Hurricane Sandy Flood Cars Showing up on Used Car Lots

Posted on August 6, 2013 by admin

Ever wonder what happened to all those cars submerged in water from Hurricane Sandy? ABC News tracked one down — and found it in another state. What they found may surprise you.

ABC News report: Sandy Flood Cars

Dealer ordered to pay off loans on traded-in vehicles

Posted on June 7, 2013 by admin

In response to dozens of complaints from consumers who were stuck struggling to make payments on vehicles they had traded in, plus the cars they bought, Washington State’s Attorney General ordered dealerships owned by Mark Gilbert to pay off the liens on the traded-in vehicles.

Washington state law requires auto dealers to pay off the remaining balance consumers owe on traded-in vehicles within two days after they make a new purchase. Typically, the amount owed on the trade-in — known as “negative equity” — is added onto the price of the newly purchased car.

According to the Attorney General’s office, “The Walla Walla County Superior Court..entered a preliminary injunction, ordering several Northwest auto dealerships owned by Mark Gilbert to comply with Washington dealer and consumer protection laws, requiring prompt payoff of customers’ trade-in vehicles.”

The Attorney General’s legal case involved car dealerships Gilbert owned that sold new Honda, Jeep, Dodge, Chrysler, Nissan, and Ford vehicles.

How can you protect yourself from this scam? The safest thing to do is to wait to buy your next car until you have paid off the loan on the car you are currently driving. Otherwise, you risk having both cars repossessed if the dealer fails to pay off the loan on the car you trade in. Plus you sink deeper into debt. And — always insist on seeing the title to the car BEFORE you buy. If the dealer doesn’t have the title, the lender for the prior owner can repossess your newly purchased car — even if you are making all the payments in full and on time to your lender.

Washington State Attorney General Press Release

“check engine” light woes

Posted on April 23, 2013 by admin

You’re a smart consumer. So before you buy that used car, you take it for a test drive. You notice that there are no warning lights on the dashboard. You think everything is fine, and you buy the car.

But — shortly after you drive it home, the “check engine” light comes on. This spells trouble. BIG trouble. This scenario is playing out all over the country. It’s become a frequent complaint among used car buyers. “I just bought it and now the ‘check engine’ light is on.” Adding to the woes experienced by consumers who are victims of “check engine-itis” — the repairs to get that pesky light to go off can cost $3,000 — $4,000 or more.

Margie Y of Hawthorne, CA contacted CARS and said she bought a used Toyota for her daughter, as a present for her 21st birthday, from a local dealership. Within a day, the “check engine” light came on. Then the alternator blew up, and the car caught on fire. When she had the partly charred Toyota towed to a mechanic, he said it needed a new alternator, catalytic converter, and solenoid — at an estimated cost of over $2400. Money she didn’t have, since she had paid $6200 cash for the Flaming Toyota, and also traded in a vehicle that was running fine, plus had paid $300 for the tow.

Unfortunately, this story is all too familiar. So — what’s happening? According to automotive experts, unscrupulous dealers buy “scan tools” over the internet that allow them to simply wipe out the error codes that trigger the “check engine” light. Then they sell the car. As soon as it’s driven a short distance, the error codes register and — on goes the dashboard warning light. Some dealers don’t bother to buy the scan tools. They just disconnect the battery, erasing the error codes and getting the “check engine” light to go off just long enough to foist the car off onto an unsuspecting used car buyer.

Not only are the dealers cheating their customers, they’re also falsifying smog test results and polluting the air. They know that chances are good their customers won’t be able to pay for the expensive repairs, and will end up driving the car despite the fact it doesn’t meet emissions standards. The day of reckoning may come when the hapless consumer tries to register it, and it won’t pass the smog test. But by then, the dealer figures it will be too late for the consumer to take them to court.

What can you do to avoid becoming a victim of “check engine-itis”? The most effective single thing you can do is to insist on getting your own trusted mechanic to inspect the car before you buy. They should be able to detect the fact the error codes have been wiped clean, and also do a check of the emissions system that will turn up the problems. Where can you find a good, reliable mechanic? Car Talk’s Mechanics Files is a terrific resource, where you can find the best mechanics in your area, based on reviews written by their own customers.

