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July 2015 Archives

Is Leasing Really Fleecing? Part 2: Do Leases Include Interest Charges?

Thumbnail image for New cars.jpgThis is the second of nine articles in our Blog Series Is Leasing Really Fleecing? In our previous article on How Leases Work, we stated that "interest" was one of the factors in determining the amount of the monthly lease payment. The time value of money is a significant factor in the pricing of leases. But, interest does not work the same way in leases that it does in car loans. 

The Lemon Law: How Many Repair Attempts Before a Car is a Lemon?

Lemon Car.jpgConnecticut's Lemon Law gives important protections to consumers who bought a new car or truck.  If the manufacturer is unable to repair a defect   after a "reasonable" number of repair attempts, then it must either replace the vehicle or buy it back.  So, a common question that arises with respect to lemons is "How many repair attempts is reasonable?"   The Lemon Law, which applies to new cars in Connecticut, "presumes" that if a manufacturer fails to fix a defect after it has been given four opportunities,  it must replace or buyback the vehicle.  If the defect could cause death or serious injury, then two repair attempts will usually be enough.  Depending upon the circumstances of the case, a consumer might be able to prove that fewer attempts are reasonable.  Under other circumstances, a manufacturer might be able to prove that it is reasonable to permit more attempts.  Generally, though, four repair attempts will be enough.   There are a number of things that a consumer can do to help prove that a manufacturer should buy back or replace a vehicle:

Is Leasing Really Fleecing? Introducing a New Series

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Car Salesman.jpgPerhaps the most frequent question asked of us by our friends and clients shopping for a new car is whether they should finance or lease their next vehicle.  Car dealerships and manufacturers promote leases heavily in their advertisements, and some dealerships push lease deals pretty aggressively.  They point out lease payments are lower than the car loan payments. But, is leasing really cheaper on a long term basis?

Games Dealers Play: Scratch and Win Mailing Scams

Scratch Ticket.jpgOne particularly nasty scam favored by many car dealerships is the "Scratch and Win" promotion. In this scam, the dealer mails cards resembling instant lottery tickets to consumers. The consumer scratches the ticket and, not having fully understood the confusing and obscure disclaimers on the ticket, believes that they have won a big prize. The consumer must go to the dealership to collect the prize.

Fed Government Settles Interest Rate Discrimination Claim with Honda

We wrote a couple days ago about interest rate discrimination by car dealers. Auto finance companies permit dealerships to "mark-up" the rates, and that often results in women and minorities paying higher interest rates.

Interest Rate Discrimination By Car Dealers

Thumbnail image for Car and Money.jpgMost car dealers do not want consumers to know that they regularly mark-up the interest rate on auto loans. Many banks and finance companies will approve a credit application at a "buy rate" but permit the dealership to charge a higher "contract rate." The bank will share the extra money that the consumer pays in interest. So, the consumer has a higher car payment, and the car dealership makes a higher profit. This is one of the reasons that car dealers are so eager to handle the financing when selling a car.

When a Boat is a Lemon

Boating season is very short in New England, and recreational boaters want to spend as much time on the water as possible during the summer months. So, it can be very frustrating when a boat is being subjected to multiple repairs. Fortunately, consumers do have some options when they purchase a boat that turns out to be a lemon.

Dealer Conveyance Fees Impacted by New Law

Car and Money.jpgWhen the clock ran out on the Connecticut General Assembly's 2015 legislative session on June 3, many high-priority bills had not received final votes. A special session was called to consider revising the state budget and to address other issues. The legislature approved, and Governor Malloy signed, a  massive "Implementer Bill" on June 30, 2015.  The new law includes provisions that will dramatically change the way that car dealers charge consumers for dealer conveyance fees.

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