Hello Eveyone,
Evelyn here,
with an comsumer advisory from AttoneyGeneral Bill McCollum on the danger to comsumer from deceptive auto dealers.
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January 10, 2008
CONSUMER ADVISORY –the Attorney General Warns
About the “Too Good To BE True” Auto Sales.
McCollum: 'Don’t let misleading auto
advertising take you for a ride!'
TALLAHASSEE, FL – Attorney General Bill McCollum today issued a consumer advisory warning Floridians about potentially misleading auto advertisements. The Attorney General cautioned consumers who may be buying automobiles during any new year’s sales to watch out for advertisements that may not be entirely accurate and high pressure sales tactics or scams that may unfairly ensnare consumers in unfavorable purchase agreements. Common misrepresentations include promises that dealers will pay off a consumer’s lease or loan and claims that consumers can be pre-approved for any vehicle of their choosing.
"Floridians who may be trying to take advantage of sales during the first month of the new year should be wary of any deal that sounds too good to be true," said Attorney General McCollum. "Buying an automobile is an important and often carefullyplanned decision and it is imperative that consumers are not preyed upon by unscrupulous advertising or salespeople who are more concerned about making a sale than looking out for the customer’s best interests."
The "We'll pay off your loan OR lease no matter how much you still owe!" claim is deceptive because consumers rarely realize that if the dealer pays off the debt, the consumer will then owe that debt to the dealer and will often receive a steeply de-valued price for their trade-in vehicle. Leases and loans are contracts and cannot be dissolved without steep penalties, which are also assumed by the dealer and charged back to the consumer. To mask the higher total cost, dealers may extend the term of the new loan to keep payments low, but will ultimately benefit from the end cost. To avoid getting caught in this trap, consumers should wait to trade in their automobile until they owe less than the vehicle’s value.
The pre-approval sale is another potentially misleading device that specifically targets individuals concerned about their credit score and the impact it could have on financing options. Consumers often receive advertisements letting them know they have been pre-approved for a loan amount. A dealer can then manipulate the consumer into purchasing whichever vehicle provides the best benefit to the dealer because the consumer believes he or she has no additional financing options. A third common advertising gimmick is the "Super Sale," which occurs when an auto dealership hires a third party sales team to conduct the entire sale. The outside company typically increases the cost of each vehicle and then calculates new, lower payments based on the longest possible term with a deceptively low and enticing down payment. There is no real discount available and consumers may even end up paying more than necessary for the vehicle.
The Attorney General's Office regularly investigates allegations of misleading or deceptive advertising or business practices which are prohibited under Florida’s Deceptive and Unfair Trade Practices Act. Recent settlements related to auto sales include a November 2007 agreement with Bill Heard Chevrolet that resolved concerns about the company’s print and radio advertisements and direct mailers. The company agreed to alter its marketing practices and improve the process for addressing consumer complaints.
To encourage consumers to make wise decisions when purchasing a new or used automobile, the Attorney General offered the following suggestions:
- Be cautious of extremely low monthly payments, as these may indicate a longer payment term. If possible, focus on the full price of the automobile.
- Pay attention to the actual terms of the sale rather than the "deal"
being offered by the dealership. Ask questions about any terms that seem excessive or unnecessary.
- Salespeople may offer various incentives (cash back, "customer loyalty" discounts, special financing deals, etc.) that can be worth
several thousand dollars off the new car price. Compare incentives and use them as a negotiating tool if possible.
- Do research on how much your trade-in is worth. Some salespeople may try to lower the actual value of the trade-in during negotiations.
- Do not make an emotional care purchase or let a dealer know you are purchasing a car because you absolutely must.
- Know your credit score and what kind of financing options should be provided to you because of your score. Avoid giving this information to a salesperson before a price is agreed upon.
- Investigate any and all available financing options rather than simply accepting the financing terms provided by the dealership.
Consumers are encouraged to contact the Attorney General’s Lemon Law program if they believe they have been sold a "lemon." Florida's Lemon Law applies to new or demonstrator vehicles sold or long-term leased in the state of Florida. When consumers buy or lease a new or demonstrator motor vehicle, the selling dealer or lessor is required to provide a copy of the "Consumer Guide to the Florida Lemon Law." This publication explains consumer rights, gives steps to follow to resolve problems and contains a toll-free number for the Lemon Law Hotline and a form the
consumer can use to notify the manufacturer of chronic defects and time out of service for repair. Last year, the Florida Lemon Law Arbitration Program surpassed the $350 million mark in refunds and replacements for consumers who bought incessantly defective new vehicles. Since 1989, the Lemon Law program has produced refunds or replacement vehicles for more than 13,300 consumers. More information is available online at http://www.myfloridalegal.com.
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Evelyn out.
