Games Dealers Play: The Waiting Game
The Arizona Attorney General has obtained a consent judgment against a used car dealership for multiple acts of auto dealer fraud. The dealership was accused of selling cars with salvage titles without dislosing the status of the title, not properly disclosing financing terms, and making false promises that defects would be repaired. The dealership also sold vehicles that had hazardous defects and failed to comply with state warranty requirements.
Incidents of fraud by auto dealers are higher for lower priced cars, according to a recent study. The study, which was conducted by iSeeCars.com, evaluated millions of advertised vehicles and determined that the lower the price, the greater the likelihood that there was fraud relating to the vehicle's history or condition.
Car dealers like to brag about their relationships with multiple banks and finance companies, and they often imply that these connections help consumers get low interest rates. But, many consumers would be surprised to learn that car dealers frequently mark-up the interest rates. In many deals, the dealership makes more money by marking up the interest rate than they profit from the sale itself.
Managing Attorney Dan Blinn will be the in-studio guest on WTIC 1080 Law Talk on Saturday, June 28 at 3:00 pm. He'll be talking about how to avoid getting ripped off at the car dealership. Feel free to call in and ask any consumer law related questions.
Car rental companies owned nearly 2 million in 2013, and most of those rentals will be resold on the consumer market. Some rental companies have retail divisions that sell former rentals directly to consumers. Many of those cars can be a good deal, and many rental companies offer a decent warranty.
One trick played by auto dealers to boost their profits is to charge customers to etch the vehicle identification number (VIN) onto the windows of a car. The VIN is a 17 digit number that is unique to a specific motor vehicle. There is some evidence that car thieves are less likely to take a car with the VIN etched on the windows, and some insurance companies offer discounts for comprehensive insurance premiums if a car has VIN etching. So, this service may have some value.
Many consumers decide to trade-in their cars before they have paid off the old loan. When things go right, the dealership will obtain a pay-off amount from the bank or finance company and will make the payment on time and for the proper amount. The dealer gets the title, and the old car loan is paid off.
There are few things more frustrating to us than having to tell a consumer that they have a great claim against an auto dealer but that they waited too long to see a lawyer. Consumers frequently contact us about problems with their cars, and we handle many cases involving mechanical problems and prior wreck damage But, as part of our evaluation of every case, we also look at all aspects of the transaction, including the dealerships sales practices and the way in which the financing was handled. We often find that dealerships violated laws involving the sale or financing of motor vehicles, and sometimes those claims are even stronger than the claims for the original problem.