We have handled a number of undisclosed damage / wreck cases recently.  These cases are not confined to any specific areas of Texas, though we tend to see more cases in the Dallas-Fort Worth and Houston areas (perhaps due simply to larger populations).

Generally, car dealers have told our clients that a car or truck had never been wrecked when the vehicles had prior damage and/or repairs.  We see situations in which car dealers purchase cars at auction, and are notified by the auction before purchase that the cars have frame damage or unibody damage.  This information at times appears on Carfax and/or Autocheck reports, and the timelines in those reports can assist in proving a car dealer’s knowledge of prior damage.  Under Texas law, a consumer might be able to recover diminished market value to the vehicle, cost of repairs, mental anguish, punitive damages, and attorneys’ fees.

Beware whenever a car dealer represents that a car or truck has never been wrecked.  Secure Carfax and Autocheck reports, and hire a mechanic or inspector to inspect the vehicle.

Related articles by Zemanta

• Carfax to offer recall info for GM customers (seattletimes.nwsource.com)
• VIN Hunter Pro Combines the Power of CARFAX, Black Book, and NADA on the iPhone (prweb.com)

We have seen a number of cases in which a dealer tells a consumer that a previously-wrecked vehicle has not been wrecked.  We have also seen situations in which a dealer tells a consumer that a car had experienced just minor damage from a prior wreck, when in fact the car had been “totalled” and had a salvage title.  However, there appear to be significantly fewer situations in which a dealer surreptitiously sells a “chopped car.”

A “chopped car” is a car that has been constructed by taking two badly damaged cars and joining them together.  This allows the dealer, or the “chop shop,” to take otherwise potentially near valueless vehicles and make a decent profit.  Stay away from chopped cars.  A chopped car is a “2-for-1″ deal that you can afford to pass up.

Many car dealers have recording equipment, usually in the F&I (finance and insurance) person’s office, in order to record everything that happens.  When you meet with a “finance manager,” everything you say and do, and hopefully everything that the F&I person says and does, might be recorded by audio and/or video.  This is great evidence if a dispute later arises, as long as the dealer does not destroy the recording.  However, a dealer might be able to immediately play back the video or audio, or monitor recording while it is happening.

If there is a chance that a car dealer can monitor your every move and word at the dealership, assume that you are always being recorded.  If you are inside the dealership, don’t say anything, even during a telephone call with a friend or relative, or to anyone that might have gone with you to the dealership, unless you want everyone at the dealership to know about it.  If you need to say something in private – go outside.  Get away from the building and any apparent exterior cameras.  While this might sound like paranoia, saying the wrong thing at the wrong place or time could cost you thousands of dollars.

Related articles by Zemanta

• A Man’s World at the Car Dealership? (blisstree.com)

What does it mean when a car salesperson gets a “bump” from you?  It does not mean that that two of you are so excited that you have decided to dance.  Instead, it refers to a point in the car negotiation process, or the verbal dance between you and the dealership.  When a salesperson gets a “bump” from you, he or she has simply gotten you to raise the price you have offered to pay for the car.  Be sure that you really want to give that bump, and do not be pressured into doing so.

You have been walking the lot with the salesman for 45 minutes, and you have actually driven one vehicle.  The salesman keeps pushing you toward a vehicle that really does not meet your needs, but for which he says that he can get you a “great deal.”  After another hour-an-a-half of prodding, and two more test drives, you have been beaten down.  You finally begin to believe that what appears to be the salesman’s favorite car is actually the best deal on the lot.

The car is not the color you want, but you rationalize that your favorite color is really too flashy for your age.  The car only seats 4, and you have a family of five.  Well, your family can always take two cars, right?  The model year is two years ago, but the car is still “new,” right?  Oh, and then there is the fact the the salesman can get a “spiff” or a bonus for selling that particular car to you.  What?  You didn’t think about that, because the salesman did not tell you.

A “bonus car” is one for which the dealer will pay a salesperson a “spiff” (usually cash) or a bonus.  There is usually a reason that the dealer needs to pay a bonus.  The car is “new,” but the model year is two years old.  The car has a horrible Consumer Reports rating.  The car was previously wrecked and repaired.  The list of potential issues is long.

If a car salesperson keeps steering you (no pun intended) toward a particular car or truck, ask her (and yourself) some questions.  Its always great to see someone get a bonus, but it should not be at your expense.

Most people expect, or at least hope, to be treated well by a car dealer.  After all, if you show up at a dealer, you are likely to spend thousands of dollars.  I have heard people complain about not being given anything to drink when negotiating a sale.  This is a small but valid complaint.  But, beware of the all-too-quick offer of a soft drink.  It might lead to the purchase of an unwanted vehicle and overpriced add-ons.

I love the new-car smell.  However, I really don’t love the new-car payment book smell.  I have never been to a dealer and been sold a car based on the look and feel of a payment book.  Car salespeople understand that, unfortunately, many of us purchase based upon feelings and for various psychological reasons.  When we first appear at a dealership and are immediately offered a Coke (or a Dr.Pepper, Dasani, Mountain Dew, or . . . whatever you fancy), most decent-thinking people feel as if they owe something to the salesperson.  There are two words to remember – You Don’t.  A salesperson is there to sell a car to you and make a commission.  Just because you were given, free-of-charge, something to drink does not mean that you are obligated to do anything.

