ABC 30 investigation finds dangerous
recalled cars for sale on dealer lots
Channel 30 (ABC) Fresno
November 17, 2014
by Corin Hoggard
"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 Valley.
The truth is: they're all over the place, and you may never know it until it's too late."
See video:
ABC 30 News investigation finds dangerous recalled cars on dealer lots
CarMax -- caught on Camera AGAIN selling unsafe, recalled cars
An undercover investigation by WSB-TV in Atlanta, GA found CarMax is still selling unsafe, recalled cars -- while claiming they take care of safety recalls.
Instead of cleaning up their act, and ensuring the cars they sell are safe, CarMax says they plan to keep leaving it up to car buyers to get the safety recall repairs done -- AFTER they buy the car. For millions of recalled cars, it could take months before repair parts are available, and meanwhile CarMax customers will be stuck driving ticking time bombs.
Watch video:
WSB-TV report: CarMax under Fire over Recall Policy
Advocates call for national Takata air bag recall
USA Today
October 23, 2014
by Chris Woodyard
"As the government issued urgent warnings about Takata air bags, safety activists and a couple of U.S. senators questioned whether millions of other drivers have been left in danger.
That's because the recalls and free repairs by 10 automakers for the potentially deadly air bags are regional, applying only to cars sold or registered in humid areas such as Florida and the Gulf Coast.
On Monday, National Highway Traffic Safety Administration said owners of the cars in Hawaii, Florida and several U.S. territories were at greatest risk. When the notice was expanded Wednesday, the agency added in Texas, Alabama, Mississippi, Georgia, Louisiana, a total of 7.78 million....
A safety activist also pointed out that where a car is registered and where it spends substantial amounts of time may be different. "Cars move, people move and it doesn't make sense to assume the car will stay in the same place," says Rosemary Shahan, president of Consumers for Auto Reliability and Safety in Sacramento, Calif. "We are a very mobile society. You have all these snowbirds that go to winter in Florida."
Although most cars equipped with Takata air bags have been under recall for months or even years, the government's warning this week stemmed from tests that showed the passenger side air bag inflators were particularly prone to failure -- causing the bags to spew metal and plastic debris like shrapnel when they deploy -- in very humid climates."
Read more:
USA Today: Advocates call for national Takata air bag recall
Massachusetts Dept. of Transportation Guardrail Replacement Program Faulted
The Boston Herald
October 22, 2014
by Marie Szaniszlo
"The state Department of Transportation is waiting for crashes or other damage to replace caps on the ends of guardrails on many state roads, a spokesman said, even as federal officials are ordering new tests in the wake of a lawsuit that questioned their safety....
Critics say the caps, manufactured by Dallas-based Trinity Highway Products, can cause the tips of guardrails to impale cars, rather than collapsing and cushioning the impact when hit head-on....
Rosemary Shahan, founder of Consumers for Auto Reliability and Safety, said that while MassDOT deserves credit for its moratorium on further installations of ET-Plus parts, it should also be taking steps to ensure that existing caps are safe. 'The fact that (ET-Plus caps) are commonly in use across the country doesn’t make them safe,' Shahan said."
Read more:
Boston Herald: MA Guardrail Replacement Faulted
CarMax Under Fire for Selling Recalled Cars
Call Kurtis Investigates
KOVR-TV (CBS) Channel 13, Sacramento
September 30, 2014
By Kurtis Ming
Angela Davidson says she was sold when the CarMax sales associate told her the 2010 Dodge Ram she was looking to buy passed the company's 125+ point inspection. Days later, when she called Dodge for help pairing her cellphone to the truck, she was surprised to learn it had an unfixed recall over a rear axle issue.
See full report:
KOVR-TV: CarMax Under Fire for Selling Recalled Cars
Protesters Urge CarMax to Stop Selling
Recalled Cars
FOX-TV Channel 40, Sacramento
September 30, 2014
By Zhoreen Adamjee
Under current federal law, it's illegal to sell new cars if they're recalled. But when it comes to used cars, it's legal.....Davidson is still frustrated that CarMax sold her a recalled vehicle. When she bought the car, she said she didn't know Chrysler had issued a safety recall on the car last year for an issue with the rear axle. She says she wouldn't have bought the car had she known. 'They led us to believe that this truck was safe, when it wasn't. They let us drive off the lot with an open recall on it,' Davidson said.
See full report:
FOX-40 : Protesters Urge CarMax to Stop Selling Recalled Cars
U.S. Auto Sales Seeing Big Surge
The Sacramento Bee / McClatchy Washington Bureau
August 28, 2014
by Kevin G. Hall
"Four-year car loans used to be the norm, which then became five-year loans. From April through June of this year, 41 percent of new-car loans were for financing largely about six years, according to data from the credit analysis firm Experian.
About 14 percent of used car loans were for periods between six and seven years, the Experian data shows.
“A lot of times the car dies long before they can pay off the loan, or there is an expensive repair that they can’t afford, so they trade it in,” said Rosemary Shahan, the president of the California-based consumer advocacy group Consumers for Auto Reliability and Safety.
“The loans are disproportionate to the value of the car. The car is a depreciating asset, and it is going to be worth even less as time goes on, and that negative equity gets rolled into the next loan.”
The long-term loans could result in snowballing debt."
Read more:
Sacramento Bee: U.S. Auto sales seeing big surge
How to Check if Your Car Was Recalled
But Not Fixed
Los Angeles Times
August 20, 2014
By Jerry Hirsch
"Car owners and buyers will be able to look up whether a vehicle has been recalled and fixed under a new federal program launched late Tuesday.
The National Highway Traffic Safety Administration has developed an online search tool where drivers can find out if a specific car has been recalled and why. The car companies will have to provide at least 15 years of data for the tool, at
http://www.safercar.gov, and update their information every seven days....
"I am encouraging consumers to check it out before they buy a used car from anybody - a private party or a dealer," Shahan said. But the program has gaps that will continue to keep unrepaired cars on the road, she said. The information is only in English and it is only available online, she noted. If people speak a different language or don't have a computer or smartphone, they won't be able to research a car's recall history."
Read more:
Los Angeles Times: How to Check if Your Car Was Recalled But Not Fixed
Regulators Fine Hyundai $17.4 Million After It Is Slow to Report Defect
New York Times
August 7, 2014
By Danielle Ivory
Christopher Jensen contributed to this report
"Federal auto regulators on Thursday imposed a nearly $17.4 million penalty on Hyundai because it did not promptly report to the public a safety defect that affected braking in its cars.
Sometime in 2012, Hyundai was informed that the brake fluid used in some Genesis cars from the 2009-12 model years would not sufficiently inhibit corrosion and might cause the brakes to stop working properly. Yet Hyundai did not recall the vehicles until October 2013....
"Hyundai failed to act to protect their customers and others that were harmed in an accident, and must change the way they deal with all safety-related defects," said David J. Friedman, the agency’s acting administrator...
As part of its agreement with the safety agency, Hyundai will make changes to its safety practices, including allowing its American unit to make decisions about recalls without approval from the parent company in South Korea.
Rosemary Shahan, president of Consumers for Auto Reliability and Safety, said that provision may be a result of regulators being "under more scrutiny than ever before," but that it was a welcome surprise.
"I hope it’s a trend," she said."
Read more:
New York Times: "Regulators Fine Hyundai $17.4 million After It is Slow to Report Defect"
GM Resists Expanding Victims' Fund
New York Times
July 19, 2014
By Danielle Ivory and Rebecca R. Ruiz
"The cars are different, but the circumstances surrounding their recall are strikingly similar. The ignition switch would suddenly shut off, drivers complained...GM then quietly fixed the switch, without removing the faulty parts from circulation. And for more than a decade there was no recall. Yet GM maintains that a distinct difference exists between its recall of 2.6 million older Chevrolet Cobalts and other cars, which started in February, and its more recent recall of 7.6 million cars like the Chevrolet Malibu... it has refused to expand a fund set up to compensate victims of the defective Cobalts -- infuriating safety advocates....
Rosemary Shahan, president of Consumers for Auto Reliability and Safety, an advocacy group, saw little difference. 'The basic problem is that G.M. made a lot of ignitions that make cars prone to die in traffic, and that’s dangerous,” she said. As for the compensation program, she said: “It should cover everybody injured by a G.M. product. Why is it limited now, just because this is a defect with the most notoriety? Where’s the justice in that?' "
Read more:
NY Times: GM Resists expanding victims fund
Honda Asking Buyers to Sign Liability Document
AOL Autos
July 31, 2014
By Pete Bigelow
Honda "recently started disclosing possible recalls related to airbag malfunctions in certain vehicles. Honda is asking customers buying those used cars to sign a document that acknowledges they've been made aware of the issue. Buyers may be better informed, but such a signature could also shift liability away from the automaker....Starting in 2001, several automakers have issued more than 20 separate recalls for millions of these airbags, which are manufactured by global supplier Takata. Exploding airbags are responsible for at least two deaths in the US, and scores of injuries....
"I think this form of disclosure is probably worse than nothing," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety. "They're taking advantage of the fact the consumer doesn't expect a Honda dealer to hook them into such a risky car. ... The reality is that it will be in a stack of papers that a customer is signing hours into the buying process."
Read more:
AOL Autos Honda asking buyers to sign liability document
Used Cars Are The Next Front In The War Over Recall Repairs
Forbes
July 31, 2014
By Jim Henry
With a record number of recalls in the headlines, led by the
General Motors ignition switch recalls, the
New York City Department of Consumer Affairs took it upon itself to enforce a city statute the city interprets as a ban on selling used cars that are subject to a recall without performing the recall work. “More cars have been recalled in 2014 than any other year on record,” said
Commissioner Julie Menin of the Consumer Affairs Department, in a written statement earlier this week. “We’re not going to wait for tragic statistics to demand that dealers repair these ticking time bombs,” she said. The city this week announced it sent subpoenas to 200 used-car dealerships, around 25 percent of all dealers in New York City....
