Financial Reform: Five Reasons Why We Need Protection From Car Dealers

[rumpel]

BNET (CBS News)

By Alain Sherter | Jun 17, 2010

Auto dealers have a simple request for consumers: Trust us. That’s the upshot of car vendors seeking exemption from oversight by the proposed Consumer Financial Protection Agency.

Anyone up for some rust-proofing? Me neither. For a few simple reasons, sheltering dealerships from new regulations against predatory lending is a lousy idea:

* Car loans are big business. After mortgages, auto finance is the second-biggest area of lending in the U.S., with roughly $850 billion in outstanding balances. That’s bigger than the credit card industry. Although dealers didn’t experience the same loss rates on subprime loans during the credit bubble as mortgage firms, they did lower their underwriting standards (see below chart).
* Car buyers often get ripped off. Surprise! The Better Business Bureau and state regulatory authorities get more complaints about auto dealers, including their financing practices, than any other industry, according to the National Consumer Law Center. Common tactics include tacking “yo-yo sales,” in which dealers change financing terms after the customer has bought a car; tacking on unnecessary fees; and steering buyers to higher-cost loans.

more at:
http://industry.bnet.com/financial-services/100010096/financial-reform-five-reasons-why-we-need-protection-from-car-dealers/

[supernova]

1. I will never buy another new car again.

I will always buy from a previous owner. The car can be about 3-4 years old low miles; they will have taken the financial hit. I can pay a reasonable price for the car ... in cash.

The thought of sitting down with a dealer again is anathema to me. I hate the way they treat women.

[Kalun D]

2. Most dealers Rip Off

and ownership is becoming more consolidated, "Auto Nation" is a huge owner.