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Crackdown on Car Dealer Scams: How to Not Be Victimized

January 10, 2014

Cohn Swartzon LLP

Car Tips

The Federal Trade Commission has started to crack down on auto dealers nation-wide in an effort to stop deceptive practices used to entice customers. This week, they have charged nine dealers nation-wide with using deceptive advertising; four of these dealership are in Southern California. All are charged with misrepresenting prices, finances, payment options and up-front payments in print, video and online advertisements.

Rainbow Auto Sales of South Gate and Casino Auto Sales of La Puente allegedly advertised in a mix of English and Spanish that they could purchase vehicles at specific low prices when the price was $5,000 higher. Norm Reeves Honda of Cerritos and Honda of Hollywood advertised that customers could pay no money up front to lease a vehicle, not disclosing that excluded substantial fees and other amounts. The ads also allegedly failed to disclose the many lease and credit-related term.

If you have bought or leased a car from any of these dealerships and believe that you have been misled through deceptive advertising, you may be entitled to compensation. If you are looking to buy or lease a car then it is important to do your homework before you just for an attractive advertisement. Below is a helpful checklist to follow when buying or leasing a car from a dealership:

New Car Shopping Tips Checklist:

• What can you spend? Have your bottom number and top number and stick to it!
• Be familiar with the make and the options you are willing to pay extra for.
• Know your credit.
• Find out what types loans are available in your credit range.
• Shop for a loan and find one with the lowest percentage rate.
• Resale Value. Does this vehicle have a good reputation with regards to resale value?
• Test drive a few similar vehicles of your choice. You may find the one you thought you loved doesn’t handle the way you’d like it to.
• Make a first offer. Be patient, and be ready to deny their counter if you are not comfortable.
• Don’t make an offer you are not willing to negotiate and be stern on your budget.