Be courteous, and beware.  Two bites of fruit in the Garden of Eden led to a host of problems for humanity.  One Coke could lead to a debt beyond your means and a car that you might not have wanted.

Do you remember your first set of keys?  Were you fortunate enough to have keys to your own car, or were “your” car keys really your parents’ keys for their “not so cool” car?  Whichever was the case, your car keys represented a lot of things.  Freedom.  Mobility.  The ability to “get away.”  Car dealers understand these things, and they can use them to your disadvantage.

The longer a car dealer keeps you at the lot, the more likely it is that you are going to buy a car.  You begin to feel committed to the salesperson.  You feel like you have invested so much time in the buying process that you should complete it.  These are valid feelings, but they do not help you make an intelligent, economic decision.  Nevertheless, car dealers play into these feelings.  If a car dealer cannot use more subtle ways of keeping you at the dealership until the deal is closed, they might “throw your keys on the roof.”

If you have driven to the dealer a vehicle that you might trade, a car dealer might ask for the keys to the vehicle.  The salesperson will tell you that she needs to get an appraisal of your trade-in.  She will then hand the keys off to an unknown employee, who in turn disappears.  If it seems to the salesperson that negotiations are not going well, your keys will be magically “lost.”  The car dealer has effectively thrown the keys on the roof, so that they cannot be found.  There was a time when some dealers would literally throw the keys on the roof in order to “lose” them.  Now, dealer employees might say to each other “put them on the roof” as a way to say, “Let’s play keep-away with the keys.”  At this point, the dealer will pull out every sales technique in the book to sell you a car.  You continually ask for your keys only to be told, “We are still looking for them.”  You are stuck.  Your car is at the dealer, and you have no way to leave.

How do you avoid this situation?  Do not give your keys to anyone until you have a written deal, including terms for your trade-in.  This might seem cumbersome, but you need to avoid allowing a dealer to control when you can leave.  Otherwise, you might make a car-buying decision that you will later regret.

There was actually a case in the Dallas-Fort Worth area years ago in which a hearing impaired person was allegedly treated this way.  Here is the Fort Worth Court of Appeals opinion (later reversed by the Texas Supreme Court) -

881_S_W_2D_843_1-23-10_1042

Car salespeople want to make sales, but they cannot close deals without a steady source of consumers.  I have talked to more than one car salesman who quit a position at a dealership due to the dealership’s failure to commit sufficient funds to advertising.  When a dealer does not provide a sufficient, steady flow of customers, car salespeople must use other avenues to find buyers.

A “bird dog” is a person who will send customers to a car salesman.  Bird dogs are many times paid by salesman for referrals.  Thus, bird dogs might not be the best source of advice about a particular dealership.  How do you spot a bird dog?  Well, if a person seems far too excited about referring you to a particular dealership or salesperson, and even offers to go with you to assure the sale, be wary.  You might become the bird dog’s next prey.

What in the world is a “be-back?”  The term dismays most car salespeople when they hear it.  It means that they might not get a commission.  It means that they might not meet a sales quota.  It means that they might not bonus that month.

A “be-back” is a consumer who says that he will “be back” later, the next day, the next week, when the Texas Rangers win the World Series, whenever.  A car salesperson wants to sell a car or truck to you not just today, but right now.  Those customers who promise to come back likely never do, or so believe most car salespeople.

There is little a dealer can do when you say that you need to leave to eat lunch, and that you will “be back” afterward.  However, many dealers will send you to lunch in a dealer vehicle.  This assures, assuming that you are not a car thief, that you will truly “be back.”

Don’t be pressured into buying a car.  There will always be plenty of cars, plenty of dealers, and plenty of salespeople when you have done your homework and are ready to buy.

Many consumers care about only one or two things in a car transaction.  Perhaps it is the price of the car being purchased.  Perhaps it is payments.  Or, a consumer might be most concerned about the value she will receive for her trade-in.  A consumer that falls into this last category is an “allowance buyer.”

An allowance buyer is most concerned with the allowance he will receive from a car dealer for his trade-in.  The consumer has a number in mind for the trade-in and will not go below that number.  Car dealers love allowance buyers.  Car dealers understand that they make profit a number of ways in a transaction, including:

• Manufacturer rebates
• Special incentives
• Warranties
• Undercoating
• Window etching
• Interest rate or yield spread premiums
• The price of the car being purchased
• The price of the car being traded

A car deal involves a number of moving parts, made up of products and services with attached varying dollar amounts.  Consumers have knowledge about only some dollar amounts, and car dealers use that to their advantage.  If a consumer cares about only one of many dollar amounts in a transaction, such as the price the consumer will receive for the trade-in, the dealer can jack up and/or change dollar amounts attached to other items.  It is like a magician coaxing you to watch one hand while she does something with the other.

Car transactions are complicated, involving various costs and fees attached to different products and services.  Don’t get caught in the trap of being simply an allowance buyer.  Look critically at every expense in order to reach a “whole” transaction made up of a number of “good” parts.