New Yorkers are not alone in worrying whether recall repair work actually gets accomplished, and who’s responsible for making sure it does. The question is also at the top of the agenda this year for other public- and private-sector consumer advocacy groups around the country, such as
Consumers for Auto Reliability and Safety, Sacramento, Calif., according to Rosemary Shahan, president. CARS is petitioning regulators like the
Federal Trade Commission to prohibit retailers from selling used cars without performing recall-related work.
Read more:
Forbes - Used Cars Are The Next Front In The War Over Recall Repairs
GM backs revised bill to bar use of
unrepaired recalled rental cars
Detroit News
July 16, 2014
By David Shepardson
Washington - General Motors Co. said Wednesday it will back legislation that will require rental car companies to repair recalled rental cars before they are sold or rented — becoming the first automaker to do so.
The Detroit automaker told Sen. Charles Schumer, D-N.Y., in a letter that it would back legislation - which has won the support of major rental car companies — if it won minor changes.
"When buying or renting a car, the last thing we should worry about is if the car is defective or recalled,” Schumer said. “I thank General Motors for endorsing our common sense legislation and hope it opens the door for more car manufacturers to do the right thing and support our bill to keep consumers safe.”
Read more:
Detroit News: GM backs rental car safety bill
GM Endorses Bill Named After Sisters Killed In Rental Car Crash - Raechel and Jacqueline Houck Safe Rental Car Act Gains Support
KEYT - KCOY - KKFX- TV Santa Barbara, CA
by Tracy Lehr
GM joins rental car companies, Cally Houck, CARS, and our consumer group allies in supporting the Raechel and Jacqueline Houck Rental Car Safety Act
"
OJAI, Calif. - General Motors announced its endorsement of a rental car safety act that is named after the daughters of an Ojai lawyer.
Cally Houck's daughters Raechel and Jacqueline Houck died in a rental car that crashed on the 101 freeway nearly 10 years ago.
The Chrysler PT Cruiser had a power steering defect. Enterprise paid the family $15 million [after a trial in court].
But the family is still fighting [ever since], for a bill to prevent rental car companies from renting or selling recalled cars.
Houck said she was pleased by GM and hope other car makers will do the right thing on behalf of consumers."
See video:
KEYT-TV - KCOY - KKFX-TV report: GM Supports Rental Car Safety Act
11 Consumer Groups ask F.T.C. to Investigate CarMax over Unfixed Recalled Cars
New York Times
June 24, 2014
By Christopher Jensen
"Saying that advertisements by CarMax, the nation’s largest used-car retailer, are deceptive, a coalition of 11 consumer groups has asked the Federal Trade Commission to investigate.
Rosemary Shahan, the president of Consumers for Auto Reliability and Safety, said the groups would like the F.T.C. to stop CarMax from selling used vehicles without fixing recalls. “They are trying to say they are not responsible for making sure the recall work is done at the time you buy the car,” she said.
The CarMax-related petition being sent to the F.T.C. also has the support of Senator Charles E. Schumer, Democrat of New York. “It is bad enough that used-car dealers are not required by law to fix a safety recall problem prior to selling the recalled vehicle to a consumer,” Senator Schumer wrote in a supporting letter sent to the F.T.C. on Monday. “Compounding the safety risks with misleading and deceptive advertising and sales practices only further endangers the safety of used-car customers and everyone who shares the roads,” he wrote.
The lack of a law requiring recall repairs to be performed on used vehicles surprised Angela Davidson, who bought a 2010 Ram 1500 pickup from a CarMax dealer in Irvine, Calif., last month. She contacted Chrysler to see about using Bluetooth to connect her cellphone. After providing the vehicle identification number, she was told that her Ram had been recalled in February 2013 because
the rear axle might seize up. Chrysler had told federal safety regulators that such a development could “cause a loss of vehicle control and/or a vehicle crash with little warning.”
“If I had known that there was an open recall like that there is no way on this Earth that I would have driven off with that truck,” she said."
Read more:
New York Times: Consumer Groups Ask FTC to Investigate CarMax
Petition Seeks to Block CarMax Sales of Unrepaired Recalled Cars
Los Angeles Times
June 24, 2014
By Jerry Hirsch
“CarMax is playing recalled-used-car roulette with its customers' lives,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento consumer advocacy nonprofit that spearheaded the petition.
.... attorneys for CarMax said it was impractical for the used car seller to manage the repairs, with the company having to devote staff time to taking a recalled car to the nearest dealer of that make for the repairs. The manufacturer, not CarMax, would still pay for all recall repairs."
Read more:
LA Times: Petition Seeks to Block CarMax Sales of Unrepaired Recalled Cars
Safety Groups Urge FTC to Halt CarMax Advertising
over Unrepaired Recalled Vehicles
Detroit News
June 24, 2014
By David Shephardson
"Washington— A dozen auto safety and consumer groups asked the Federal Trade Commission to stop the nation’s largest used-car seller, CarMax Inc., from advertising its vehicles as rigorously inspected when it fails to complete recall repairs before selling the vehicles.
At issue in the FTC petition is the company’s advertising as “CarMax Quality Certified” with a rigorous “125+ point inspection.” The four-page petition calls it “inherently deceptive” to tell customers that vehicles have passed a rigorous safety inspection, “while failing to take even the most basic step of checking the vehicle’s safety recall status.”
Read more:
Detroit News: Safety Groups Urge FTC to Halt CarMax Ads over Recalled Cars
Consumer, Safety Groups Seek FTC Probe of CarMax
Wall Street Journal
June 24, 2014
By Tess Stynes
"Consumer and safety groups are urging the Federal Trade Commission to investigate their allegations that used-vehicle retailer CarMax Inc. is failing to check the safety-recall status of the vehicles it sells."
"CarMax is playing recalled used-car roulette with its customers' lives," said Rosemary Shahan, president of Consumers for Auto...
Read more:
Wall Street Journal: Consumer, Safety Groups seek FTC Probe of CarMax
Consumer Groups Warn CarMax Has Misleading Ads
WFMY News Channel 2 (Gannett)
By Benjamin Briscoe
"GREENSBORO, N.C. - If a used car dealer told you it put every vehicle through a "rigorous inspection" and "thorough reconditioning process" - would you expect the car you buy to still have problems? Problems that could lead to an engine fire or the brakes failing?
The engine fire and brake failure problems are real open recalls 2 Wants To Know found in CarMax's Triad stock. And those claims about "inspection" and "reconditioning" are from a CarMax commercial."
See video:
WFMY News: Consumer Groups Warn CarMax Has Misleading Ads
Recalled Used Cars Roam the Roads as Federal Legislation Stalls
New York Times
Front page
May 8, 2014
By Rachel Abrams and Christopher Jensen
Matthew Wald contributed to this report
"David Clayton was driving 70 miles an hour in his Ram 1500 pickup truck last October when he learned the hard way that it had a serious safety problem. The rear axle locked up, causing him to nearly lose control before wrestling the truck to the side of the highway. Chrysler knew about the axle defect, and had ordered a recall of the pickup before Mr. Clayton bought it used last July from a dealer in Visalia, Calif. But the dealer never had the axle repaired — and was not required to do so under the law."
"It should be a slam dunk," David J. Friedman, acting administrator of the National Highway Traffic Safety Administration, said of required repairs. "To me it is hard to oppose ensuring that people who buy a car, whether it is new or used, or whether you are renting a vehicle, can have the confidence that it is safe.''
....
"It’s just a question of how long it will take and how many people have to be killed or injured before it happens," said Rosemary Shahan, the president of Consumers for Auto Reliability and Safety, an advocacy group pushing for legislation."
CARS note: David Clayton bought his pickup truck from a Dodge - Chrysler - Jeep new car dealership that sold it to him as a "Factory-Backed Certified" vehicle that had undergone a rigorous 125-point inspection, and handed him a checklist that checked off "perform outstanding vehicle campaigns."
Read more: New York Times:
"Recalled Used Cars Roam the Roads" May 8, 2014
Sen. Boxer urges
General Motors CEO Mary Barra
to support Rental Car Safety Legislation
GM is Part of Industry Trade Group Lobbying to Block Legislation to Protect Consumers from
Unsafe, Recalled Rental Cars
Washington, D.C. – U.S. Senator Barbara Boxer (D-CA) today sent a letter urging General Motors CEO Mary Barra to support the Raechel and Jacqueline Houck Safe Rental Car Act, bipartisan legislation that would help protect consumers by keeping unsafe, recalled rental cars off the road.
Last week, at a Senate Commerce Subcommittee hearing on GM’s recall of 2.6 million vehicles, Senator Boxer
questioned Barra about GM’s troubling opposition to the legislation – through the industry trade group, the Alliance of Automobile Manufacturers – in light of the company’s promise to cover the cost of interim rental vehicles while customers wait for their vehicles to be repaired. Barra agreed at the hearing to take a closer look at the legislation.
Senator Boxer wrote,
“Your support for this bill is critical because right now there is no guarantee that your customers are renting safe cars while they wait for their recalled vehicles to be repaired.”
Senator Boxer
introduced the legislation with Senators Claire McCaskill (D-MO), Charles Schumer (D-NY) and Lisa Murkowski (R-AK) after two of Boxer’s constituents – Raechel and Jacqueline Houck, two sisters from Santa Cruz – were killed in a tragic accident in 2004 while driving a rented Chrysler PT Cruiser that had been recalled for a power steering hose defect but had not been repaired. The car caught fire because of the defect while traveling on Highway 101 in Monterey County, causing a loss of steering and a head-on collision with a semi-trailer truck.
In September 2012, Senators Boxer, Schumer and McCaskill
announced that all major car rental companies – Hertz, Enterprise, Avis Budget, Dollar Thrifty, and National – agreed to voluntarily stop the renting or selling of vehicles that have been recalled by their manufacturer and endorsed the legislation.
Although the bipartisan bill has the support of the major rental car companies and consumer advocates, the Alliance of Automobile Manufacturers – which includes GM – has opposed the bill and is working to prevent it from moving forward in the Senate. The National Automobile Dealers Association, which includes many GM franchise dealerships, is also opposed to the legislation.
“You testified that ‘When there’s a safety issue, there should never be a business consideration that goes against it’,” Senator Boxer continued.
