CarMax sells unsafe, recalled used cars

CarMax advertises that each vehicle they offer for sale must pass a rigorous 125+ point inspection. But — does that include ensuring that safety recall repairs have been performed? The answer may surprise you.

Check out this recent news report:

WFMY-TV: Consumer Groups Warn CarMax Has Misleading Ads

Bottom line:  Don’t get snookered by those CarMax ads claiming that all their cars are “CarMax Quality Certified” and passed a “125+ point” inspection.  Unless you don’t mind the fact it could be a certified 125+ point ticking time bomb.

Did CarMax sell you a recalled used car? CARS wants to hear your story. Here’s how to get in touch:

Contact CARS

P.S. Even if you think your CarMax car is safe, it’s a good idea to check the manufacturer’s website for safety recalls, and enter in your car’s Vehicle Identification Number (VIN).

Odometer fraud — the “Fountain of Youth” for high-mileage cars

A lot of people think that odometer fraud is a thing of the past, thanks to digital odometers. Unfortunately, that’s just wishful thinking. In reality — crooks have found ways to hack into vehicle computer systems and re-set odometers. All it takes is a simple gadget that you can buy online — and a lack of scruples.

Making matters worse:  thanks to incredibly stupid rules the National Highway Traffic Safety Administration issued years ago under the Federal Odometer Act, vehicles more than 10 years old are exempt from key provisions of the law. That never did make sense, since all it does is encourage fraud that hits low-income used car buyers the hardest. It makes even less sense now, when RL Polk says that the average age of all light vehicles on the road in the US has hit a record 11.4 years.

One of the worst things about odometer fraud:  an altered odometer can make the warranty void, or make any service contract you buy with the car worthless and void.

According to AOL Autos, a New York man was alerted by friends that his used car miraculously showed less mileage after he sold it on Craigslist:

http://autos.aol.com/article/buying-used-car-tips-odometer-fraud/

How can you avoid getting scammed by an odometer fraudster?

1. Insist on seeing the work orders showing past repairs — and look carefully at the mileage.

2. Call repair shops that worked on the car and are listed on the work orders to confirm the numbers.

3. Have the vehicle inspected by your own independent auto expert BEFORE you agree to buy it. They can hook it up to diagnostic equipment that will access the onboard computer systems — which may reveal telltale records of higher mileage.

Here’s a good place to find a good mechanic:

Car Talk Mechanics Files

 

 

 

 

 

Car dealerships — fertile ground for ID thieves

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

 

 

New car dealers’ hidden ties to “buy-here, pay-here” dealerships

New car dealers like to project the image that they are above engaging in shady practices prevalent at “buy-here pay here” auto dealerships. Among the shameful litany: charging exorbitant interest rates and selling junk cars  that break down soon after purchase, only to be repossessed when the hapless owners can’t drive them, lose income, and fall behind on payments. Then re-selling the same cars over and over again — a practice known as “churning”  —  making a killing on each transaction, and often trapping multiple consumers into paying for the same car.

“Buy-here, pay-here” sales tactics were painstakingly documented in an award-winning series by Los Angeles Times reporter Ken Bensinger, who examined over 2 million records and exposed who the worst “churners” are among “buy-here, pay-here” dealers in California.

But — the reality is that thousands of new car dealers own “buy-here, pay-here” car lots. According to Automotive News, of 20,000 members of the National Independent Automobile Dealers Association, ” ‘just under 10%’ are franchised new-car dealers who have joined under their franchised dealership name or under the names of their separate buy-here, pay-here operations.” — Automotive News, July 22, 2013

Sales of service contracts pad auto dealer profits

High-cost service contracts are major profit centers for auto dealers.  One dealer told Automotive News that in 2005 his gross profit per extended service contract was $436.  By the end of last year, it had skyrocketed to $1,178.  (Automotive News, March 11, 2013)

Consumers anxious to avoid unexpected, costly repairs often buy them without realizing they are usually full of loopholes and exclusions that allow companies to deny coverage. For example, they usually fail to cover prior damage, even if that’s the cause of the problem.

Some auto dealers pressure their finance managers to meet a quota of service contract sales, or be fired. Others have tried to sell service contracts at lower, more competitive prices, but then faced litigation by the companies that offer them.

Some dealers mislead car buyers into thinking that they have to buy a service contract in order to get financing. Legal experts say that such deception is illegal, but can be difficult to prove.

CARS recommends that, instead of getting a service contract, it’s smarter to spend about $000 for a thorough inspection before you buy.  Then if the car has major problems, you can decide if you still want it, or take your business somewhere else.  Also — beware of dealers who try to sell you service contracts that kick in at the same time as the warranty, and expire just when you might need them.

 

Car dealership service departments “hostile to women”

According to a study commissioned by the National Automobile Dealers Association, women hold only 21% of all dealership positions. Women account for even fewer service advisor positions, at 16%, and just 6% of service managers.

The  president of the consulting firm that conducted the study, DeltaTrends, explained that dealership “service departments can have a culture that’s ‘frankly hostile toward women.’ ” — Automotive News, May 6, 2013