A COUPLE TRICKS YOU CAN EXPECT FROM VALLEY CAR DEALERS
Recently, I’ve received more calls about car purchases gone wrong than any other subject. These are calls I did not receive before the economy began to suffer. But some car dealers have, unfortunately, resorted to taking advantage of the consumer in response to the recession.
I will tell you about two such practices. The purpose of both is the same: getting the consumer into the car, allowing her to drive it for a few weeks until she is attached to it, then calling the car back citing some problem, in the hope that the buyer will have become so attached that she will comply with the new condition, which usually means paying more money.
The first practice is informing the buyer, a few weeks after the transaction, that the dealer could not get financing from the usual sources, and that the buyer must come in to sign a new contract, which invariably will include tougher terms, usually regarding interest rate.
At first, dealers were doing this without the support of any language in the contract. But once lawyers started getting involved, the dealers started including language with the other boilerplate saying that the deal is contingent on the dealer finding appropriate financing. The language was usually too small to read and incomprehensible even if you could read it. Consumer lawyers got involved, claiming this practice was unconscionable and possibly fraudulent. So the dealers finally went to their lawyers who drew up a separate document that had the contingent language in bigger, more readable print and requiring the buyer’s initials. This document is probably enforceable in court. So when you’re handed a sheet calling for your initials, be sure to read it closely.
One more thing . . . If you decide to let the deal go and demand your trade-in back, and the dealer says it is already gone, know that the dealer has broken state law, which requires it to keep the trade-in available until all contingencies are met.
The second practice – less frequent and more justifiable – relates to your trade-in. The salesman will usually ask you a number of questions about the car, which you should answer honestly. But what about the things they don’t ask you about. Are you off the hook? No. That same list requiring your initials which I discussed above will also include a provision stating:
“I understand that the amount showing as Trade Payoff is my responsibility, an estimate only, and subject to verification by my lien holder for a minimum 10-Day payoff.”
This means that, if the dealer within the first 10 days discovers a problem with the car which it believes affects its value, it can rescind the transaction unless you pay for that difference in value. Since you probably made the deal only because of the amount you were getting on the trade-in, this can be a big problem. You may love the car enough to pay the difference, but before doing so, require the dealer to verify his assessment of the decrease in value.
It may be possible for you to handle this negotiation on your own, but I don’t advise it. The dealer will be more responsive to a lawyer’s letterhead.