“I hope you will take this to heart as you review this legislation.”
The legislation is also endorsed by American Car Rental Association, Consumers for Auto Reliability and Safety, AAA, Advocates for Highway and Auto Safety, Consumers Union, and State Farm Insurance. The bill also has the support of Cally Houck, the mother of Raechel and Jacqueline Houck.
The full text of the letter follows:
April 8, 2014
Mary T. Barra, Chief Executive Officer
General Motors Company
P.O. Box 33170
Detroit, MI 48232-5170
Dear Ms. Barra:
During your testimony before the Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Insurance, you stated that you had not read S. 921, the Raechel and Jacqueline Houck Safe Rental Car Act, which is named after two sisters from Santa Cruz who were killed when a recalled car they had rented caught fire and crashed into a truck.
This legislation, which was first introduced in 2012, would:
Prohibit the rental or sale of rental vehicles subject to a federal safety recall, consistent with existing law for new car dealers, who are prohibited from selling or leasing recalled vehicles.
Require rental companies to ground vehicles within 24 hours of receiving a safety recall notice from the manufacturer. Companies with fleets over 5,000 vehicles would have up to 48 hours.
Permit rental companies to implement temporary measures to eliminate the safety risk until parts are available.
Allow manufacturers to continue to issue technical service bulletins or customer satisfaction service campaigns for problems that do not rise to the level of a federal safety recall.
Your support for this bill is critical because right now there is no guarantee that your customers are renting safe cars while they wait for their recalled vehicles to be repaired.
You testified that “When there’s a safety issue, there should never be a business consideration that goes against it.” I hope you will take this to heart as you review this legislation.
Sincerely,
Barbara Boxer
United States Senator
Wisconsin "Lemon Law King" sues Tesla
San Jose Mercury News
April 7, 2014
Attorney Vince Megna filed the Wisconsin lawsuit in Milwaukee County Circuit Court. He said he believes the lawsuit is the first lemon law claim against Tesla anywhere in the country. Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a national nonprofit car safety and consumer advocacy organization, said she hasn't heard of any other similar lawsuits against the Palo Alto-based company.
"I would guess for the most part they're taking pretty good care of these customers," Shahan said of Tesla. "They have a lot of reason to keep them happy. High-end customers tend to get treated differently ... why did they let it get to this point where they had to file a lawsuit?"
Read more:
San Jose Mercury News: Wisconsin "Lemon law king" sues Tesla
General Motors under fire for fatal defects
Uprising Radio
April 3, 2014
Hear the interview with Uprising Radio host Sonali Kolhatkar
CA Senator Barbara Boxer
challenges GM CEO Mary Barra:
Stop opposing federal rental car / safety recall bill
Barra claims GM no longer places top priority on costs, at the expense of its customers' safety. But the sole reason that GM and the Auto Alliance give for opposing the Raechel and Jacqueline Houck Rental Car Safety Act? They don't want to face having to pay rental car companies for lost revenue if they have to ground vehicles that are under a safety recall, pending repairs. Apparently GM anticipates making a lot more unsafe vehicles that will be subject to safety recalls. Hardly reassuring.
BOXER PRESSES GENERAL MOTORS CEO MARY BARRA ON RENTAL CAR SAFETY
Senator Asks Why GM Is Part of Industry Effort to Block Legislation to Protect Consumers from Unsafe, Recalled Rental Cars – While at the Same Time Placing Owners of Its Own Recalled Cars into Rental Vehicles
Washington, D.C. – U.S. Senator Barbara Boxer (D-CA) today questioned General Motors CEO Mary Barra on rental car safety at a Senate Commerce Subcommittee hearing on GM’s recall of 2.6 million vehicles. Senator Boxer asked Barra to explain GM’s opposition – through the industry trade group, the Alliance of Automobile Manufacturers – to the Raechel and Jacqueline Houck Safe Rental Car Act, which would protect consumers from unsafe rental vehicles under recall – at the same time that GM is placing owners of its own recalled vehicles into rental cars.
To view the video of Senator Boxer’s exchange with Barra on her official website, please click
here.
“Do you support a proposed law by Senator McCaskill and myself that would say recalled cars like yours can no longer be rented or loaned?” Senator Boxer asked.
After Barra refused to commit to supporting the bill, Senator Boxer responded:
“Now you should know that my constituent Cally Houck lost her two daughters, Raechel, 24, and Jacquie, 20, in a tragic accident caused by an unrepaired safety defect in a rental car they were driving. So [with] Senator Schumer and McCaskill, we wrote the Raechel and Jacqueline Houck Safe Rental Car Act. And you know what, the rental car people support it, but you don’t. The automobile manufacturers don’t. So you are essentially bragging today, if I may use the word, that you’re telling your people to get another car, but at the same time your lobbying organization is opposing a bill that would make sure no one would die the way they died.”
While current law prohibits car dealerships from selling new vehicles under recall to consumers, no law bans rental car companies from doing the same or renting them to unsuspecting consumers. The
Raechel and Jacqueline Houck Safe Rental Car Act – sponsored by Senator Boxer and Senators Claire McCaskill (D-MO), Charles Schumer (D-NY) and Lisa Murkowski (R-AK) – would keep unsafe rental cars that have been recalled off the road.
The bipartisan bill is named in honor of Raechel and Jacqueline Houck, two sisters from Santa Cruz, who were killed in a tragic accident in 2004 while driving a rented Chrysler PT Cruiser that had been recalled for a power steering hose defect but had not been repaired. The car caught fire because of the defect while traveling on Highway 101 in Monterey County, causing a loss of steering and a head-on collision with a semi-trailer truck.
In September 2012, Senators Boxer, Schumer and McCaskill
announced that all major car rental companies – Hertz, Enterprise, Avis Budget, Dollar Thrifty, and National – agreed to voluntarily stop the renting or selling of vehicles that have been recalled by their manufacturer and endorsed the legislation.
Although the bill has the support of the major rental car companies and consumer advocates, the Alliance of Automobile Manufacturers – which includes GM – has opposed the bill and is working to prevent it from moving forward in the Senate. The National Automobile Dealers Association, which includes many GM franchise dealerships, is also opposed to the legislation.
Boxer made clear that Barra’s stance is especially troubling in light of GM’s promise to cover the cost of interim rental vehicles while its customers wait for their vehicles to be repaired. Although the major rental car companies have pledged to keep unsafe vehicles off the road, there is no assurance that a driver will be placed in a safer vehicle since there is no federal law that prevents unsafe, recalled vehicles from being sold or rented to consumers.
Senator Boxer pointed out,
“So you can send your owner of one of these cars to a rental place to get a loaner … and they could get a defective car.”
The legislation is also endorsed by American Car Rental Association, Consumers for Auto Reliability and Safety, AAA, Advocates for Highway and Auto Safety, Consumers Union, and State Farm Insurance.
Good Morning America:
Are used car dealers selling cars with open safety recalls?
April 2, 2014
Credit: Good Morning America
Good Morning America undercover investigation finds car dealers selling unsafe, recalled used cars, claiming they are safe -- including the Chevy Cobalt with the ignition switch defect that led to GM's massive safety recall and hearings before the US House and Senate. Major franchised new car dealership in Los Angeles sold recalled 2004 PT Cruiser to young actor, age 18, as his first car -- without bothering to have the safety recall repairs performed.
Watch the story:
abcnews.go.com/blogs/business/2014/04/gma-investigates-are-used-car-dealers-selling-cars-with-open-recalls
Consumer Financial Protection Bureau and U.S. Department of Justice Tackle auto dealer markups on auto loans
CARS President joins civil rights, consumer rights leaders on auto lending panel at CFPB
Richard Cordray, Director of the Consumer Financial Protection Bureau
Federal regulators, including the Consumer Financial Protection Bureau, have put auto lenders on notice they face a new level of scrutiny over their discriminatory auto lending practices, which result in minority car buyers being charged extra amounts in hidden excessive interest rates, despite having the same credit as non-minority borrowers.
According to CFPB Director Richard Cordray, "Some people end up paying more on their auto loans than their neighbors – with the difference being not their creditworthiness but their race or ethnicity. Such discrimination may result in millions of dollars in unjustified consumer harm every year in the auto lending industry."
Lenders such as Ally Bank have notified stockholders that they face the possibility of fines or other penalties linked to legal action over discriminatory auto lending. Ally Bank, formerly named the General Motors Acceptance Corporation, collapsed during the recession and was bailed out by taxpayers, to the tune of tens of billions of dollars. In 2004, GMAC settled similar litigation brought on behalf of African American and Latino borrowers who were charged higher dealer "markups" than their white counterparts who had similar credit.
Washington, DC (11/14/13): CARS President testifies at Consumer Financial Protection Bureau Auto Finance Forum regarding auto dealer markups on auto loans
New York Times: Scrutiny over disparity in loan fees at auto dealerships
CARS President Rosemary Shahan testified on a panel with Stuart Rossman from the National Consumer Law Center, Hilary Shelton from the National Association for the Advancement of Colored People (NAACP), and a representative of the Minority Auto Dealers Association. Rosemary stated that CARS opposes dealers being able to charge extra hidden fees that add to the interest rates consumers pay for auto financing. For many years, CARS has spearheaded efforts in California to reduce the risk of discriminatory auto lending and the costs car buyers pay for dealer markups. In 2004, CARS sought to cap dealer markups at $150 per transaction, via the Car Buyer Bill of Rights, a ballot initiative that statewide polling showed to be extremely popular. As the result of a watered-down legislative compromise, CA ended up with caps on dealer markups -- 2.5% for loans up to 60 months and 2% for longer loans. Except for Louisiana, California is the only state with a law that caps dealer markups.
On October 30, CARS filed the Car Buyers Protection Act, a new ballot initiative to make newer, cleaner, safer vehicles more affordable, including flat-out prohibiting dealer markups on auto financing. Among likely voters in 2014, that provision polls at an overwhelming 82% support.
