Tag Archives: car dealers

Buy a car – surrender your rights?

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One more reason not to buy a car from a car dealer:  when you do, they force you to give up your right to sue them if they cheat you.  So say good-bye to being able to take advantage of consumer protection laws.

Think a dealer wouldn’t dare roll back the odometer? Think again. They just slip a clause in your contract that says you can’t sue. Then when you find out your low-mileage car actually has over 100,000 extra miles that “disappeared” from the odometer — good luck trying to sue them under the Federal Odometer Act.

Car dealers used to face tough sanctions, including punitive damages, for ripping off consumers. But with rare exceptions, those days are gone.  That’s because car dealers insert “arbitration” clauses into their contracts. Then, after you’ve been shopping, test-driving cars, and negotiating for an average of 4 hours, they shove a stack of documents across a desk and tell you to “sign here, here and here.”

What they don’t tell you is that when you sign, you are giving up your rights under state and federal consumer protection laws. So forget hauling them before a judge or jury, who can throw the book at them. Instead, if you get any hearing at all, it’s before an “arbitrator” whose company just happens to be paid by — you guessed it — the dealer.

Under rulings by the Republican majority on the U.S. Supreme Court, this is perfectly legal.

Ironically, the dealers got a special exemption from Congress that allows them to sue anyone they please. They’re free to use the courts. But you can’t.

Evidence is mounting about how biased and unfair arbitration is. Check out this new report, issued by the Consumer Financial Protection Bureau. No wonder car dealers HATE this consumer watchdog agency. It shows how rigged the game is, when you buy a car from a dealer:

Consumer Financial Protection Bureau report

Don’t end up like Jon Perz, who has been waiting over 7 years for justice, after a car dealer in San Diego sold him an unsafe car.

YouTube Video of used car nightmare — over 1.3 million views

Be a smart shopper. Check out CARS’ car-buying tips for how to get a safe, reliable used car — without having the hassle or risk of buying from a dealer:

CARS Used Car Buying Tips

Happy, safe car shopping!

 

 

 

 

 

 

 

 

Used car buyers have friends in the White House in auto safety battle

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America’s used car buyers and our nation’s roads will be a lot safer if the Obama Administration wins the battle against shady car dealers who sell unsafe, recalled cars to used car buyers.

U.S. Secretary of Transportation Anthony Foxx and the Administrator of the National Highway Traffic Safety Administration, Dr. Mark Rosekind, are urging Congress to make it illegal for car dealers to sell unsafe, recalled used cars to consumers.

They joined the President of Consumers for Auto Reliability and Safety at a press conference in Richmond, VA, along with representatives of Hertz, Enterprise, and Avis, and the American Car Rental Association, who have been working together with CARS to enact federal rental car safety legislation. Auto manufacturers (except GM) and car dealers are blocking the rental car safety bill, and lobbying Congress to weaken protections for America’s car buyers.

It is historic for a President and his safety team to call for people who rent cars, or purchase used cars, to have the same level of protection as new car buyers. Under federal law, it is illegal for car dealers to sell recalled cars with lethal safety defects to NEW car buyers. That has been the law since the 1960’s. But there is no similar federal law to protect people who rent cars or purchase used cars.

“What we need now is for Congress to step up, and to make renting or selling a recalled vehicle [to a consumer] illegal,” said Secretary Foxx.

Read more: US DOT safety recall news

Are car dealers providing unsafe loaner cars to owners of recalled cars?

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U.S. Senators, like Sen. Bill Nelson of Florida, have been urging Honda and Toyota and their dealers to provide loaner cars to customers with faulty Takata air bags, while they wait for repair parts to become available. Sounds like a good idea, right?

But — new car dealers have been vehemently opposing attempts to stop them from loaning out cars that have the exact same safety defects, or different defects, that have triggered a federal safety recall.

So — if you turn in your recalled Honda or Toyota at a Honda or Toyota dealership, and they hand you the keys to a loaner car, is it guaranteed to be any safer? NO!!!!

Here’s video of lobbyists for the new car dealers and CarMax opposing legislation in California that would have prohibited them from renting, selling or loaning unsafe, recalled used cars to consumers:

Car dealer lobbyists oppose safety bill in California

 

 

One more reason NOT to buy a car from a car dealer

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Even the auto dealers themselves have to admit:  many car buyers dread buying cars from auto dealers. Young people are especially wary.  And for good reason.

Car dealers keep selling unsafe, recalled used cars to consumers, putting them, their friends and family, and other motorists at risk of death or serious, debilitating injuries.

