American consumer watchdog Public Citizen has denounced “widespread corruption” at US car dealerships in its second broadside against car sales people since a report released in December entitled “”Rip-Off Nation: Auto Dealers’ Swindling of America.”
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According to Reuters, the latest attack was prompted by a speech on Saturday in which Alan Starling, outgoing chairman of the National Automobile Dealers Association, told its annual convention in Las Vegas that dealers deserve respect and had been unfairly tainted by “a few bad apples” in their industry.
“Unfortunately, some members of the media too often fixate on what’s wrong with our industry,” Starling said.
Reuters said the Public Citizen report claimed that customers are regularly manipulated throughout the process of buying a new car to pay more than the agreed price and financing rates due to an array of car dealership scams.
Dealers dispute many such allegations and argue that most customer frustrations from car buying stem from the fact that prices are negotiable and depend largely on an individual consumer’s bargaining power.
But in a statement responding to Starling, who complained that dealers sometimes feel like “a punching bag,” Public Citizen president Joan Claybrook reportedly said they get all the respect they deserve.
“If the industry truly wants respect from consumers, it should work with law enforcement to root out this undeniably widespread corruption,” Claybrook said, according to Reuters.
“Dealers also could help shed their shady image by leading the charge to clean up their own act and make purchasing a vehicle an open and honest process.”
Standing by the accuracy of its December report, Claybrook told Reuters that more than 500 people had contacted the group since it was published to say they too had been ripped off by dealers.
The tactics, all discussed in the report itself and in a segment that screened on the TV programme “Dateline NBC,” included everything from “shady financing deals to useless ad-ons to double-charged warranties,” Claybrook reportedly said.
“A shocking 90 consumers, who used a dealer loan to buy vehicles, told us that the loan terms and conditions were altered by the dealership without their consent or approval and that they were subsequently unable to secure terms that reflected the original contracts,” Public Citizen said, according to Reuters.
Citing one of many such examples, it said a woman car buyer in Carson City, Nevada, signed a contract to pay zero down, $250 a month and an interest rate of 6%.
“After she left the dealership, the terms were changed to $4,200 down, $425 a month and an interest rate of 11%,” Public Citizen told Reuters.