Spokespersons testify before Consumer Financial Protection Bureau Auto Finance Forum. Panelists (from left): Rohit Chopra (CFPB), Damon Lester (National Association of Minority Automobile Dealers), Rosemary Shahan (CARS), Hilary Shelton (NAACP), Stuart Rossman (National Consumer Law Center)
Read more:
CFPB Director Richard Corday's remarks at the CFPB's Auto Finance Forum
Civil rights and consumer advocacy groups clash with auto dealers and lenders --
watch video of
Consumer Financial Protection Forum on Auto Financing
Wall Street Journal: Banks press car dealers on loan practice
US Department of Justice files lawsuit alleging auto lending discrimination in Los Angeles
LA Times: "Car dealer, immigrants settle suit -- Chinese-speaking buyers were falsely told bad credit meant they must take high-interest loans, plaintiffs say. Financial award is undisclosed."
NY Times: GM nears settlement in lawsuit over lending
###
New York Times: Dealer fees for arranging car loans are drawing scrutiny from U.S.
November 14, 2013
By Rachel Abrams
"When Pedro Lantigua, a 32-year-old truck driver from Oklahoma City, decided to trade in his vehicle last summer, he walked into his local dealership and drove off with a brand-new Chevrolet Silverado. Like millions of Americans, he agreed to a loan arranged by the dealer.
Unlike most buyers, Mr. Lantigua actually knows how much he spent on that service, but only because the details came out when he sued the dealer for breach of contract related to his trade-in.
Mr. Lantigua agreed to pay $609 a month, meaning he would own the truck in about six years. But Mr. Lantigua said he did not know that his 12.6 percent interest rate included about $1,000 for the dealership, David Stanley Chevrolet, which arranged Mr. Lantigua’s loan through Ally Bank, according to Mr. Lantigua’s lawyer, Kathi Rawls.
Dealers often arrange loans for car buyers through third-party lenders, providing something of a one-stop shop for about 80 percent of all consumers who need financing. Dealers can decide how much they want to charge for that service and tack their fee onto the lender’s interest rate.
"Individual consumers usually don’t even know that they’ve been marked up," said Rosemary Shahan, the president of Consumers for Auto Reliability and Safety, a nonprofit consumer advocacy group.
Dealerships are not required to disclose what percentage of the interest rate goes to them, and consumer advocates and some regulators are concerned that dealers’ ability to decide how much to charge has led to discriminatory lending against minorities. That concern has prompted a number of government investigations into the growing business of auto lending"
Read more:
New York Times report
CARS files Car Buyers Protection Act Initiative
for the Nov. 2014 Ballot in California
Statewide polling shows overwhelming support among likely voters
88% favor safety recall provision
The Car Buyers Protection Act will:
- Make it illegal for car dealers to sell, rent, lease, or loan used vehicles that are under a federal safety recall, unless the safety recall repairs have been performed
- Improve protections for car buyers who are victims of ID theft at auto dealerships
- Prohibit dealers from hiring people convicted of ID theft, forgery, or other fraud, for positions where they would have access to car buyers' personal financial information
- Prohibit dealers from engaging in "bait and switch" financing (also known as yo-yo financing)
- Prohibit dealer markups – hidden extra charges that raise the cost of financing car purchases and cost California car buyers over $2.6 billion in a single year
- Require all dealers to provide at least a 30 day / 1,000 mile warranty (currently, only “buy here pay here” dealers are required to provide minimum warranties, so many other dealers continue to sell faulty vehicles “AS IS”)
- Eliminate the New Motor Vehicle Board's authority to overrule the DMV when the agency disciplines an auto dealer or manufacturer for violating consumer protection laws
Read more:
News Release
California Statewide Polling Results
Car Buyers Protection Act -- Summary and background about each provision
TEXT of Car Buyers Protection Act filed with CA Attorney General
"Car dealers would see new rules under California ballot initiative push"
Sacramento Bee
October 30, 2013
By Jeremy White
"Sen. Hannah-Beth Jackson , D-Santa Barbara, and advocates announced the filing of a proposed ballot measure that would impose new restrictions on automotive sales.
Car sale safety has already been a focus for Jackson, who last session authored a stalled bill that would bar dealers from selling or leasing cars that have been targeted by safety recalls unless they’ve repaired the cars. Jackson said she plans to revive the legislation during the upcoming legislative session, an effort that would now proceed against the backdrop of an initiative push.
'We should be able to rely on these vehicles as being safe, particularly when they’re purchased from a car dealer,' Jackson said during Wednesday’s call."
Read more:
Sacramento Bee report
Initiative would tighten regulations on used car sales
Capitol Public Radio
October 30, 2013
by Katie Orr
"Federal law dictates car dealers must fix any manufacturer safety recalls before selling new cars. A ballot initiative filed today would require dealers in California to do the same when selling or leasing used cars.
Democratic State Senator Hannah- Beth Jackson is supporting the measure."
Read more:
Capitol Public Radio Report
California new car dealers claim Tesla violates advertising laws
Los Angeles Times
September 16, 2013
By Jerry Hirsch
"The trade group for California’s new car dealers wants the state Department of Motor Vehicles to investigate Tesla Motors' advertising practices, alleging that the upstart automaker is violating various state and federal laws in marketing its electric cars.
One consumer advocate said the car dealers group filed the complaint to protect its own interest.
'They want you to have to go to the dealer where they will mark up your loan, do bait-and-switch financing and engage in all sorts of practices that I am far more concerned about,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, in Sacramento.
Shahan noted that the car dealers group did not estimate how much Tesla’s advertising practices might cost California consumers and 'without seeing any numbers it is hard to say how concerned we should be about Tesla's advertising.'"
Read more:
Los Angeles Times report: new car dealers seek investigation of Tesla's advertising
Limo Safety Bill Passes Key Committee
San Mateo Daily Journal
August 31, 2013
"Limousines that carry 10 passengers or fewer will get annual inspections, two working fire extinguishers and assurances by owners to authorities that the vehicles meet applicable standards under a safety bill that sailed through a key legislative committee yesterday. The bill authored by state Sen. Jerry Hill, D-San Mateo, was sparked by the May 5 fatal limousine fire on the San Mateo-Hayward bridge that killed five women headed to a Foster City bridal celebration when they couldn’t escape the smoke and flames.... The bill is backed by the California State Sheriffs’ Association, California Professional Firefighters, California Fire Chiefs Association and Consumers for Auto Reliability and Safety."
Read more:
San Mateo Daily Journal report: Limousine Safety Bill Passes Key Committee
Critics: Car Dealer "Yo-Yo" Practices Affect "Most Vulnerable" Buyers
Credit: ABC News
ABC News -- Good Morning America
August 28, 2013
CARS contributed to this major investigative report
"It's named after a harmless children's toy, but the word yo-yo means something quite different in the car business. Consumer groups are warning Americans about the growth of so-called yo-yo financing – a practice in which car buyers leave a dealership with their new vehicle... Sometimes the consumer is told later there is a problem with their financing and that they must return the car. Critics say dealers then sometimes pressure the buyer to sign a new, and often more expensive deal."
Read more:
"ABC Good Morning America" exposes car dealer "bait and switch" financing scam
Personal Finance: High-Rate Loans Get Scrutiny
By Claudia Buck
Sacramento Bee
August 25, 2013
"In 2011, state Assemblyman Roger Dickinson, D-Sacramento, introduced a bill that proposed capping interest rates on car-title loans at 36 percent. It included other consumer protections, such as an extra 30 days for borrowers to repay before their vehicle is repossessed....'Most states don't allow auto- title loans. Why should California be behind on this issue?' said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, who testified in favor of Dickinson's bill."
Read more:
"Sacramento Bee report: High-Rate Loans Get Scrutiny"
Flood cars from Hurricane Sandy Show up on Used Car Lots
Hurricane Sandy flood car. Credit: ABC News
ABC's "The Lookout"
July 31, 2013
CARS contributed to this major investigative report
"When superstorm Sandy pummeled the Northeast last October the damage was widespread. Nearly 300 people lost their lives, and thousands more lost their homes. Then there were the cars. According to the National Insurance Crime Bureau, an estimated 250,000 cars were submerged for days in corrosive saltwater....In a five month investigation, "ABC's The Lookout" found these cars turning up on used car lots across the country."
California agencies tackle rules of road for driverless cars
Daily Republic
June 21, 2013
"Industry representatives said they must test the technology in all kinds of conditions. Safety advocates see it differently. 'Should we just let you decide your car is ready to go over Donner Pass in a snow storm? Or should we require you to … prove to us that your car is ready?” asked Rosemary Shahan, president of Consumers for Auto Reliability and Safety. “I would argue that there should be some regulation.' "
Read more:
Daily Republic report on driverless cars
'Car Title Loans' a Road to Deep Debt
By Carolyn Said
San Francisco Chronicle -- front page
May 3, 2013
"While 31 states have outlawed car-title loans, a loophole in California law allows unlimited interest on some secured loans for more than $2,500. Now, consumer advocates, who call the loans predatory, are urging state legislators to take action, either to ban the loans outright or cap interest at 36 percent. The federal government implemented that same cap for auto-equity loans to military members.
'Car lenders say they have to charge so much because they're high-risk loans,' said Rosemary Shahan, president of nonprofit advocacy group Consumers for Auto Reliability and Safety. 'There's no risk. They just show up and take your car if you don't pay. They can resell it to recoup their costs.'"
Read more:
San Francisco Chronicle: "'Car Title Loans' a Road to Deep Debt"
BOXER PRAISES COMMITTEE PASSAGE OF LEGISLATION TO ENSURE SAFETY OF AMERICA’S RENTAL CAR CUSTOMERS
Legislation Would End the Practice of Renting or Selling Vehicles Under Safety Recall
Sen. Barbara Boxer (D-CA)
– U.S. Senator Barbara Boxer (D-CA) today praised the Senate Committee on Commerce, Science and Transportation’s passage of the Raechel and Jacqueline Houck Safe Rental Car Act of 2013, legislation that will ensure the safety of America’s rental car fleet by preventing rental car companies from renting or selling cars or trucks that are under safety recall. Senator Boxer is a lead sponsor of the bipartisan measure along with Senators Chuck Schumer (D-NY), Lisa Murkowski (R-AK) and Claire McCaskill (D-MO). The bill passed the committee by a unanimous voice vote.
