Steer around pitfalls of car deals

From the October 17, 2010 edition, The Atlanta Journal-Constitution, p. B4

Year after year, gripes about cars dealers — grievances ranging from dishonest dealers to lemons — top the list of consumer complaints on national surveys. Georgia is no exception.

“Complaints related to debt are catching up fast, but right now, the automobile remains at the top of the heap,” said Bill Cloud, a spokesman for the Governor’s Office of Consumer Affairs.

Buying a car can be dicey, especially in these tough economic times. Many dealers are struggling to keep their doors open, and consumers can pay a steep price if their dealer goes belly up.

“It is tough in the car business just like it is in any business,” said Jeff Wilkinson of Milledgeville, a used-car dealer for 45 years and an officer in the Georgia Independent Automobile Dealers Association. “You got to know who you are buying from. Everybody in the used-car business or the new- car business is not out to catch you.”

Even so, there are some potential pitfalls that Georgia car buyers need to keep in mind.

“As is”

Georgia has a lemon law covering new cars but not used cars. “The question we get most often in this office is the ‘as is’ question,” Cloud said. “Simply put, ‘as is’ means ‘as is.’ The vehicle can break down as soon as you take it off the lot, but it is still yours.”

That said, dealers do not have a license to misrepresent the condition of their cars.

“The fact that you are buying a car ‘as is’ does not mean that the people who are selling it to you can lie,” said Decatur lawyer Gary Leshaw, whose clients have included defrauded car buyers.

He recommends that car buyers take along a friend or colleague as a witness to avoid a “he said/she said” situation should a dispute arise.

No 3-day right of rescission

Many car buyers mistakenly believe that they have a cooling-off period to return a new or used car. “Many consumers think they have three days to return the car if something is wrong with it. In Georgia, they don’t,” Cloud said.

Car buyers need to do their due diligence up front, Wilkinson said. He advises consumers to check a car’s history through CARFAX or a similar service.

“Any decent dealer will assist you in getting one,” he said. “Also, take the car to your mechanic and check it out. If the dealer is scared of it, they won’t let you take it [to a mechanic].”

Spot delivery

This is a common practice in which a consumer takes possession of a car “on the spot” before the financing has been finalized. Customers with less than perfect credit can drive the car a week or two, even longer, only to learn that they will be socked with a higher interest rate than initially offered.

They can return the car, but their trade-ins may have been sold, their deposits may be nonrefundable, or they may have to pay for the miles they’ve put on the returned car.

The state’s consumer affairs office recommends that car buyers wait until financing is finalized to take possession of the car.

Trade-ins

In recent years, Georgia has seen a jump in the number of consumers complaining about dealers who failed to pay off loans on trade-ins. When that happens, consumers may find themselves on the hook for two car loans. “This happens more and more as dealers have gone belly up,” Leshaw says.

Among his clients is Gina Clemente of Grayson, who has pursued legal claims against the owner of now-defunct Metro Dodge of Snellville for more than six years.

Clemente ended up with two car notes after the dealership failed to pay off the outstanding loan on her truck as part of the trade-in deal. “This has been a total mess. At one point, I was paying more than $1,000 a month on two cars. I’m a single mom. What do you think that did to me financially?”

The Governor’s Office of Consumer Affairs recommends that consumers try to sell their used cars themselves and pay off their own notes.

The bottom line, Cloud said, is that a car is not an impulse buy. “I think patience is really the most important thing. Always be prepared to walk away from the deal. I guarantee you that the same Ford Fusion is going to be available at the Ford dealer five miles away.”