Check Car Talk’s Mechanics Files to find a reliable mechanic — before you buy

Tell the seller that you want them to take the car to YOUR mechanic before you’ll agree to buy. If they balk at that, or try to talk you out of it, well, that’s why God gave you feet — so you can walk away from there. Pronto. There are plenty of good used cars for sale.You don’t need to get stuck with one that will cause you hassles and headaches.

Who needs car dealers?

Posted on February 19, 2013 by admin

If you want a new car, unless you are buying a Tesla, you are probably going to be forced to buy from a car dealer. That’s because car dealers in all 50 states have paid legislators handsomely to enact special franchise laws that give them monopolies over new car sales. This leaves new car buyers with little choice, but to buy from a dealer.

But used cars are another story. Each year, millions of American consumers buy and sell used cars directly to each other — without having to pay a middleman. Why is this kind of transaction so popular?

You can save thousands of dollars

You can avoid major headaches and hassles

You can get a newer, cleaner-running, safer, better vehicle — for the same amount of money you would have paid for an older, dirtier, less safe vehicle from a dealer.

According to the Better Business Bureau, year after year, auto dealers are the #1 source of consumer complaints to the BBB. So why go there?

The average dealership sales transaction takes approximately 4 hours, and is designed to wear you down and get you to the point where you will sign anything, just to get it over with and leave. Some consumers have been literally held hostage at dealerships that took the keys to their cars– supposedly to evaluate them as a trade-in — then refused to give them back — until they bought a car.

Common scams you can avoid when you buy from a private person —

Sales of unsafe, recalled vehicles — it seems incredible, but — the National Automobile Dealers Association has taken the official position that its dealer members should be able to sell you an unsafe, recalled used car that hasn’t been fixed. Even though the fix is FREE. In some cases, innocent, unsuspecting used car buyers have been maimed or killed in recalled vehicles sold to them by licensed dealers — who claim it’s not their responsibility if the car was under a recall.

“Yo-yo” financing — basically, bait and switch on the terms of the loan. You sign a contract with the dealer, that says you’re going to pay 4% or 5% interest. You leave a down payment and trade in your old car. You drive off the lot and everything seems fine. Then you get a call from the dealer telling you that you have to come back because the financing “fell through” — which is a lie. But if you refuse to return and sign a new contract to buy the car at, say, 16% interest, or give the dealer a bigger down payment, or both, the dealer threatens to repossess your car, or report it as stolen. The dealer refuses to give you back your down payment and traded-in vehicle, to trap you and keep you from being able to go elsewhere to buy.

Dealer “markups” — hidden kickbacks that increase the price of auto loans from car dealers, and cost consumers over $25.8 billion in a single year. Dealers get kickbacks from lenders, in exchange for raising the interest rate on your car loan beyond the rate you actually qualify to get. This extra charge is not based on risk, but on the dealer’s assessment of how much they can get away with charging you, after sizing you up, including checking out your profile in databases that have your personal information sliced and diced by literally hundreds of criteria.

Unsafe, Recalled Used Cars for Sale on Dealer Lots

Posted on February 4, 2013 by admin

Used car dealers across the nation persist in foisting off unsafe, recalled vehicles on an unsuspecting public. Motor vehicles rank among the most hazardous consumer products in the nation, in terms of fatalities, serious and debilitating injuries, and economic costs to our country.

Fortunately, car dealers are prohibited by federal law from selling or leasing NEW cars that are being recalled by the manufacturer. But unfortunately, there is no such law to protect USED car buyers.

Each year, about 40 million people purchase used cars. But the powerful auto dealer lobby — which received billions of taxpayer dollars during the Great Recession — has blocked attempts in Congress to protect used car buyers from unsafe, defective recalled cars being sold at dealerships.

News organizations have repeatedly identified this problem. In 2010, the non-partisan U.S. Government Accountability Office (GAO) recommended that Congress address the threat posed by unsafe, recalled used cars. But so far, Congress has failed to act. Auto dealers are not even required to report fatal or injury crashes involving recalled vehicles they sell to the public, to the National Highway Traffic Safety Administration.

