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Why These Tips?
Every year the Consumer Federation of America and the National Association of Consumer Agency Administrators survey government consumer protection offices to find out what transactions generate the most complaints. The most recent "winners" were new and used car sales, auto repair, home improvement, retail sales, credit and lending, mail order, and auto leasing. Here are suggestions to help you avoid problems during these and other consumer transactions.
Car Repair, Buying, Leasing and Renting
Two web sites with general information on many of the topics below are www.Edmunds.comand www.lectlaw.com. Consumerworld.orghas links to many online resources. Click on shopping.
Car Repair
Choose a reliable repair shop recommended to you by family or friends or an independent consumer rating organization. Check out the repair shop's complaint record with your state or local consumer protection office or Better Business Bureau.
When you take the car to the shop, describe the symptoms.Don't diagnose the problem.
Get more than one estimate in writing.
Make it clear that work cannot begin until you have authorized it. Don't authorize work without a written estimate or, if the problem can't be diagnosed on the spot, insist that the shop contact you for your authorization once the trouble has been found.
Don't sign a blank repair order.Make sure the repair order reflects what you want done before you sign it.
Is the repair covered under warranty? Follow the warranty instructions.
Ask the shop to keep the old parts for you.
Get all warranties in writing.
Some car manufacturers may be willing to repair certain problems without charge even though the warranty has expired.Contact the manufacturer's zone representative or the dealer's service department listed on page 66 for assistance.
Keep copies of all paperwork.
Some states, cities and counties have special laws that deal with auto repairs. For information on the laws in your state, contact your state or local consumer protection office.
Car Repair, Buying, Leasing and RentingBuying a Car: New or Used
Comparison shop.
Research options
by reading Consumer Reports (www.consumerreports.org), Popular Mechanics (www.popularmechanics.com) and Motor Trend (www.motortrend.com) for performance, service, and safety ratings. Visit www.autoweb.com, www.autovantage.com, www.carpoint.comor www.autobytel.comto get quotes and purchase online.
Don't buy on impulse or because the salesperson is pressuring you to make a decision.
Read and understand every document you are asked to sign.Do not sign anything until you have made a final decision to buy.
Handle your car trade-in, purchase, and financing as three separate transactions to get the best deal on each.
Shop in advance for the best deal in financing at your credit union, bank or finance company.When you finance a car, the finance charge must be stated as an Annual Percentage Rate (APR).
Compare their Annual Percentage Rate and total finance charge with financing offered by the dealer.
Look at the total cost,not just the monthly payment.
Get a written price quote before you talk about your trade-in or dealer financing.
Don't take possession of the car until the financing paperwork is final.
Avoid high-profit, low-value extras sold by dealers, such as credit insurance, extended service contracts, auto club memberships, rustproofing and upholstery finishes. You do not have to purchase credit insurance in order to get a loan.See credit insurance.
Check the complaint records of car dealers with your state or local consumer protection agency or Better Business Bureau.
Read the "Buyers Guide" sticker required to be displayed in the window of the car.It gives information on warranties, if any are offered, and provides other information.
Do not be misledinto thinking that you have an automatic three-day cancellation period for all purchases. You can only legally cancel a few types of contracts.
If the "warranty" box is checked off on the "Buyers Guide," ask for a copy and review it before you agree to buy the car.
Car Repair, Buying, Leasing and Renting
Buying a New Car
Evaluate your needs and financial situation.
Test drive several models before you make a final choice.
Find out the dealer's invoice price for the car and options.This is what the manufacturer charged the dealer for the car, not counting any rebates, allowances or other incentives that reduce the cost to the dealer. You can order this information for a small fee from consumer publications you can find at your local library.
Find out if the manufacturer is offering rebates that will lower the cost.
Get price quotes from several dealers.Find out if the amounts quoted are the prices before or after the rebates are deducted.
Inspect and test drive the vehicle you plan to buy.