And as if that weren’t bad enough, they also insist that you surrender your Constitutional rights as part of the price of buying a car from them.

Good luck trying to buy a car from a dealer without a “gotcha” clause hidden in the contract that says you give up your Constitutional right to take them to court, and benefit from  our nation’s hard-won consumer protection laws. Like laws against rolling back odometers, selling “junk” cars that are advertised as being “in mint condition,” or engaging in other forms of cheating, lying, fraud, and thievery.

And get this:  the dealers got a special exemption from Congress — just for car dealers —  that allows them to keep THEIR Constitutional rights. So they can take anyone they want to court, and use the laws that benefit THEM. But they killed a bill that would have protected YOU from losing your rights when you sign on the dotted line to buy a car from them.

If you’re fed up with car dealers and their scams, check this out:

Cleveland Plain Dealer: Arbitration: What you don’t know about fine print can hurt you

And let your local car dealers know you’re not buying from them until they clean up their act, and you don’t have to surrender your rights to buy a car from them.

ABC 30 investigation finds dangerous recalled cars for sale on dealer lots

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“A record number of vehicles are getting recalled this year. Car makers have pulled about one of every five vehicles on the road, 58 million of them. But many of the potentially dangerous cars are hiding in plain sight on used car lots here in the [Central] Valley.

The truth is: they’re all over the place, and you may never know it until it’s too late.”

ABC 30 investigation finds dangerous recalled cars for sale on dealer lots

 

Senator Elizabeth Warren: Close the Car Dealer Loophole

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Should auto dealers, who write tens of billions of dollars in auto lending contracts each year, evade regulation by the nation’s leading agency for policing consumer financing?

US Senator Elizabeth Warren recently made it clear that she thinks the answer is NO.  While questioning Richard Cordray, Director of the Consumer Financial Protection Bureau, who was testifying before the US Senate Banking Committee, Sen. Warren offered this opinion:

“As you know, the CFPB has authority over nearly every kind of consumer loan, but the big exception is car loans. The CFPB has done great work in this area [focusing on lenders, but not dealers]…But it makes no sense to me that there should be any exception here for consumers who are being tricked out of billions of dollars every year on car loans.”

Sen. Warren conceived of the idea of an independent consumer financial watchdog agency, and worked hard to make it a reality.  During the debate over whether to include auto dealers, they misled members of Congress and the public, repeatedly claiming they are “Main Street, not Wall Street.”

However, the reality is quite different. Hundreds of dealerships are owned by large, publicly traded dealership groups that are publicly traded and sold on Wall Street.  For example, AutoNation, based in Florida, owns 221 dealerships across the U.S. and took in over $15.6 billion last year.  AutoNation’s largest investor is Bill Gates.

Does anyone seriously believe that fits the description of “Main Street”?

Read more: Warren: Close CFPB’s dealer ‘loophole’

 

 

 

 

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

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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 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

 

 

Don’t become a victim of identify theft when you shop for a car

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Imagine handing over your personal financial information, including your home address, Social Security number, birth date, and amount you earn each month, to a dealership finance manager who just happens to have a history of engaging in identity theft. Creepy, no?

Unfortunately, some dealers fail to do even basic background checks of prospective employees. As a result, you may end up exposed to identity theft. The FTC has issued “Red Flag” rules aimed at curbing ID theft at auto dealerships, which is a step forward, but — they don’t have the staff or resources to police compliance.

Bottom line:  This is yet another reason to ALWAYS get your financing lined up with a reputable lender BEFORE you shop for a car.

Read more:

Yahoo News report: Could you be a victim of identity theft while shopping for a new car?

Orange County, CA District Attorney busts major new car dealership

KC TV 5: Car dealer facing ID theft charges

F & I  News: Tampa dealer convicted of identity theft, other charges

 

 

Car dealers: “no love for liberals”

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Keith Crain, publisher of Automotive News, the auto industry’s leading trade publication, knows the auto industry inside out. His response to auto dealers’ vitriolic reaction to Hillary Clinton’s being invited to address the National Automobile Dealers Association:

“If anyone doubted that Hillary Clinton is a polarizing figure, all he had to do was look at the brouhaha caused by the National Automobile Dealers Association’s selection of her as a keynote speaker at its convention next year in New Orleans…

The episode did demonstrate that the American new-vehicle dealer, who I’ve always felt is the last of the entrepreneurs in North America, basically has no love for liberals…”

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

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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