The legislation is named in honor of Raechel and Jacqueline Houck, two sisters from Santa Cruz, ages 24 and 20, who were killed while driving a recalled Chrysler PT Cruiser they had rented from Enterprise in 2004. About a month before the deadly crash, Enterprise received a recall notice that the PT Cruiser had a defective power steering hose that was prone to catching fire and that it would be repaired by Chrysler free-of-charge. Despite the warning, Enterprise did not get the vehicle repaired and rented it out to three other customers before renting it to the Houck sisters. The defect caused the car to catch fire and crash head-on into a tractor-trailer, killing both sisters.
Cally Houck
Their mother, Cally Houck, has since joined with consumer groups in support of the legislation, which would close a loophole in safety standards by requiring rental car companies to ground recalled vehicles as soon as they receive a safety recall notice and prohibit them from being rented or sold until they are fixed. Auto-dealers are already subject to these requirements and the bill would simply extend the same requirements to rental car companies.
“Today the Commerce Committee paid tribute to two of my California constituents who lost their lives in a senseless tragedy by passing the Raechel and Jacqueline Houck Safe Rental Car Act,” Senator Boxer said. “This bill will protect our families by keeping vehicles under safety recall off our roads, and I will be working hard to ensure its passage by the full Senate.”
“If this bill had been in effect when my daughters rented that recalled car, they would still be alive today,” said Cally Houck.
“No other parents should have to suffer such a horrific loss because a rental car company hasn’t bothered to get an unsafe recalled car repaired.”
Senator Charles Schumer
added Rosemary Shahan, President of Consumers for Auto Reliability and Safety.
The legislation is supported by all of the major car rental companies – Hertz, Enterprise, Avis Budget and Dollar Thrifty – as well as Consumers for Auto Reliability and Safety, Advocates for Highway and Auto Safety, the Center for Auto Safety, Consumer Action, the Consumer Federation of America, Consumers Union, the National Association of Consumer Advocates and the Trauma Foundation.
###
Car Dealers tell CA Legislators "Don't stop us from selling unsafe, recalled used cars"
Fatal Accident Sparks Debate at State Capitol
ABC 30 KFSN-TV Fresno, CA
Mother of Crash Victims Testifies in Support of Senate Bill
Fox 5, San Diego
Calif. Lawmakers slam brakes on used-car safety bill
Bill spawned by CHP Officer's death stalls
Rosemary Shahan, president of CARS, tells Today Show
about hazards of unsafe, recalled cars
Today Show Investigation:
Car dealers caught on camera
selling unsafe, recalled used cars
March 7, 2013
The TODAY Show's Jeff Rossen, Josh Davis and their news team went undercover and found licensed auto dealers selling cars without bothering to get the safety recall repairs done first -- even though the repairs are FREE. First TODAY scoped out cars that are under a safety recall, for sale on car lots in the Midwest. Then they went on the lots and asked whether the cars were safe. So -- did the dealers told them the truth, without the cameras in sight? What do you think?
Watch what happens when dealers are asked if an unfixed, recalled car is safe --
Today Show: Rossen Reports: Hidden cameras reveal cars for sale with potentially deadly safety flaws
Unsafe recalled cars can kill you, or your family. Even if you don't buy one. If the steering goes and the driver of an unrepaired, recalled car loses control, you are at risk -- even if you just happen to be nearby. Or if the brakes fail and a recalled SUV crashes into a car that your child is riding in. Last year, over 32,000 people died in motor vehicle crashes. Vehicle crashes are the #1 killers of people under the age of 34. For most people, the riskiest thing they do on a regular basis is to drive a car, or ride in one. Our highways are already risky places. The last thing we need is for vehicles with known safety defects to be on the roads.
Today Show investigative reporter Jeff Rossen confronts
auto dealer caught selling recalled vehicle on his lot
So it's important to get recalled cars fixed -- pronto. Last year, over 16 million vehicles were recalled due to defects like -- catching on fire, brake failure, cruise control that goes haywire, axles that break apart, and other life-threatening defects. Most owners got their cars fixed -- but millions didn't, and traded them in at dealerships across the U.S. where they are ticking automotive time bombs.
Polling shows overwhelming public support for ensuring that vehicles are safe and recall repairs are performed -- before vehicles are rented or sold.
CARS is spearheading efforts to get unsafe, recalled used cars fixed -- BEFORE people are hurt. Were you sold an unsafe, recalled car? We want to hear from you. Here's how to get in touch --
http://carconsumers.org/feedback.php
Where's the best place to check for safety recalls? Check out the manufacturer's website, call their toll-free number, or call a local dealer that sells the same make and model. The National Highway Traffic Safety Administration has also started a program to alert car owners by email about new safety recalls -- before you get a letter from the manufacturer. Here's where to register to get email notices from NHTSA, the nation's leading auto safety agency:
www-odi.nhtsa.dot.gov/subscriptions/index.cfm
In this Jan. 11, 2011 photo, a potential car buyer looks over used cars at a dealership in Sacramento, Calif. Rich Pedroncelli / AP
FTC: Let car buyers eat LEMONS!
NBC News
January 15, 2013
FTC's proposed used car rule a lemon,
critics claim
" 'The FTC really blew it," said Rosemary Shahan, founder and president of Consumers for Auto Reliability and Safety (CARS). "This industry has a real problem and the proposed rule changes do not address that.' [CARS comment: In fact, they would make things even worse for consumers.]
Shahan and other consumer advocates want the FTC to require more information on the Buyer's Guide that must be on every used vehicle offered for sale.
Consumer groups and law enforcement officials in many states demand more. They want the Used Car Rule to require dealers to disclose significant vehicle history information if they have it....In comments submitted to the FTC on behalf of the attorneys general in 40 states, the National Association of Attorneys General (NAAG) called the current Buyer's Guide 'archaic' and of 'limited value' to used car buyers.
'We think this a lost opportunity,' said NAAG's Bill Brauch. 'When it comes to a used vehicle, nothing is more important for a consumer to know than its history. Was it previously wrecked, flooded, or a lemon law buyback?'"
Read more:
NBC News report
Cleveland Plain Dealer
Sheryl Harris, Consumer Reporter
December 11, 2012
"State attorneys general, including Ohio's, and groups like CARS had encouraged the FTC to expand the buyers guide to include information on whether the car was ever declared an insurance loss because of a flood or collision.That information is searchable through the National Motor Vehicle Title Information System, at vehiclehistory.gov. Rather than requiring dealers to check the system and include that information on the Buyers Guide, the FTC leaves that to consumers."
Read more:
Consumer Groups Say FTC's Used Car Rule a Lemon
South Coast Today
Beth Perdue
February 17, 2013
"A move by the Federal Trade Commission to modify its buyers' guide for used cars is being panned by consumer groups, who say the current guide is ineffective and proposed changes are even worse."
Read more:
Used Car Buyers Guide is no help in preventing fraud
ACT NOW!
Do you think that auto dealers should have to reveal -- in writing -- if they know that a car was totaled in a wreck, or was a flood car? Most people would say "of course." But not the Federal Trade Commission. If the FTC has its way, car dealers will NOT be required by the nation's premier consumer protection agency to tell you a single thing about the history or condition of the car -- even if the dealer KNOWS that it's worth thousands less than similar cars that weren't wrecked, or it's grossly unsafe.
CARS thinks that when you buy a car, you should not be the last to know what the dealer already knows about a car. After all, your life -- and the lives of your family, friends, and other passengers -- depends on your not getting stuck with an unsafe lemon.
Here's where to tell the FTC what you think -- please share this link with friends and post it on Twitter, Facebook, and other sites. All comments become part of the public record and can be accessed by others, including news media:
https://ftcpublic.commentworks.com/ftc/usedcarrulenprm
Superstorm Sandy will raise used-car prices nationwide
Victims of Hurricane Sandy.
Los Angeles Times
November 9, 2012
"The flood of Sandy-damaged cars further poses the risk that many will wind up in the hands of unscrupulous dealers peddling to unwitting consumers. The vehicles pose both financial and health risks.
'Cars that have been submerged in saltwater, 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,' said Rosemary Shahan, president of Consumers for Auto Reliability and Safety.
Shahan said there were cases of Nissan vehicles flooded by Hurricane Katrina auctioned as 'new' as far away as California after that storm.
She urged shoppers to look for signs of flood damage, including engines that hesitate or run roughly, musty interior smells or signs of silt residue or premature rust.
Buyers should also run the vehicle information number through the National Motor Vehicle Title Information System at
vehiclehistory.gov. Insurers, salvage pools, auctions and junkyards in all 50 states are required to report all total-loss vehicles to this federal database within 30 days, Shahan said."
Read more:
"Los Angeles Times: Superstorm Sandy will raise used-car prices nationwide"
Buyer Beware: Cars flooded by Hurricane
Could turn up on the market
A flood vehicle from the storm.
New York Times
November 2, 2012
"Many cars submerged by the floods caused by Hurricane Sandy could eventually turn up on the automotive market. Consumer advocates warn that buyers need to beware of vehicles that have suffered water damage, only to be dried out and marketed by sellers who conceal their histories. Nevertheless, new federal regulations could help protect car buyers.
On Wednesday, Geico had already received 20,000 auto claims for flood and other damage from the East Coast, according to a statement issued by Tony Nicely, chairman of the company. State Farm said it had received 4,000 claims. Those numbers are expected to grow, and many of the cars are sitting in salty water, a particular threat to electrical systems and air bags.
In the past, consumer advocates and legislators worried that differences in state laws could allow a car described on its title, or "branded," as a flood vehicle in one state to emerge with a clean title in another state. Now, title-washing, as it is called, 'is much less of a problem,' said Rosemary Shahan, president of Consumers for Auto Reliability and Safety. Her group and other consumer advocates successfully sued the Justice Department in 2008, demanding that regulations be issued.
The result, Ms. Shahan said, is that
vehiclehistory.gov tells consumers whether a vehicle has been totaled regardless of lax state titling laws or interstate sales....Ms. Shahan noted, however, that some states do not brand vehicles as flooded." (Note: it is still important to ALWAYS have any car you're considering inspected before you agree to buy, even if it doesn't show up in the vehicle history database.)"