CBS’ Early Show investigated sales of recalled, used cars and found unfixed, recalled cars on lots scattered across the country. When they asked if the cars were being recalled, sales personnel assured them that they wouldn’t have them for sale if they were being recalled. If only that were true.

According to CBS’ Early Show: “A dealer in Oklahoma sold Tabitha Gordon a used Durango in 2009. She was driving with her son, Kaden, when the lights, wipers and locks went haywire. Gordon said of the incident, “I felt like I was in a twilight zone. … The plastic that covers the speedometer had popped, and smoke started billowing into the vehicle.”

She managed to pull over and get Kaden out as the car caught on fire. [“Early Show” Consumer Correspondent Susan] Koeppen said it turns out Gordon was sold a car that had been recalled for an electrical defect. “We were told that it was safe and it would be a safe vehicle for our family,” Gordon said. “And it wasn’t, it was far from it.”

Watch video: CBS Early Show — Recalled Used Cars Up For Sale

Can you imagine how awful it would be, for your car to catch on fire, when you have your child strapped in a child safety seat in the back? What if you are driving with several children who are strapped in? Would you be able to get all of them out in time, before the car explodes?

Auto dealers complain that it’s too much bother for them to find out if a car is being recalled and get it fixed, before offering it for sale. They would rather risk your life, and your family’s safety, than take the time to call the manufacturer’s toll free number and check the car’s status, or visit the manufacturer’s website, online, and get the car fixed — for free.

CARS believes that even if you can’t afford a new car, or if you simply decide that a used car is a better deal, you and your family still deserve to be safe.

What can you to to protect yourself from unsafe, recalled used cars? When you find a car you like, NEVER take the car dealer’s word for it that the car does not have a safety recall pending. As reporters have repeatedly documented, car dealers are prone to lying about safety recalls, even if you ask them face-to-face about a specific car.

Instead, BEFORE you buy, do your own research. Note the Vehicle Identification Number (VIN), which is stamped on a small plate on the dashboard, visible through the windshield. Call the auto manufacturer’s toll-free number and ask if all the recall work has already been done. Or check the auto manufacturer’s website, under “safety recalls,” and enter the VIN. You can also contact a local dealership that sells that make of vehicle, and ask them to double-check for you. Since new car dealers get paid to do recall repairs on makes they sell, at least they have some incentive to tell you the truth.

Federal Trade Commission — private car sellers often give “more reliable information” than auto dealers

Posted on January 2, 2013 by admin

We now have an official answer to the age-old question: Are you more likely to be misled if you buy a car from a private individual or from a used car dealer? Obviously, dealers want you to buy from them — and these days, they are boasting about their record profits.

But — auto sales remain the leading cause of consumer complaints to state and local consumer protection agencies. Year after year, new and used car dealers also rank #1 among the most-complained about businesses, in terms of consumer complaints to the Better Business Bureau.

To top it all off, the leading federal consumer protection agency for America’s car buyers recently stated flat-out that you’re more likely to get accurate information about a used car’s history when you buy a car from another consumer, rather than a used car dealer.

Here’s what the Federal Trade Commission stated:

“The Commission concluded that the [Used Car] Rule should not extend to private or casual sellers of used cars because the record failed to support a finding that deceptive sales practices were prevalent in private sales. The Commission noted that in private sales, prospective customers often receive more reliable information about mechanical condition than they do from dealers…” **

** Federal Register, Vol. 77, No. 242, Dec. 17, 2012, pages 74761-74762.

Of course, you still have to be on the lookout for “curbstoners” — dealers masquerading as consumers. Be sure to insist on seeing the title and registration, and past work orders from repairs, and make sure that the names on the documents match the seller’s name.

And ALWAYS, ALWAYS insist on getting the car inspected by an independent, reliable, trustworthy mechanic / body shop of YOUR choosing, before you buy. A good place to find an expert to perform the inspection? Car Talk’s Mechanics Files.

It’s a good idea to also check the National Motor Vehicle Title Information System and other vehicle history services before you buy. The more you know, the better. NEVER trust a car dealer to tell you the truth about a car.

