Caught on Tape: Hidden Cameras Catch Car Dealers Breaking Rules
There are certain rules and regulations in place to protect vehicle buyers. For example, those who buy new cars which turn out to have lots of problems can contact a Los Angeles lemon law lawyer in order to pursue legal remedies.
While rules differ from place to place, there is one commonality: Unscrupulous dealers may try to engage in dishonest tactics to scam consumers or pad their profits. Just recently, for example, CBC reported on car dealers who were caught on hidden cameras potentially violating sales rules.
Car Dealers Caught on Camera Violating Sales Rules
According to CBC, dealerships in Ontario, Canada are required by Ontario law to be clear and truthful, to act with honesty, integrity, and fairness, and to demonstrate reasonable knowledge about trade-ins. However, hidden cameras revealed that dealers may have violated some of these laws in connection with pushing long-term loans on consumers.
The problem is, dealers are making the cars that they are selling seem more affordable by offering long-term loans without providing accurate information to consumers about how the loans will leave them struggling with debt down the road. Consumers could end up taking out loans that come back to haunt them when they owe thousands many years down the road on a car that is worth far less than what they owe at that time.
While four and five year loans were previously the standard in Canada, when the financial crash of 2008 and 2009 made it difficult for buyers to purchase new cars, dealers teamed up with banks to extend loans so buyers would have lower monthly payments for longer. As a result of this change, more than half of all new car loans for Canadian car buyers span at least seven years. Consumers end up thinking they can afford a car because the monthly payment seems low and the dealers benefit because consumers end up buying more expensive cars.
Hidden cameras caught dealers pushing these loans as the first and best option to consumers without explaining the downsides or risks, which may be a violation of their obligation to act with integrity, fairness, and honesty. In at least seven out of 10 dealerships that were monitored on hidden camera, the dealers pushed seven year loans on consumers even though those car buyers had not asked for a long-term financing option.
Sales people pushed consumers into loans claiming they'd pay nothing out of pocket, while other deals promised that trading in a car early wouldn't cause a consumer to face any financial loss. When car dealers pushed long-term loans, they also often pushed expensive upsells and add-ons that consumers would end up paying for over many years.
Consumers need to understand exactly what they are agreeing to in terms of financing and cannot count on dealers to be honest or to have their best interests at heart. Consumers should also know what their rights are if something goes wrong. A Los Angeles lemon law lawyer can provide help to consumers in understanding their rights in connection with vehicles that turn out to have serious problems.