Public Roundtables: Protecting Consumers in the Sale and Leasing of Motor Vehicles, Project No. P104811 #00002 

Submission Number:
Rick Hoss
Bob Hoss Dodge Chrysler Jeep
Initiative Name:
Public Roundtables: Protecting Consumers in the Sale and Leasing of Motor Vehicles, Project No. P104811
Dear Sir/Madam, March 10, 2011 As a Franchise Dealer of 30 years I can assure you due to all of the existing State, Federal and lending laws that currently regulate Franchised Dealers we are in no way predatory to our customers. We offer a service that requires usually up to 5 lenders or more to compete for our customers business. We are further dictated by lenders as to the amount of fees, unusually capped at 1 to 2 percentage points above buy rates and further restricted to the amount of products, service contracts, gap insurance, add-ons, etc. What you need to be looking at are not the Franchise Dealers, which are already over regulated, but the Buy Here Pay Here and Second Chance Credit Independents who buy junk trade-ins wholesale and over charge the public on the sale price plus very, very high finance rates and many times an unsafe vehicle. The independents will argue they provide a service that bank, captive lenders (Alley, GMAC, FMC, etc.) and franchise dealers do not provide. While this is true independents get away with brutally over charging the public and especially the most economically challenged. They have the customer trapped in a system they can’t get out of owing thousands on a vehicle well over its market value. Example, A Independent buys, at wholesale, a rough vehicle for $1,500. A shopper with bad credit, who has no access to credit, finances the vehicle at 20% with $800 down payment paying a $4,000 selling price. The independent has, as they phrase it, “$700 out on the street”, but the customer already owes $3,200 before the first payment is due. If the car needs repairs the independents, at their shop, add the repairs to the loan or trade them into another vehicle. The customer is caught in an endless cycle usually ending in repossession. The repossessed vehicle now, assuming the customer made 1 year of payments, has made a huge profit. The independent dealer now has a vehicle for $0 dollars cost ready to start the process all over again. Really Ladies and Gentlemen who do you think you need to regulate? The New Car Dealer Franchise system is fair and fine, please refrain from making the business any harder than it already is. I sincerely hope this is not an attempt to lay out more land mines and trip wires for the trial lawyers to feed on. Thank you, Rick Hoss