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.
GAP protection covers the scenario where a motor vehicle is totaled in an accident or stolen and not recovered. Insurance will pay for the retail value of the car minus the deductible. If that is not enough to pay the car loan, the consumer is responsible for the difference. If a consumer has GAP protection, they theoretically will not have to pay that difference (but, read on - many consumers learn that they do not have the protection that they think that they have). The term "GAP", which evokes the image of a gap between the insurance payout and the outstanding loan balance, is sometimes used as an acronym for product names such as "Guaranteed Asset Protection" or "Guaranteed Auto Protection".
When we evaluate a potential client's contract documents, we always check to see whether the contract accurately shows the amount paid as a down payment. A few weeks ago, we discussed the problem of some car dealerships not crediting the full down payment to a vehicle purchase. . A very different problem - and one that we saw far more frequently - is when a contract shows a higher down payment than the amount that the consumer paid. For example, a consumer may give a dealership $1,000 down, but the contract may show that the consumer paid $3,000. Sometimes, the dealership is quite open about this. We have even seen dealerships advertise that they will give consumers more "credit" for the down payment than the amount that they actually pay. Other times, the consumer has no idea that the down payment was inflated.