Dealer finance managers may try to "flip" your purchase to a lease,ignoring the agreed upon sales price and the promised allowance on the trade-in. Examine dealer documents carefully to make sure you are buying, not leasing, the vehicle. Look for a balloon payment and "base mileage" disclosures that indicate a lease instead of a finance contract.
Lemon Laws
States with new car "lemon laws" allow the owner a refund or replacement when a new vehicle has a substantial problem that is not fixed within a reasonable number of attempts.Many specify a refund or replacement when a substantial problem is not fixed in four repair attempts or the car has been out of service for 30 days within the first 12,000 miles/12 months. If you believe that your car is a lemon:
contact your state or local consumer protection office for information on the laws in your state and the steps you must take to resolve the situation;
give the dealer a list of symptoms every time you bring it in for repairs; keep copies for your records;
get copies of the repair orders showing the reported problems, the repairs performed and the dates that the car was in the shop; and
contact the manufacturer, as well as the dealer, to report the problem (page 66). Some state laws require that you do so to give the manufacturer a chance to fix the problem. Your owner's manual will list an address for the manufacturer.
Car Repair, Buying, Leasing and Renting
Buying a Used Car
Find a car that the dealer covers with a warranty by checking the "Buyers Guide" posted on used cars.Select a car with at least a 30-day, 100% warranty where the dealer agrees to pay all repair costs for covered items. Avoid "As Is - No Warranty" cars.
Choose a safe car.Look for the current safety inspection sticker required by your state. Call the National Highway Traffic Safety Administration toll-free number (1-800-424-9393) to see if the manufacturer has recalled the car for safety defects. If it has been recalled, ask the dealer for proof that the defect has been repaired.
Check prices at the library with the NADA Official Used Car Guide or used car pricing services. The Kelly Blue Book is on the web at www.kbb.com.
Some states have laws giving extra protection to used car buyers. Contact your state or local consumer protection office to find out what rights you might have.
Check with your state motor vehicle department to research the car's title history.Make sure the car is not a "lemon buy-back," salvaged, or wrecked car. Get the written mileage disclosure statement required by federal law from any seller and make sure it matches the odometer reading on the car. Check the title to the car before you sign on the dotted line.
Look carefully at the car in full daylight. Take it for a test drive. Have the car inspected by YOUR mechanic, and pay for a diagnostic test. Ask the mechanic if the car would pass a safety inspection so that you can ask the dealer to make repairs before you buy the car. Check out the frequency of repair records for used cars in Consumer Reports magazine that you can find at the library.
Buying from a Private Individual
Consider buying a used car from someone you know. You can get a reliable car for a lower price from the original owner who knows the car's service and repair record. But private sellers generally have less responsibility than dealers for defects or other problems.
Check with your state's motor vehicle department on what paperwork you will need to register a vehicle.
Make sure the seller isn't a dealer posing as an individual.That might mean the dealer is trying to evade the law and might be an indicator of problems with the car. Look at the title and registration. Make sure the seller is the registered owner of the vehicle.
Ask the seller lots of detailed questions about the car.
Car Repair, Buying, Leasing and Renting
Car Leasing
When you lease, you pay to drive someone else's vehicle. Although leasing can involve lower monthly payments than a loan, at lease end, you still have no ownership or equity in the car. The Consumer Leasing Act requires leasing companies to disclose standardized information to lease customers. In addition to the information disclosed on a standardized form, you should always ask for an itemization of the capitalized cost. Shop as if you're buying a car.
Negotiate all the lease terms, including the price of the vehicle. Lowering the lease price will help reduce your monthly payments. Get all the terms in writing. Ask about standards for wear and use
Dings that you may regard as normal wear and tear may be billed as significant damage at the end of your lease.Ask the dealer to give you an example of the early termination charges, for example, if the car is totaled six months after the lease is signed.
