You hear them on the radio and television every day. Some have outrageous advertisements and sales gimmicks. “Push, pull or drag your trade for a minimum of $ 4000”, “The best price in the world!” “Best Bumper-to-Bumper Warranty Ever – We Cover Everything.” “Reposado because today is dirty.” I bet you didn’t know that these ads can be and are very misleading and may be illegal.
According to Leslie Anderson, AAA, misleading advertisements and deceptive marketing from car dealerships has been on the rise in recent years. Car dealerships, due to a struggling economy, are turning to sales tactics and gray market ads. Many of these ads are borderline or even illegal in nature. With all the publicity in recent years of scams and illegal business activities by companies in every state, you would think that most states would have toughened their laws and started cracking down on bad car dealers. Only one state, New York, has really done anything.
Laws already exist on the books that make many of these advertisements and others illegal, but few states will even investigate these activities. In New York, if you make a Push, Pull or Drag sale, you will likely be fined. The thinking behind New York law is that if you promise someone a fixed figure for their vehicle, it should not be factored into the discount or markup of the newer replacement vehicle. This is misleading advertising. Yet I hear these same commercials, with even larger amounts promised on radio and television in North Carolina and South Carolina all the time. Then there is the question of express and implied warranties.
Express and implied warranties are covered by federal law. Every car dealer must have a federally approved warranty statement posted on the window. This is to show if there is a warranty and what is actually covered. This was done because there was too much of a discrepancy in the past with the car salesman blurring the line of what is actually covered and what is not. On a recent trip from North Carolina to South Carolina, I saw 11 used car dealerships that didn’t have them on their windows; in one, we discovered that they were in the glove compartment. When we asked the seller why it was not in the window, he said it was not necessary. In New York, all the car dealerships you drive or visit will prominently display them.
Then you have the usual lies – car dealers advertising a recall sale, cream puffs, etc. They lie about the origin of cars like in a recent Carfax ad. Oh that was just a little scratch on the fender (full repaint from a 50mph crash) or new upholstery (due to flooding and full submergence). These recall sales, like Repo Joe, make a media blitz and claim they have all the salvaged vehicles for one big buy. When, in fact, they probably don’t even have a repossessed car that’s for sale. Most auto dealers obtain their cars from local stores or auctions.
Regardless of what they claim, they most likely do not know the history of the vehicles. You can’t even trust Carfax 100% as many vehicles get repaired without a full salvage disclosure or even a repair history. A carfax report is only as good as the information actually entered into the system. Before you trust that Carfax or what the dealership says is auto history, listen to this: Tennessee attorneys Frank Watson and David McLaughlin claim that Carfax ads promise more than they can deliver. “Carfax does not disclose the limitations of its database,” says Watson. “People think they have a small insurance policy on their Carfax report, and it’s just not accurate,” says McLaughlin. Carfax is an online company that searches databases for a vehicle’s history, claiming to be “your best protection against buying a used car with costly hidden problems.” But, critics say, when it comes to many accidents, online reporting companies fall short. A class action lawsuit against Carfax claims the company does not have access to police accident data in 23 states.
This article should be a wake-up call to car buyers to be more alert to auto dealership scams, lies, and falsehoods. It should also be a red flag to states from Oregon to Florida that more must be done to curb bad auto sales tactics. Most car dealerships are not small family organizations. They are large, multi-billion dollar companies that will do anything to make a dollar. Even crossing the line or blurring what is legal and what is not. And according to a large merchant in Charlotte, North Carolina, who declined to have his name or dealership mentioned for obvious reasons: “It’s about that bottom line and if we get caught, that’s what our attorneys are for.” It’s a market that you must be careful with buyers: buyers must be careful and detectives too. “