Read more: "
New York Times: cars flooded by Hurricane could turn up on market"
Tap Car Insurance After Hurricane Sandy
Tap into your insurance policy.
Fox Business News:
November 15, 2012
"...consumer advocates, including Rosemary Shahan, President of Consumers for Auto Reliability and Safety in Sacramento, Calif., say that once water gets in the car it becomes dangerous to your safety and health.
"Today the engines, brakes and air bags are all controlled by computers. It's very unreliable, especially of there's saltwater," Shahan says. She says that not only will the car corrode, but the car's interior will be saturated by contaminated water, making it hard to clean up."
Read more: "
Fox Business News: Tap Car Insurance After Hurricane Sandy"
Brian Ross reporting for Good Morning America.
ABC News
Good Morning America
Brian Ross, reporting from New York
September 28, 2012
St. Louis Post-Dispatch
September 27, 2012
USA Today
September 27, 2012
Boxer, Feinstein Introduce Legislation to Ensure Safety of America's Rental Car Fleet
U.S. Senators Barbara Boxer (L) and Dianne Feinstein take the lead in championing rental car safety. (AP file photo)
Legislation Would End the Practice of Renting or Selling Vehicles Under Safety Recall
August 2, 2012
Washington, D.C. – U.S. Senators Barbara Boxer and Dianne Feinstein (both D-CA) today introduced the Raechel and Jacqueline Houck Safe Rental Car Act of 2012, legislation that will ensure the safety of America's rental car fleet by preventing rental car companies from renting or selling cars or trucks that are under safety recall.
The two California Senators introduced the legislation named in honor of Raechel and Jacqueline Houck, two sisters from Santa Cruz, ages 24 and 20, who were killed while driving a recalled Chrysler PT Cruiser they had rented from Enterprise in 2004. About a month before the deadly crash, Enterprise received a recall notice that the PT Cruiser had a defective power steering hose that was prone to catching fire and that it would be repaired by Chrysler free-of-charge. Despite the warning, Enterprise did not get the vehicle repaired and rented it out to three other customers before renting it to the Houck sisters. The defect caused the car to catch fire and crash head-on into a tractor-trailer, killing both sisters.
Their mother, Cally Houck, has joined with consumer groups in support of the new legislation, which would close a loophole in safety standards by requiring rental car companies to ground recalled vehicles as soon as they receive a safety recall notice and prohibit them from being rented or sold until they are fixed. Auto-dealers are already subject to these requirements and the bill would simply extend the same requirements to rental car companies.
"We cannot allow another family to go through the pain and loss that Cally and her family have gone through," Senator Boxer said. "We will not rest until Congress has passed legislation that protects American consumers from these unsafe vehicles, and we urge all the rental car companies to join Hertz in committing to the safety of their customers."
U.S. Senators Barbara Boxer (L) and Dianne Feinstein (photo from earlier event)
Earlier this year, Senator Boxer sent a letter asking the nation's four leading rental car companies – Enterprise, Hertz, Avis/Budget and Dollar/Thrifty – to protect consumers from unsafe vehicles by making the following pledge: "Effective immediately, our company is making a permanent commitment to not rent out or sell any vehicles under safety recall until the defect has been remedied."
Of the four companies – which together control 92 percent of the rental car market – only Hertz agreed to the pledge in its entirety. Senator Boxer is continuing to urge the companies to take the pledge and fully protect their customers.
The Senate bill is the companion legislation to a bill introduced last month by Congresswoman Lois Capps (D-CA), Congressman Eliot Engel (D-NY) and Congresswoman Jan Schakowsky (D-IL). The new House and Senate bills are an updated version of legislation introduced last year by Senator Chuck Schumer (D-NY), Senator Boxer, Senator Feinstein and Senator Richard Blumenthal (D-CT).
The new House and Senate legislation is supported by Hertz, Consumers for Auto Reliability and Safety, Advocates for Highway and Auto Safety, the Center for Auto Safety, Consumer Action, the Consumer Federation of America, Consumers Union, the National Association of Consumer Advocates and the Trauma Foundation.
Would you "Like" Enterprise and other companies to
stop renting unsafe vehicles?
Show your support by "Liking" this on Facebook, by clicking the "Like" button below. Thanks!
Dispute Over Renting Recalled Vehicles Reaches a Crescendo
Rental car companies at the airport.
Roll Call
By Janie Lorber and Kate Ackley
July 17, 2012
"Consumer safety advocates may be on the verge of winning a years-long fight to ban rental car companies from renting and selling recalled vehicles.
Enterprise Rent-A-Car publicly opposed such proposals, but with a new bipartisan bill in the House and a companion measure expected to drop any day in the Senate, other industry players are joining the fray....Enterprise, one of the largest privately held businesses in the nation, has spent more than $200,000 on lobbying so far this year. In 2011 the company spent nearly $1 million, almost four times the amount spent by its major competitors - Avis-Budget and Hertz Rent-a-Car - combined.
'Without legislation, what Enterprise is doing is not enforceable. They can say they are doing it, but not really be doing it," said Pamela Gilbert, a lobbyist with Cuneo Gilbert & LaDuca, representing CARS. "They can do it today and stop tomorrow. In both cases, without a law, there isn't anything anyone can do about it.' "
Would you "Like" Enterprise and other companies to
stop renting unsafe vehicles?
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More Consumers with Bad Credit Scoring Car Loans
Arm yourself with information to improve your chances for approval.
By Allie Johnson
CreditCards.com
July 23, 2012
Get a good deal, at any score:
1. Know your score before you shop. Experts say it's not enough just to look at your credit report, which you can get for free from each of the major credit bureaus once a year at Annual Credit Report.com. You also should get your credit score, which can be purchased from the credit bureaus or on myFICO.com. (According to myFICO.com, you have three separate FICO scores, one for each of the major credit bureaus.) "Make sure you know your credit score and it's very recent so they can't say, 'Oh it used to be good, but now you have a ding and this is the best we can do,'" says Rosemary Shahan, president of Consumers for Auto Reliability and Safety (CARS).
Read more: at
Fox Business
Hertz, Enterprise at odds over changes to car-rental risks
Will all the rental companies ever agree to put consumers first?
Philadelphia Enquirer
June 25, 2012
by Jeff Gelles
"In hindsight, many of the vehicle crashes that kill more than 30,000 people a year in the United States seem utterly senseless — avoidable if a drunk had just stayed off the road, a distracted driver had let a text go unanswered, or a commercial driver had been better rested or less worried about the costs of delay.
Even in that sad litany, the deaths of Jacqueline and Raechel Houck stand out: preventable by a simple fix in car-rental practices. Yet, after two years of crusading to get rental-car companies to change their ways, their bereaved mother, Carol "Cally" Houck, still hasn't quite succeeded."
Read more: at
Philly.com
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Cally Houck pushes rental car companies to stop leasing out unsafe, recalled cars
Cally Houck sits by pictures of her daughters.
Huffington Post
June 20, 2012
By Sharon Silke Carty
"Cally Houck wants rental car companies to promise they won't rent or sell a vehicle until any safety recall issue is addressed. So far, only one rental car company -- Hertz Rental -- has promised to permanently stop the practice. Other companies have said they are on board, but won't promise to never rent a recalled vehicle and not fixed.
"It's so simple, so simple," Houck said. The rental companies "just don't want to be told what to do." Houck has found a ally in the Senate in Boxer, who is planning to introduce a bill similar to one proposed last year by Sen. Chuck Schumer.
On May 7, Boxer gave the major car rental companies 30 days to sign a pledge saying they would stop renting recalled vehicles. She announced last week that only Hertz made that commitment"
Read more: at
The Huffington Post
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"Buy Here Pay Here" auto sales bill gaining ground
Buy Here, Pay Here lot in L.A.
Los Angeles Times
June 25, 2012
by Marc Lifsher
"Legislation to regulate the sale of high-mileage cars to credit-risky motorists breezed through a key committee of the state Assembly, despite growing opposition from so-called Buy Here Pay Here auto dealers. The bill by Sen. Ted Lieu (D-Torrance) would cap interest rates on loans provided by the sellers at just over 17%. Currently, unregulated interest rates can run as high as 30%, Lieu said.....
But consumer groups complained that dealers in this fast-growing automobile market segment reap large profits by repossessing the same car as many as eight times. 'Part of the industry's basic design is for these loans to fail,' said Rosemary Shahan, executive director of Sacramento-based Consumers for Automobile Reliability and Safety, which supports the Lieu legislation."
Read more: at
The L.A. Times
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4 rules for getting a car loan
Time / Moneyland
June 18, 2012
by Martha White
"If your credit is good, you still should not assume that you’ll qualify for the 0% financing offers many dealers dangle in their TV and radio ads, says Rosemary Shahan, president of Consumers for Auto Reliability and Safety. She says roughly nine out of 10 buyers never qualify for that and wind up paying a higher rate.
Shop Around
“Our number-one piece of advice for consumers is never, ever get your loan from the dealer,” Shahan says. It’s advice other consumer advocates echo.
“Get preapproved for financing before you set foot in the dealership,” says Chris Kukla, senior counsel for government affairs at the Center for Responsible Lending."
Read more:
http://moneyland.time.com/2012/06/18/4-rules-for-getting-a-car-loan/#ixzz1yPWYunTd
CA legislation to curb "Buy Here Pay Here" auto sales scams faces stiff opposition from
auto dealers who sell overpriced, junky cars to vulnerable consumers
"The legislation was introduced early this year to regulate the large Buy Here Pay Here industry that operated mostly out of the spotlight. Unlike other used car dealers, Buy Here Pay Here lots offer their own in-house financing, allowing them to sell to consumers with damaged or nonexistent credit. Critics say that the dealers charge interest rates that can top 30%, mark up the cost of cars far beyond their value and sell vehicles in poor condition."
Read more:
Los Angeles Times report, June 9, 2012
Three bills targeting buy here pay here dealers continues to advance.
