A Wisconsin couple has sued an auto dealership for promising them that a used Mazda 5 station wagon could tow a trailer. The couple wanted to tow a trailer in order to transport an electric wheelchair. The lawsuit alleges that the dealership repeatedly assured them that the vehicle could tow the trailer, and it even installed a hitch for that purpose.
Many of our clients tell us about conduct by auto dealers that is quite clearly criminal. Many dealerships regularly engage in forgery, fraud, and outright theft of money.
This is the first of nine articles in our Blog Series Is Leasing Really Fleecing?
One 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.
Most 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.
A recent article in Consumer Reports states that Certified Pre-Owned cars can cost hundreds or even thousands dollars more than other comparable vehicles.
VIN Etching may be the most profitable add-on that a car dealership offers. Consumers may spend perhaps $100 or more for a service that costs the dealership perhaps $10 - $20 to perform. And, because Connecticut state law permits the dealer to preprint the charge directly on the contract, many consumers do not even notice that they have been charged for this service.
Last month, a Connecticut Superior Court judge found that A Better Way Wholesale Autos in Naugatuck, CT had committed unfair trade practices when it to told a consumer that she had to buy various extras in order to finance her car purchase and then refused to refund her deposit when she refused. An arbitrator has just reached a similar ruling in a new case.
A Connecticut judge has issued a decision finding that A Better Way Wholesale Autos of Naugatuck, Connecticut engaged in unfair trade practices and committed auto dealer fraud when it refused to refund a deposit to an Manchester woman. The court awarded her a refund of her $2,500 deposit plus punitive damages of $7,500. The dealership is also responsible to pay the consumer's attorney's fees.
In the typical Yo-Yo Scam, a car dealership tells the consumer that she is "all set" and that her credit application has been approved. She drives home in her new (or pre-owned) car and shows it off her to her friends, family, and co-workers. About a week later, the car dealer calls and says "There is a problem with the bank. Your application was not approved."