Expect to pay a substantial charge if you give the car up before the end of your lease. Most leases allow you to drive 12,000 to 15,000 miles a year. Expect a charge of 10 to 25 cents for each additional mile. Make sure the manufacturer's warranty covers the entire lease term and the number of miles you are likely to drive.
Get every item of equipment listed on the lease. Otherwise, you could be charged for "missing" equipment at the end of the lease. Before you sign the deal, take a copy of the contract home and review it carefully away from any dealer pressure. Be alert for any charges that were not disclosed at the dealership, like conveyance, disposition, and preparation fees. Make sure you got credit for any trade-in. You do not have an automatic three-day right to cancel a lease after you sign it.
When you finance a car, the finance charge must be stated as an Annual Percentage Rate (APR). There is no similar requirement for disclosing the cost of leases. "Lease rates" or "money factors" do not have standardized definitions and are not equivalent to an APR..
Car Repair, Buying, Leasing and Renting
Auto Service Contracts
Dealers may try to sell you an auto service contract or "extended warranty" when you buy a new or used car. A warranty comes with a new car and is included in the original price of the vehicle. A service contract is sold separately and is a promise to pay for certain repairs or services. Service contracts are usually high-profit add-ons, costing hundreds to more than $1,000.The service contract may duplicate warranty coverage you get from the manufacturer or dealer. Ask these questions:
Does the dealer, the manufacturer, or an independent company back the service contract?
What happens to your coverage if the dealer or administrator goes out of business?
How are claims handled?
Can you choose among several service dealers or repair centers or do you have to return to one dealer?
Is your car covered if it breaks down on a trip or if you move out of town?
Do you need prior authorization for repair work? Common repairs for parts like brakes and clutches generally are not included in service contracts. Watch out for exclusions that deny coverage for any reason and other terms that could cost extra when repairs are made.Failure to keep up manufacturer's recommendations for routine maintenance can void the service contract. The contract may prohibit you from taking your car to an independent station for routine maintenance or performing the work yourself.
Car Repair, Buying, Leasing and Renting
Vehicle Repossessions
When you borrow money to buy a car, you should know that:
The lender can repossess if you miss a payment or for any default (a violation of the contract).
The lender can repossess without advance notice.
After repossession, the lender might be able to accelerate, meaning the lender can require the borrower to pay off the entire balance of the loan in order for the borrower to get the vehicle back.
The lender can sell the vehicle at auction.
The lender might be able to sue the borrower for the deficiency if it sells the car for less than the borrower owes. This is true even in voluntary repossessions.
The lender cannot commit a "breach of the peace," for example, breaking into a home or physically threatening someone, in the course of a repossession.
If you know you're going to be late with a payment, talk to the lender to try to work things out.If the lender agrees to a delay or to modify the contract, be sure you get the agreement in writing. Some states have laws that give consumers additional rights. Contact your state or local consumer protection office for more information.
Car Repair, Buying, Leasing and Renting
Renting a Car
Federal law does not cover short-term car and truck rentals, but some state laws do. Contact your state or local consumer protection office for information or to report a complaint.
Collision Damage Waiver (CDW), in states that allow it, is an optional charge of $9 to $13 a day by the rental company. If you decline to pay extra for CDW, you accept responsibility for any damages. Rental companies also may sell loss of use and liability insurance. Check with your insurance agent in advance, so you do not duplicate coverage you already have.
If you pay by credit card,some rental companies will place a hold or freeze on your account during the rental period.
Carefully inspect the vehicle and its tires before renting.
Check refueling policies and charges.
Credit and Sublease Brokers
These are con artists who prey on people who have bad credit and who cannot get car loans.
"Credit brokers"promise to get a loan for you in exchange for a high fee. In many cases, the "broker" takes the fee and disappears.
"Sublease brokers"charge a fee to arrange for you a "sublease" or "take over" someone else's car lease or loan. Such deals usually violate the original loan or lease agreement. Your car can be repossessed even if you've made all of your payments. You also might have trouble insuring your car. |
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