Los Angeles Times
June 1, 2012
"In particular, the [buy here pay here dealers] opposed a provision that would require Buy Here Pay Here dealers to offer a warranty covering major components for at least 30 days or 1,000 miles. Currently most cars on such lots are sold on an as-is basis."
Read more:
Los Angeles Times June 1, 2012
Shady car dealers targeting military buyers
Car dealer rip-offs affect mission readiness
MSNBC report by Herb Weisbaum
May 31, 2012
Rosemary Shahan, president of Consumers for Auto Reliability and Safety, has a long list of “unconscionable practices” she says unethical dealers use on military buyers. They include: falsifying loan applications, bait-and-switch financing and selling a car they know has been in a wreck without telling the customer.
“Auto sales and financing scams are leading causes of financial readiness problems for military service members and their families,” she says.
Read more:
lifeinc.today.msnbc.msn.com/_news/2012/05/31/11959202-shady-car-dealers-targeting-military-buyers
Money Magazine: Heroes
A yearlong celebration of 40 people who have made extraordinary efforts to improve others' financial well-being.
May 2012
"A Driving Force for Lemon Laws"
Rosemary Shahan, President and Founder of Consumers for Auto Reliability and Safety
Why she's a hero: Shahan, 62, has spent three decades fighting on drivers' behalf for more effective repairs, improved safety, and fairer financing.
Read article:
money.cnn.com/galleries/2012/pf/1205/gallery.consumers-customer-service.moneymag
Auto safety activist Rosemary Shahan turns lemons into legislation
Los Angeles Times
April 1, 2012; by Ken Bensinger
"Shahan is the founder and president of Consumers for Auto Reliability and Safety (CARS). The Sacramento organization has been the driver of some of the most important advances in auto-related safety and financial protection regulation on the books today.
Shahan, 62, championed the nation's first lemon law in California, which has since been copied in every state. She was a major force behind the federal air bag mandate and laws protecting military service members from abusive car loans. And she's not finished."
Read article:
articles.latimes.com/2012/apr/01/business/la-fi-himi-shahan-20120401
Three bills to rein in buy here pay here dealers advance.
Los Angeles Times
April 25, 2012
by Marc Lifsher
"These dealers advertise that they have transportation for people who need to go to work and give people a way to improve their credit," said Rosemary Shahan, executive director of Consumers for Auto Reliability and Safety. "Instead, the exact opposite happens, and they are left with a car that breaks down right away and needs repairs that they can't afford."
Read article:
www.latimes.com/business/la-fi-buy-here-pay-here-20120425,0,6508765.story
Buy Here Pay Here auto dealers scam consumers
Sky-high interest rates, cars that break down soon after purchase, inflated prices, and little protection for car buyers.
Los Angeles Times report exposes the shady dealings of "Buy-Here-Pay-Here" dealerships.
Over a period of months, CARS contributed to this major three part series, which has garnered attention around the nation.
Part One: A Viscious Cycle in the Used Car Business
How auto dealers profit from "churning" used cars that break down soon after purchase and need expensive repairs the buyers can't afford
The Los Angeles Times
by Ken Bensinger
October 30, 2011
Read more:
www.latimes.com: Buy Here Pay Here part 1
Part Two: Wall Street investors place big bets on Buy-Here-Pay-Here auto dealers
Exploiting the poor pays big dividends for fat cat lenders
The Los Angeles Times
by Ken Bensinger
November 1, 2011
Read more:
www.latimes.com: Buy Here Pay Here part 2
Part Three: A hard road for the poor in need of cars
Non-profit programs help struggling families get better jobs, improve their education, and transform their lives
The Los Angeles Times
by Ken Bensinger
November 3, 2011
Read more:
www.latimes.com: Buy Here Pay Here part 3
California Passes First-in-Nation Protections for Car Buyers
Van Nuys News Press
Sept. 6, 2011
"This bill unleashes the power of technology to provide first in the nation consumer protections, cut red tape, and help save the state millions," said [California Assemblymember Robert] Blumenfield. "Buying a car, especially a used one, requires some detective work to determine its safety and value. By requiring junk cars and death traps to be flagged with a
warning sticker, consumers can see these vehicles for what they really are when shopping for a car."
The bill implements a first in the nation requirement that car dealers post a red [warning} sticker on the used cars they sell that are flagged in a federally mandated database – the National Motor Vehicle Title Information System – as "junk," "salvage," or "flood" branded vehicles.
Read more:
http://www.vannuysnewspress.com/news/2011/09/06/legislature-passes-first-in-nation-protections-for-car-buyers/
CARS spearheaded the successful effort to include the warning sticker provisions in the bill. Law enforcement agencies and officials joined in supporting the measure, after the pro-consumer changes were made. California Governor Jerry Brown has signed the bill into law. It is scheduled to kick in, beginning on July 1, 2012. Meanwhile, consumers can check the NMVTIS database directly, by
clicking on:
http://www.vehiclehistory.gov.
Wreck Repairs
Can you trust your insurer to tell you where to go for repairs, after a wreck? Not necessarily.
KGO-TV 7 on Your Side, with Michael Finney
September 2, 2011
"Steering is like HMOs for car repair, where the insurance company wants you to go to a place where they control the repairs and they don't necessarily have your interest at heart," said Rosemary Shahan, an automobile consumer advocate with C.A.R.S. Shahan says there can be a close relationship between the insurer and auto body shops that work against the consumer, but the law is clear: You are in charge.
Watch report:
http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=8340728
Note: If you live in Boston, Chicago, Delaware Valley, Puget Sound, San Francisco/Oakland/San Jose, Twin Cities, or Washington, DC, CARS recommends that you subscribe to Checkbook Magazine, an excellent resource for ratings of auto repair shops and other services.
Another excellent resource available nationwide that rates auto repair shops: Car Talk's Mechanics Files, at
http://www.cartalk.com/content/mechx
Bill requires sticker warning of damaged vehicles
Associated Press
August 30, 2011
"Car dealers would have to place a red sticker on damaged vehicles to alert potential buyers, under a bill approved by the state Senate. Democratic Assemblyman Bob Blumenfield of Sherman Oaks, says AB1215 would create the nation's first requirement that dealers prominently mark vehicles that a federal database shows have been registered as junk, salvage or inundated in floods."
Read report:
http://www.fresnobee.com/2011/08/30/2517868/bill-requires-sticker-warning.html
Opinion: A leap forward for cars, consumers and California
Capitol Weekly
August 18, 2011
"California may soon take a giant leap forward toward making the purchase of a used car considerably less risky. For car buyers, the bill requires dealers to disclose vehicle [history] information which consumers in other states hardly know exists. It requires all car dealers to obtain a vehicle title report for each used vehicle offered for sale. If a vehicle is identified as "salvage," junk," "flood," or a "buyback" under California's lemon law, the dealership must place a warning sticker ON THE CAR. This first-in-the-nation consumer protection will relay vital information about a vehicle's safety, reliability, and worth BEFORE consumers choose to negotiate a purchase."
Read op-ed:
http://www.capitolweekly.net/article.php?1=1&_c=zypw7anopulvoy&xid=zxggynmj2gpy77&done=.zxgse210bxydcm&_credir=1314916352&_c=zypw7anopulvoy
California Bill Targets Rental Car Defects
The Sacramento Bee
April 22, 2011
"A Sacramento-based consumer advocacy group and a devastated Ventura County mom are pressing California lawmakers to close what they call a lethal loophole in car rental procedures....Rental car companies say the measure's language is too sweeping and includes recall work on problems that do not compromise safety.
The National Highway Traffic Safety Administration has countered that "all safety recalls resulting from defects present an unreasonable risk to safety." NHTSA took its stand after several car-rental companies conceded that they still rent out recall-notice vehicles if the reported problem is not deemed serious [by the rental car company]."
Read more:
http://www.sacbee.com/2011/04/22/3571171/california-bill-targets-rental.html
Faced with Recalls, Some Rental Car Companies Decide to Wait
The New York Times
April 19, 2011
"Several major rental car companies have told the National Highway Traffic Safety Administration that in some cases they continue to rent vehicles that have been recalled if they believe the problem is not serious....But as N.H.T.S.A. sees it, there is no such thing as an unimportant recall. 'All safety recalls resulting from defects present an unreasonable risk to safety and we believe it is inappropriate to suggest that some defects are not risky enough to require repair,' Karen Aldana, a spokeswoman for the safety agency, said in an e-mail. 'For the safety of the motoring public, all recalled vehicles should be fixed promptly.' "
Read more:
http://wheels.blogs.nytimes.com/2011/04/19/faced-with-recalls-rental-companies-sometimes-decide-to-wait
California lawmaker introduces bill to stop rental car companies from playing "rental car roulette" with their customers' lives
CBS Sacramento,
Channel 13:
Rental Car Recall
"A California mother made an emotional plea at the State Capitol after losing her two daughters to a horrific crash blamed on a recalled vehicle. Cally Houck lost her two daughters, 24-year-old Raechel and 20-year-old Jacqueline near Kings City in Central California in 2004. They lost control of the Chrysler PT Cruiser they had rented."
See report:
Call Kurtis: Rental Car Recall
ABC -- KGO-TV San Francisco,
Channel 7:
New California bill targets rental car companies
"Consumer groups are applauding a bill introduced in Sacramento that would stop car rental companies from renting out vehicles that are facing a safety recall."
See report:
New Calif. bill targets rental car companies
NBC / MSNBC --- KCRA-TV Sacramento,
Channel 3:
Bill to require safer rental cars announced
Consumer groups applauded a bill Wednesday that would prevent rental car companies from renting any vehicle facing a safety recall... Also attending was Carol Houck, whose two daughters were killed in 2004 in a crash while driving a PT Cruiser. That vehicle, which they rented from Enterprise, had been under a federal recall order due to a steering problem.
"Had this bill been in place in 2004, my daughters would be here," said Houck.
See report:
Bill To Require Safer Rental Cars Announced
Santa Cruz Sentinel
by Jondi Gumz
Assemblyman Monning to introduce rental car safety bill
SANTA CRUZ - Rental cars recalled for safety reasons would be grounded until repairs are made if a bill proposed by Assemblyman Bill Monning, D-Carmel, becomes law.