Twelve tips for consumers on how to buy a safe, reliable used car — without being cheated by a shady car dealer:

CARS’ Twelve Tips for Used Car Buyers

Happy, safe car buying and Happy New Year!

Buyer Beware: Auto dealers selling unsafe, recalled cars — without fixing them first

Posted on December 8, 2012 by admin

One of the reasons many car buyers purchase used cars from an auto dealer is to get a car that they think is safer. But are they really safe? Not necessarily. Each year, millions of used cars are sold, without the safety recall work being done. Many are being sold by so-called “reputable” auto dealers.

The harsh reality — dealers are prohibited from selling NEW cars that are under a safety recall, but are exploiting a loophole in federal law that allows them to sell USED cars that are under a safety recall, without fixing them first.

Their excuse? They don’t want to bother to take them out of service as loaner cars, or to another dealer, for FREE repairs. After all, that might cut into their profits or be inconvenient.

Never mind the fact they are putting their customers’ lives in jeopardy. And also creating a hazard for other motorists who share the road with the unsafe, recalled cars. This excuse is especially lame, since the repairs are FREE. By federal law, the auto manufacturers must pay for the repairs, in full.

According to a report issued by the non-partisan Government Accountability Office, car dealers’ sales of unrepaired, recalled cars is a serious problem that urgently needs to be addressed.

In the wake of the Toyota recall scandal, and in reaction to the GAO report, Congress attempted to require auto dealers to fix recalled used cars before selling them to the public. But under pressure from the powerful auto dealer lobby, that provision was stripped from the national auto safety bill that finally passed.

Tragically, unsafe, recalled cars continue to put unsuspecting car buyers and their families at risk. One investigation by highly respected consumer reporter Joe Ducey, Channel 15 in Arizona found dozens of recalled cars for sale on the lots of major auto dealers:

Cars with unrepaired safety recall issues sold from Valley car lots

Don’t fall prey to this dangerous scam. Be aware you can’t rely on auto dealers not to sell or rent an unsafe, recalled car. In fact, the powerful auto dealer lobby is actively pushing in Congress to keep on putting their customers’ lives in jeopardy. So far, they have prevailed.

Were you sold an unsafe, recalled car by a dealer? If so, CARS wants to hear from you. The only way this reckless policy will stop is when people like you speak up and the truth gets out.

Contact CARS

Meanwhile, here are 11 top tips from CARS, for how to buy a safe, reliable used car — without even having to step foot on a car dealer’s lot:

How to buy a safe, reliable used car — without getting ripped off

Buyer Beware: Flood cars from states hit by Hurricane Sandy

Posted on November 2, 2012 by admin

WARNING!!

Tens of thousands of flood cars that have been submerged in salt water, and contaminated by bacteria and various toxins, will soon start to appear all over the country, even in states far from the center of the storm. Flood cars are inherently unsafe, and pose a serious risk to anyone who drives them, rides in them, or even just comes into contact with them.

Flood cars are basically rotting from the inside out. The electronic / computer systems, which control everything including the brakes, engine, air bags, and other major safety systems, are hopelessly compromised and will inevitably corrode and fail, over time.

Bacteria, mold, and other contaminants can cause serious or fatal health problems, particularly among children and adults with asthma and people with allergies or compromised immune systems.

Tips for consumers — how to avoid flood car scams:

Be on the lookout for both new and used cars with tell-tale signs of having been submerged — musty smell or “over-perfumed,” silt in places like under carpeting, in the well where the spare is stored, or title histories indicating the car was in the flood area

Check federal database of total loss carsprior to purchase (this is the official website for the National Motor Vehicle Title Information System, established by the US Dept. of Justice, where insurers, self-insured entities, salvage pools (auctions), and junkyards in all 50 states MUST report all total loss vehicles, within 30 days — many report daily)

If the vehicle is relatively new, or still within the factory warranty period, get the VIN number and call the manufacturer to ask if they will honor the warranty — if it’s a flood car, they won’t honor the warranty, even if it’s new. Insist on getting confirmation in writing that the manufacturer will honor the warranty, before you buy.

