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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.
--End--
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