Monning said a "loophole" in federal law allows rental car companies to rent out vehicles that are under recall while new car dealers are prohibited from selling new cars under recall until they are repaired.
He is expected to introduce AB 753 this morning at a news conference in Sacramento.
He said the measure was prompted by the death of two Santa Cruz residents, Raechel Houck, 24, and her sister, Jacqueline, 20, in a fiery crash in 2004 while driving a PT Cruiser rented from Enterprise Rent-A-Car. The car had been recalled for a defective power steering hose prone to catch fire, but it hadn't been repaired.
See report:
http://www.santacruzsentinel.com/ci_17676460
San Jose Mercury News
Aug. 9, 2010
By Jondi Gumz
Advocates urge FTC to stop defective car rentals at Enterprise that killed Santa Cruz sisters
"Two auto safety advocacy groups petitioned the Federal Trade Commission Monday to prevent the nation's largest rental car company from renting out recalled but unrepaired vehicles to customers."
Read more:
http://www.mercurynews.com/breaking-news/ci_15721653
National Public Radio
All Things Considered
July 21, 2010
By Scott Horsley
New Law Protects Consumers from Non-Bank Lenders
HORSLEY: The new law represents the biggest change to financial rules in decades. But it largely exempts one group of lenders: Car dealers fought to be saved from the new bureau, and they won.
Ms. ROSEMARY SHAHAN (President, Consumers for Auto Reliability and Safety): It's a huge loophole because auto lending is second only to home mortgages and bigger than credit cards.
HORSLEY: Rosemary Shahan heads a California-based consumer group that specializes in cars and car loans. She says some of the risky lending practices that plagued the subprime mortgage industry can also be found on the nation's car lots.
Ms. SHAHAN: In fact, there are some folks that will tell you that those practices started with auto and spread to home mortgages: The falsified loan applications, getting people into loans they couldn't afford, securitizing everything and spreading the risks throughout the financial system.
HORSLEY: Car dealers aren't entirely off the hook. The new law gives the Federal Trade Commission additional power to crack down on dealers if it finds unfair practices.
Read more:
http://www.npr.mobi/templates/transcript/transcript.php?storyId=128672529
Parade Magazine
July 11, 2010
by Earl Swift
"Red, White, and Scammed: how the U.S. Army's Diann Traina and other young military personnel are getting
ripped off -- and what's being done to help them"
"So pervasive are the rip-offs -- and so troubling the debt incurred by military personnel as a result--that U.S. Department of Defense officials recently labeled the situation a threat to national security....
'There are a lot of people who see service members as cash cows,' says Holly Petreaus, director of the military program of the Better Business Bureau (BBB) and wife of Army Gen. David Petreaus, whom President Obama recently named to serve as commander of U.S. and NATO forces in Afghanistan. 'Go to any city with a big military installation, and there's a cluster outside the gates -- Fast Freddy's auto loans, pawn shops, check cashers.'
Perhaps the most obnoxious offenders are those who pose as all-American boosters. 'They put up big flags and say, "Welcome, sailors; welcome, soldiers," says Rosemary Shahan, president of the Consumers for Auto Reliability and Safety, a nonprofit auto-industry consumer watchdog based in Sacramento. 'But the bigger the flag, the worse their practices.'"
Read more:
http://www.parade.com/news/2010/07/11-red-white-and-scammed.html
USA Today
June 11, 2010
By Paul Wiseman
Auto dealers could see new financial regulations
"'Don't let the manager ... keep you from being able to read the documents, telling you just to
"sign here," ' says Rosemary Shahan, president of Consumers for Auto Reliability and Safety in
Sacramento. 'Take the filled-out forms and go sit down and ... pore over them. You may find that you
negotiated a good deal verbally, but what is in writing could be very different. ... If they switched the
terms on you, walk away.'"
Read more:
http://www.usatoday.com/money/autos/2010-06-11-financialreg11_ST_N.htm
Consumer Reports
How to avoid hidden traps in dealer-financed auto loans
June 11, 2010
"As Congress debates whether dealer-assisted financing should be regulated by a new consumer
financial protection agency, there’s still much you as a prospective car buyer can do to protect yourself
against predatory dealer practices.
Rosemary Shahan, president of California-based Consumers for Auto Reliability and Safety
(CARS), advocates avoiding dealer-arranged financing entirely."
CNN Money
Financial Watchdog: More disclosures, fewer hidden fees
May 18, 2010
By Jennifer Liberto
"'Yo-yo loans are illegal but nobody's policing it,' said Rosemary Shahan, president of
Consumers for Auto Reliability and Safety. 'It's up to state officials, but ask your state attorney general
how many times he's brought a case against an auto dealer.'"
Los Angeles Times -- Tribune News Services
This report was also printed in Stars and Stripes
May 14, 2010
By Janet Hook and Jim Puzzanghera
Financial reform pits car dealers against military
"'It's a fact that military personnel love their cars,'" Holly Petreaus said in a conference call with
reporters this week. 'Sadly, many of them end up paying far more for them than they should.' "
Consumer advocates also oppose the auto dealer exemption. Rosemary Shahan, president of
Consumers for Auto Reliability and Safety, a Sacramento, Calif., nonprofit advocacy group, said auto
dealers pack financing contracts with costly items such as extended warranties and insurance to cover
loan payments if the vehicle is wrecked. 'Even very sophisticated consumers get ripped off,' she said."
Read more:
http://www.stripes.com/news/financial-reform-pits-car-dealers-against-military-1.102677
Huffington Post
May 12, 2010
by Gary Rivlin
More Special "Loopholes"? The Pentagon Versus the Car Dealers
"'The Obama administration gets it,' Shahan said. 'They know you can't regulate auto lending
without regulating the dealers. The dealers control the flow of money and the terms.' To Shahan's way
of thinking, the Pentagon gets it as well. That's what makes this so potentially interesting a political
fight. The Department of Defense has thrown its considerable heft behind those insisting that
automobile purchases and dealer-assisted financing need to be part of any comprehensive financial
reform package.
'What the car dealers do the military is disgraceful,' Shahan said.
Talking with Shahan means learning a whole new vocabulary. In the New York Times, I wrote
about a soldier at Fort Hood who fell victim to what consumer advocates call the 'yo-yo deal.'"
Read more:
http://www.huffingtonpost.com/gary-rivlin/the-pentagon-versus-the-c_b_574406.html
New York Times
May 12, 2010
A Proposal to End Shady Car Dealers
By Gary Rivlin
"Even the Pentagon has weighed in, insisting that automobile purchases and dealer-assisted
financing should be part of any new financial legislation because low-income military people are
victimized in large numbers by shady car dealers that set up shop just outside many bases.
Officials say distractions caused by these bad auto deals could affect the readiness of the armed
forces...
For Matthew Garcia, a 25-year-old Army specialist stationed at Fort Hood in Texas, a car deal
gone sour has been “one more giant thing to worry about” as he prepares for a deployment to
Afghanistan as early as June.
Consumer advocates call it the “yo-yo deal.” In September, Mr. Garcia found a 2005 Dodge
Neon he liked at a used car lot near the barbershops, tattoo parlors and check cashing stores that
invariably line the main roads just outside any military base.
He agreed to a deal in which he would pay 19.9 percent interest on a $12,000 loan and signed
what he believed was a binding contract. He drove off. But several days later the salesman summoned
him back to the lot, Mr. Garcia said, to tell him the financing had fallen through.
He had signed only a conditional contract, he was told. If he wanted to keep the car, he would
need to put up an additional $2,500 in cash. Mr. Garcia refused, but by that time someone had blocked
his car so he could not leave. He said the dealership would not return his $1,500 down payment."
(Note: CARS contributed to this report, included putting the reporter in touch with Sgt. Garcia.)
Read more:
http://www.nytimes.com/2010/05/12/business/12dealers.html
Denver Post
Auto dealers fight regulatory reform bill
May 10, 2010
by Michael Riley
"But auto dealers are among the biggest originators of consumer credit in America, and the
exemption would blast a hole in the idea that sweeping regulatory reform should include some of the
most basic instruments connecting consumers to global finance — credit cards, auto loans and home
mortgages among them.
'Their practices have gone from bad to worse in these harsh economic times,' said Rosemary
Shahan, president of Consumers for Auto Reliability and Safety.
'They're telling you they're getting you the best possible rate, which is a joke. This is how they
make most of the money these days, through the financing,' Shahan said of new- and used-car
dealerships.
The Center for Responsible Lending recently issued a report calculating that the additional loan
markup by new- and used-car dealers cost consumers $20 billion in 2007 — and cost $318 million to
consumers in Colorado alone.
A new consumer regulator could require auto dealers to disclose the size of the markup or limit
it to a set fee. 'They tell you this loan is the best you can do,' said Shahan. 'It's not.' "
Read more:
http://online.indianagazette.com/articles/2010/05/10/news/doc4be8d500934a1724074057.txt
Car dealers may not win haggle with Feds
Delaware News Journal
May 30, 2010
By Jonathan Starkey
"'You can't police auto lending without policing car dealers who are the ones that negotiate the
terms of the loan,' said Rosemary Shahan, president of Consumers for Auto Reliability and
Safety. 'They have tremendous power in that transaction.'"
National Public Radio
December 9, 2009
By John Ydstie
Bill Exempts Auto Dealers from Agency Oversight
"But consumer advocates argue that the dealer's role in financing vehicles is about as passive as
a truck ad. 'Auto dealers are very active players,' says Rosemary Shahan, a consumer advocate and
longtime auto industry critic. 'They have a huge influence over the kind of loan that most people get
when they buy a car.'
In about 80 percent of auto sales, car dealers are not lending their own money; they're arranging
loans for their customers with banks or finance companies. But the deals bring in huge profits for
dealers, Shahan says, and there are a lot of ways for them to make money in the process.
'You fill out a credit application, and a dealer submits it to a lender. And what they're not telling
you is they get a kickback in exchange for raising the interest rate on your loan,' she says."
Read more:
http://www.npr.org/templates/story/story.php?storyId=121224829
