Submission Number: 00074
Received: 2/21/2012 2:20:23 PM
Commenter: Robert Walker
Agency: Federal Trade Commission
Initiative: Public Roundtables: Protecting Consumers in the Sale and Leasing of Motor Vehicles; Project No. P104811
Attachments: No Attachments
My concern with car dealers is the lack of the federal governments enforcable policies.
Many, many car dealers still don't comply with the Red Flag Rule simply because they know that the FTC will more than likely never come to their dealership and examine it unless there is multiple complaints filed against it. There's no urgency to comply, and it seriously puts the consumer at risk.
There is also no licesing requirements when it comes to dealership personel. I could go to a dealership today and hand my non-public information over to someone there to obtain financing that was just released yesterday from prison for identity theft and is selling cars today and have no idea.
Why aren't F&I people held to the same standards as loan officers in the mortgage business? They to the exact same job, sell paper to the higherst bidding lender. They should at least have madatory back ground checks done prior to holding that posiion. Used car dealer are worse than new, and many of them don't comply with any of the laws that are currently on the books. I personally know of a dealership that hasn't given a consumer a privacy notice in over 2 years, a direct violation of the GLB Act simply because they ran out and never bothered to get more. I reported this to the FTC and DFI in Washington state and nothing has been done, he's still not using them.
I worked in the auto industry for 15 years in almost every capicity, ending with finance director for a large auto group here in Washington state prior to starting my own company, and I know every single angle that car dealers use when obtaining financing for the consumer, from over booking a car, which means adding more options to the NADA or Kelly booksheet than the car has to obtain more advance from the lender to changing just a few things on the credit application to ensure financing. Almost everything a dealer does in finance to make more money hurts the consumer in the long run. What most poeple don't understand is that all the money the dealer makes is carried over into the conumer's next purchase in the form of negative equity, or what the dealers like to call being either burried or upside down unless the consumer puts down a sizable down payment. When the consumer does put down a sizable down payment the dealer eats it up in the form of profit using many different methods. Consumers can spend years paying for the dealer that over books a car or over inflate the credit application because it never goes away until the car is paid off and not traded. Each time they trade they just add the negitive equity from the origanal purchase on to the new purchase and start the cycle all over again.
I pay cash for all of my cars and run them util the wheels practically fall off for a reason, I know all of the games that dealers play and won't fall victim to them.
Dealership compliance should be put in the hands of the states Departments of Finacial Institutions and they should have to comply with the same standards as mortgage brokers. They do the exact same job, broker credit applications. There's some cars out there now that cost as much as home, yet you can obtain auto finacning in less than a hour and it takes 30 days to get a mortgage, why is this? RV dealers sell RV's that cost more than some homes as do boat dealers, yet have to comply with same standards that auto dealers do, again why is this?
My company works directly with each of the dealers I mentioned above, and if you saw what I see when I go into a dealership you would be horrified.
The way transpotation dealers do business needs to change, they been doing it the same way for over a hundred years and it's time for them to catch up to today's standards that you hold other business models accoutable to.