Kerr Law Firm, PLLC
Public Roundtables: Protecting Consumers in the Sale and Leasing of Motor Vehicles, Project No. P104811
I am a bankruptcy attorney and also very recently purchased a new car. I am not sure how prevalent it is, but I have had several bankruptcy clients complain of a dealer telling them to come back and sign a new loan because the "financing fell through." I am fairly certain this is not legal in Michigan. I of course tell clients that if that happens to them in the future to not actually go back and sign anything. I have had clients who were co-signers who felt coerced into cosigning loans for people due to high pressure tactics at the dealership (because they were willing to co-sign, realized what they were doing and decided they did not want to do it, but signed anyway). Additionally, when I purchased my car about a month ago, I was originally quoted a rate based on if I were to get the extended warranty. I did ask how much it would be without it, and given the cost it did not sound worth it so I opted not to have it. I was offered GAP insurance (which my auto insurer provides at minimal cost) and declined and same with credit life which was also declined. I didn't feel pressured to get any of those things, but if I had been an average consumer, I might have just signed everything without realizing the price of the warranty was worked in. Their rationale for including it is that most of their customers like it, however, that dealership is 50 miles from where I live so it isn't expedient or convenient to have my car repaired there other than for warranty/repair work that I am not paying anything additional for. What prompted me to ask about the pricing was the fact that the monthly payment they gave me did not jive with the number I came up with with the interest rate of the loan that I was given. Again, the average consumer might not think to ask about that, but I imagine some do. I have certainly had clients that knew and understood they have credit life insurance, and were glad to have it, some seemed to think it was mandatory. When I was getting my new insurance policy for my car, my insurance company claimed that auto lenders don't want a policy with larger than a $1,000 deductible with no explanation as to why, the dealer's finance person said that was not true (which I would expect it's not true because why should the lender care as long as they are paid if there is a loss). I also experienced a title issue, the car I purchased (a 2012 model) was traded for with a car from the dealer I purchased from, from another dealership within the state. Unbeknownst to me, for over a month, no one told me there was a title issue. But apparently the Manufacturer's Statement of Origin (MSO) was "lost." As a result, I still don't have the car registered in my name or the title in my name, and found out two days ago I wasn't driving legally without my plate. The dealer did apologize for not notifying me right away, but also said that when other dealers can't find the MSO, they will claim it is "lost" and then a new one has to be obtained from the manufacturer (which they finally accomplished). I informed the dealer that the Michigan Dealer's Manual states that the DEALER must possess the MSO or if it is an electronic MSO they must have an invoice. The person I spoke to did not seem to understand this and seemed to think only the manufacturer needs to have it at the time of sale. However, if I had been aware of this from the beginning, I'd probably already have the title. I certainly know now that the next time I buy a car, I will ask if they have the MSO (if it is a brand new car) or the title in their possession. It didn't occur to me to ask about it with a brand new car at a dealer for that manufacturer, but if I had asked I wouldn't have been driving illegally for over a month (granted part of that is a customer service problem).