To avoid problems such as fraud, being taken advantage of or overcharged, before buying a new or used car, it is best to do a thorough investigation so that you are well prepared when sitting down to negotiate with a car dealer.
“Last year, vehicles were the fourth largest source of fraud complaints at the Federal Trade Commission, with almost 100, people who reported problems; and sometimes dealers harmed minorities in particular,” said Daniel Dwyer, attorney for the Federal Trade Commission/FTC’s Division of Financial Practices.
During the Videoconference: “Warning Signs to Watch Out for When Buying, or Financing, a Car”, Organized by Ethnic Media Services, subject matter experts discussed issues car buyers may encounter, whether buying a new or used car .
Attorney Dwyer said they recently filed a lawsuit alleging discrimination, unfair practices, and deception in several cases.
In the Bronx Honda lawsuit of 2020, they alleged that a car dealership of New York specifically told its dealers to charge African-American and Hispanic customers more when seeking financing for a car purchase.
The main advice
Attorney Dwyer said that because buying or leasing a car is expensive and complicated, the best advice is to view the process as a research project that begins before putting one foot with the dealer.
“The sellers will test you, and like in school, you will have a better performance, if you study for the exam”.
The first thing is to research the type of car you want, and decide how much you can afford.
“Sounds basic, but sellers will often try to sell you a more expensive car than you need or want”.
Once you decide which car you want, look around to see the prices and options in different car dealerships.
“We recommend calling the dealership to confirm that they have the vehicle available and to ask them to send the starting price in writing (the price with all charges and ), before going to the dealership”.
The starting price is what you would pay if you had a lot of cash to pay for the car in one show.
“This is important because some dealers announce a price and when you arrive at the dealership, they tell you that the vehicle is not available and try to sell you a different one , generally more expensive”.
Another important piece of advice is to study the advertisements carefully. because sellers can advertise prices that are not available to everyone.
“For example, they can give you a low monthly payment that it increases after a few months, or they can tell you that there is no down payment, but they still require it to give you the advertised price.”
It is also important to try to be pre-approved for a loan before going to the seller, otherwise arrange the financing options, it will be up to them.
And finally, advise before financing the purchase or rent a car, be sure to check your credit report at www.AnnualCreditReport.com, a site that provides you with a free report.
The price of a car can always be negotiated. (CR-Magazine)
Negotiate always
In short, he recommended starting by deciding how much you can spend on a car, see different dealers, ask for a starting price before leaving home, check your credit report and try to get pre-approved for a loan
.
Once at the dealership, you should know that many things are optional: the price can be negotiated, and not only focus on the monthly payments to be paid .
“Otherwise, they could end up with a car loan that is less expensive each month, but lasts and costs more.”
It is very important to know that the interest rate can be negotiated, and therefore approval must be obtained in advance.
“When it comes to products and services, or extended warranties or anti-theft items that make you look like they are mandatory, tell when you sell or not and make sure they do not appear in the final paperwork”.
The second most important thing is to know the history of the vehicle when it is used.
“For new cars, you should ask if they have been recalled for safety reasons that the manufacturer discovered”.
To obtain the history of the used vehicle, visit the site: https://www.vehiclehistory.com/ where you can see if the car was in an accident, its repair record and if it was salvaged.
“If there is a charge in this case to obtain the history of a vehicle”.
It is also essential to find out if a mechanic can check it.
And something very relevant is not allow during the purchase process hurry you up.
“You should never sign something without reading it and understanding everything for which you are signing to avoid being charged for things you don’t want”.
They should also not forget to ask if the financing was approved, and that it be in writing in the contract.
“Make sure you have a promise in writing when you give your used car to exchange for the one you intend to buy, that it will not be sold until you have the final financing, and also that they will return the down payment if the loan is not approved.”
Cars in poor condition
Elizabeth C. Goodell, supervising attorney for the Mid-Minnesota Legal Assistance organization, stated that they provide assistance to low-income people, who tend to buy used cars.
“Generally, we take cases such as when a consumer has lost his car due to repossession, and they have sued him for the rest of the money they owe”.
He explained that people stop paying for the car when it stops working, even when they have a five-year loan.
“We have been successful in the lawsuits because we show that the vehicle stopped working quickly after they bought it, a month or two months later”.
In In these cases, explains the lawyer, the financing companies do not want to go to court, they reach an agreement and withdraw the lawsuit.
The Attorney Goodell added as advice, do not trust a seller just because he speaks Spanish.
“There is an inclination to think that sales people who speak your own language are more trustworthy. Don’t assume that”.
And he cited a recent case of a client who paid $2,000 down payment, and financed the rest of the value of the car for $7000 at an interest rate of 20%.
“The car didn’t work right from the beginning, and when he withheld a payment because the dealer was taking a long time to fix it, they went to take the vehicle away from him. She brought the case to us and we won, even though the company told us that it was going to go bankrupt, but they had already opened a new business under another name.”
He also recommended visiting the dealer, taking note of the prices and models and going home and vCheck Online Kelley Blue Book to review the costs for the car you want, according to the year and mileage so you know if the price is reasonable.
“It is important to be prepared to negotiate and bring a friend to serve as a witness at the time of purchase”.
And he remembered that in each state, there is a legal assistance organization, to which to turn in case of problems.
Laws that protect
Joe Jamarillo, lawyer of the organization Housing and Economic Rights Advocates (HERA), based in Oakland, recalled that the California prosecutor sued the concessionaire Paul Blanco for allegedly deceiving his customers by making them pay thousands of dollars in extra products, telling them that they were required by law, when they were not.
“It is a very important lawsuit that we are following, but California has some protections contained in the Buyers Bill of Rights that requires that all charges on a car purchase be itemized in writing and that the seller provide a certified inspection report for used vehicles, and the used credit score.”
He added that there is also a law that requires that the contract be translated into one of the first 5 most used languages s in California, according to the language used in the sale.