Keep in mind that a “clean” title is not an indication the car is OK — many cars have had the titles “washed” to remove the “flood” car brand, and many states don’t even have a “flood” car designation. Plus some insurers have admitted routinely failing to properly brand titles — increasing the price the car can command at auction, by making it easier for unscrupulous sellers to hide the car’s checkered past. This is one reason NMVTIS is so valuable for consumers — total loss vehicles MUST be reported to NMVTIS, even if the titles have never been branded, or if they have been “washed.”

Get any car inspected by a trustworthy auto technician — for example, one who gets consistently high ratings in Car Talk’s Mechanics Files — before you buy

Test drive the car before you buy — be watchful for signs the car is hesitating, running rough, smells musty, has tell-tale signs of silt or premature rust in places where you wouldn’t expect to see rust

NEVER, EVER buy a car sight unseen, without an inspection and test drive. If you are interested in a car you found over the internet, buy locally and go check it out in person, in a safe, public place, during daylight hours. It the seller claims they are the owner, make sure they show you the work orders from the repairs they had performed, and confirm the name on the work orders matches the name on the registration and title.

Certified cars are a boondoggle

Posted on September 25, 2012 by admin

Is it worth it to pay extra to get a “certified” used car? In a word, NO. Auto manufacturers and dealers came up with the notion of “certified” cars to prop up the price of used cars, and increase their profits.

Basically, you are paying extra — an average of thousands of dollars more — just for the name “certified.” Keep in mind — the dealer who gives the car that “156-point” inspection has an obvious conflict of interest. Plus the manufacturer doesn’t actually do the inspection. If there’s a problem, the manufacturer will just point fingers at the dealer.

Some dealers have “certified” cars that were grossly unsafe.

For example, one dealer in Michigan sold a GM “certified” car that was actually two cars — a classic “chop job.” The front half of one wrecked car, welded onto the back half of another wrecked car. If the car was in even a minor collision, it would have split in two. GM and the dealer refused to give the buyers –who finally discovered they had been snookered — a refund.

Another dealer in Los Angeles sold a Mercedes that had been in a severe crash as a “certified” used car. The owner noticed that the tires were wearing unevenly. He took the car to have it aligned, and was stunned to hear that it wasn’t possible to get it into alignment because it had been so badly damaged the unibody was twisted out of shape. It was so unsafe, the repair shop told him not to drive it home, but to have it towed. When he confronted the dealer, the dealer refused to give him a refund. He finally sued, and eventually settled his case for a confidential amount.

Many “certified” cars are former rental cars or fleet vehicles that were driven hard and may be poorly maintained. Instead of being worth more than Blue Book, they are usually worth less. But dealers can get away with charging more for them by calling them “certified.”

Instead of paying thousands extra for a “certified” car, pay $100 to get your own, independent inspection. Do it BEFORE you buy. And save thousands of dollars.

Extended Service Contracts — Worth it, or not?

Posted on September 6, 2012 by admin

It’s hard to buy a car today, from a dealer, without having to pay $1000 or $2000 or more for a “service contract.” Some dealers pressure car buyers into these notoriously high-priced add-ons by telling them that if they don’t get the contract, the lender won’t approve their loan.

In some states, that is an unfair and deceptive trade practice. But it’s usually very difficult to prove.

What dealers won’t tell you is that they get hefty kickbacks from lenders, insurers, and other companies that sell service contracts, in exchange for selling them. A dealer may make more on the service contract than on the price of the car.

But are they a good deal for car buyers? According to Consumer Reports, based on the respected consumer magazine’s survey of 8,000 new-car buyers, the answer is NO.

Among the reasons service contracts tend to be a bad deal:

They often exempt coverage for pre-existing conditions, or items that are prone to break down.

They usually won’t cover prior damage, which gives the service contract company a convenient excuse to deny claims. If the car was in a wreck or flood, chances are the warranty will be partially or totally void.

Some dealers fail to forward the money you pay for the service contract. Instead, they pocket it and leave their customers in the lurch. It’s a very unwelcome surprise to find out that the coverage you thought you had — doesn’t even exist. Especially when you face an expensive repair. Even major franchised car dealerships have been caught engaging in this scam.

The products are overpriced. Based on loss/claims ratios, the charges are often outrageously high.

