: “Remember that a title loan is not risky for the lender but it may be very risky for you.”  How to protect yourself: title loans

So who benefits from car title lending? Award-winning journalist Gary Rivlin’s portrait of who’s living high off the hog thanks to high-cost loans, including car-title loans:

Portrait of a Subprime Lender

What can you do to avoid the car title lending trap?  If at all possible, save up instead of getting a loan. If that’s not possible, find other, less-risky ways to borrow money.  Some lower-risk options: Join a credit union. Seek loans from family members. Sell your car and buy a less-expensive one. Usually, you’re much better off selling it yourself than having it repossessed by a car title lender.

Read more:

Auto-title loans drawing scrutiny — Sacramento Bee, by Personal Finance Columnist Claudia Buck

‘Car-title loans’ a road to deep debt  — San Francisco Chronicle, by Business Reporter Carolyn Said

How to protect yourself: title loans — What else can you do in a pinch, that’s less risky? Advice from Florida’s Attorney General

 

 

 

Ford recalls 370,000 sedans over possible steering loss

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Ford Motor Co. announced it is recalling about 370,000 Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Cars produced between 2005 through 2011 because corrosion could cause a loss of steering. The safety recall includes about 355,000 vehicles in the U.S. and another 15,000 in Canada.

The recall is focused on vehicles in 22 states and Washington, DC, and includes about 195,000 Crown Victoria police cars.

The National Highway Traffic Safety Administration had been investigating multiple complaints about steering loss in 2005-2008 Crown Victoria cars outfitted for use by police.

Ford said owners in other states, who may not receive notice of the recall in the mail, could take their vehicles to Ford dealers for a check-up, and, if necessary, the cars would be repaired at no cost to the consumers. Federal law requires auto manufacturers to provide auto safety recall repairs at no cost to the owners.

Unfortunately, if the vehicles are owned by new or used car dealers who do not have a Ford franchise, they may not  be repaired before they are rented, sold, or loaned to unsuspecting used car buyers.  Auto dealers are fighting attempts in Washington, DC and Sacramento to help ensure that dealers have the safety recall repairs performed — for FREE — before they foist them off on their customers.

Did a dealer sell you an unsafe, recalled used car? If they did, CARS wants to hear from you — here’s where to contact CARS.

Read more:

NY Times report: Ford announces safety recall

Car dealers oppose having to fix unsafe, recalled used cars