Thursday, November 21, 2024

Scott,
I know that you have used these examples to help people learn and to be aware but you have also just made every car dealer in the country a crook.

I grew up in a family that owns car dealerships and have been working here for a number of years. I have been in the finance and insurance office for 3 1/2 years and have never quoted insurance or extended service plans in a final payment without first explaining what it is and letting a customer decide the type of plan they want.

Secondly, because of disclosure laws, your father and friends would have had to sign separate forms for credit life, disability, and extended service plans giving them yet another opportunity to change their minds, and yet a third opportunity exists. You can cancel any one of those plans within a time period without any financial obligation.

Now, I'm not saying there aren't dealers out there doing exactly what you experienced and I'd never tell a car buyer to not be aware, but I think people should go looking for an honest dealership that exists on its integrity rather than to force a bad dealership to comply.

By giving the corrupt dealership your business, even if you get them to comply, still allows them to make money and stay in business.
--Heather

Answer
Heather,

Personally, I have yet to buy a car from a dealer that I considered being "totally" honest. Every situation I've been involved in, when buying a new or used car, has resulted in some type of attempt to get me to pay more.

You mention how people have to sign separate forms for credit, extended service plan, etc. However, it doesn't matter what extra papers you sign if you don't know what they mean or their true costs.

In my father's case, without my being there, he would have signed any documents they gave him! Sure, he has 72 hours to back out of the deal but it doesn't matter because he never would have reviewed the details.

I once attended a class in negotiation. The instructor told the class that when you enter negotiations you should always tell the truth, with one exception, when you're buying a car. He went on to tell us that his close personal friend is a car dealer and revealed many sales "techniques."

One "technique" he revealed was quite interesting. They actually bugged the desks where the customers worked with the salespeople. This way, if for example, a husband and wife were ironing out the final details of the purchase, the dealer could listen in on their conversation when the salesperson left the area.

I actually had a feeling this was happening one time when I was buying a car. The salesperson I was working with knew a lot about my thinking that day--coincidence, I don't think so!

My advice to everyone is that when you're negotiating for the price of a car, and the salesperson leaves the desk, turn to your friend and say, "If this salesman doesn't give me the car for $X then let's go down the street to the next dealer." Keep up the act even when nobody is there because you don't know who's listening.

Then, when you go in the back room for financing, it's round two for "some" dishonest dealers to take advantage. In fact, in October 2000, 20/20, did a piece called "The Car Dealer's Secret."

In this segment they investigated how some dealers would mark up interest rates by huge amounts!

This is how it happens. Car dealers don't know the rate you're qualified to receive. They submit your application to lenders who approve you for a certain interest rate. Then the dealer marks up the rate and splits the profit with the lender!

It gets worse. 20/20 also reported that there was evidence that black customers were twice as likely as whites to have their rates marked up!

So you see, I'd love to give my business to a "non-corrupt" dealer. I'm sure that there are honest dealers out there, but the problem is that I haven't found one yet and by the time I find out that they are dishonest, it's too late.

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