The contracts are written with many exclusions and limitations hidden in the fine print. Blown gasket? “Sorry — you can’t prove the used car you just bought had the oil changed every 3,000 miles. Claim denied.”

Some service contract companies have gone under, leaving both the consumers and dealerships holding the bag. Even some that were highly rated by “objective” ratings companies were actually a stack of cards. This has happened over and over again.

Bottom line: You’re usually better off spending $100 to get a reliable, independent auto technician to inspect the car BEFORE you buy, rather than spending an extra $1000- $2000 for a worthless contract that is loaded with loopholes.

Consumer Reports “Extended warranties: a high-priced gamble”

Old Tire Blows Out, Puts Teen Driver at Risk

Posted on August 21, 2012 by admin

You could tell the father was upset, when he called CARS recently. He had purchased a 2005 Ford Excursion from a major franchised car dealership in Southern California. He checked the tires, and they had plenty of tread left, so he thought they were fine. They also looked nice and new.

But when his 16-year-old daughter drove the Excursion, one of the tires blew out. She almost lost control of the car, on a busy highway. She had barely started to learn to drive. and the experience was quite traumatic for her. Had she been driving faster, she might have lost control and crashed.

Her father had the car towed to a reputable tire shop. They informed him that the tires, which appeared to be nearly new, were in fact 10 years old. They had deteriorated to the point where the rubber was likely to crumble, when they heated up. All 4 tires had to be replaced.

When he confronted the dealer, at first the dealer refused to replace the tires. Then it tried to pressure him into paying half the replacement cost. It was only after he stood his ground and persisted that they reluctantly agreed to pay for four new tires.

Now he’s more wary, and will insist on checking the numbers on the tires before he agrees to have them installed on the Excursion.

The National Highway Traffic Safety Administration (NHTSA) estimates that 400 fatalities a year may have been attributed to tire failures.

Some experts recommend that you avoid tires that are 6 years or older. Even tires that have never been sold before and appear to be “brand new” might actually be old, after sitting on a warehouse shelf for years. To be safe, look for the DOT number on the inside of the tire tread. The last 4 digits are the month and year of manufacture. If the tires are more than 6 years old, it’s safest to avoid them.

NHTSA FAQs about the perils of aging tires

What if the dealer sells you a junker “AS IS”?

Posted on July 28, 2012 by admin

It happens all too often. It’s one of the most frequent complaints CARS gets. Consumers buy used cars that break down right away. Some don’t even make it home.

For instance — an 18-year-old high school graduate in Davis, CA bought his first car from a dealer in Roseville. He asked the salesman about its history and condition. The salesman repeatedly assured him it was in good working condition. He needed a car so he could start a new job and attend college in Sacramento. He agreed to pay the dealer about $5000. But when he tried to drive his newly purchased car home that night, the headlights stopped working about 5 miles from the dealership. Then the car stalled –while he was driving on the freeway, in traffic. He managed to get it to the side of the road. Then it wouldn’t re-start. He was stranded there, with trucks and other vehicles whizzing by, until his mother got out of work and gave him a ride home.

The next day, he called the dealer and tried to get a refund. The dealer refused, pointing out the car was sold “AS IS. He had the car towed to an auto repair shop. There, the service manager told him that it was plagued by many expensive problems, and would need a new engine simply to be driveable. He couldn’t afford to pay for the repairs, and keep making the payments, to avoid having a repossession on his record. He eventually donated the car to a charity, and instead of going to college, joined the Marines.

But according to some legal experts, he may have been able to get a complete refund if he had sued the dealer in small claims court. While the car was sold “AS IS,” he might have been able to prove that the dealer knew or should have known the car was seriously defective, and concealed that information from him.

Faced with similar situations, some consumers have sued shady dealers in small claims court, and been awarded complete refunds, or reimbursements for repairs.

If you have sued an unscrupulous dealer in small claims court, and won, CARS would like to hear from you, and share information about how you did it with other consumers. How did you overcome the dealer’s claim that the car was sold “AS IS”? Did you find an expert who was willing to testify on your behalf? How did you prepare for the trial? How long did it take? We’d love to hear from you!

Yes, I won! Contact CARS

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Category Archives: Used Car Scams