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Shopping for a car can be exciting. But wading through ads and promotions from car dealers, and deciding how to pay, can make it stressful.

If you decide to finance the car, you have two options: get a loan from a bank, credit union, or finance company, or get dealership financing. Either way, the financing application requires an honest listing of your monthly income and the amount of your down payment.

But not all dealers play by the rules. In a case announced today, the FTC alleges that Tate’s Auto Center of Winslow, Inc. — as well as related dealerships in Arizona and New Mexico and their owner and manager, Richard Berry — used deceptive advertising to get people in the door, failed to disclose required financing terms, and frequently falsified consumers’ income and down payment information in an effort to close the deal. Instead of using the income information people gave, Tate’s often inflated numbers to make it look like people had higher monthly incomes.

The next time you’re deciding how to pay for a new set of wheels, take your time.

  • Carefully read the documents, especially the credit or lease contract.
  • Ask to review your final financing application. Make sure it shows your real income, down payment, and other personal information.
  • Be sure all the terms, including the price and the financing, are what you agreed to. Understand them before you sign.

     

     

    For more information, see Financing or Leasing a Car and Are Car Ads Taking You for a Ride? If you think a dealership has broken the law, the FTC wants to hear about it.

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LAURENCE F MILLER
August 01, 2018
Excellent article. Thanks for sharing it!
gmaloves4
August 02, 2018

In reply to by LAURENCE F MILLER

YES!! I GET PHONE CALLS AND LETTERS STATING THAT MY " WARRANTY " ON MY NEW CAR , I HAVE THE LETTERS, IS ABOUT TO RUN OUT UNLESS I CONTACT THE COMPANY. I DO. USUALLY WHEN I TELL THEM J HAVEN'T HAD A CAR IN MY NAME FOR ALMOST 15 YEARS THEY JUST HANG UP. HOW CAN I STOP THIS
Darryn
December 31, 2019

In reply to by gmaloves4

This is one of those robocalls. Their car warranty is bogus. They are trying to convince you to give them a credit card, so they can steal you blind. You got the better end of that deal.
fonhiulam
August 02, 2018

In reply to by LAURENCE F MILLER

Excellent article. Thanks for sharing it!
DDWA
August 01, 2018
Sounds just like the dirty tricks they used to start the mortgage crisis. Lie, lie, lie while the prices are going up, then BIG crash when home prices start to fall and people can't afford to keep their homes.
Len
August 03, 2018

In reply to by DDWA

You realize these are accusations only, does any responsible person believe that car dealers are really honest? The mortgage crisis grew out of lenders fraud and consumers greed
Maxi
August 01, 2018
CENTRAL AVE NISSAN, YONKERS, NY DECEPTIVE AND DISHONEST
Tell Me the Truth
August 01, 2018
Some dealerships have been doing this for years. FINALLY! The spotlight has been turned on. Thank you
Purplelock
August 02, 2018
I got a car through a local dealer, and found out later that there had beena front end collision. The a.c. has never worked, and they fixed it? Also, they told me the finance company would not allow a warranty on it. The company that did the financing said they would gladly have added a warranty to the financing. You have to be very careful!
Sueann
August 01, 2018
the federal government need to investigate these crooked financial institutes that cheat consumers when they finance cars, special the consumers that have bad credit these are the consumers who gets the bad deals and pay double the amount of the loan, financial instutions such as SANTANDER CONSUMER,USA this financial instution should have been shut down a long time ago, for freud and over charging consumers double the amount of their loans for a vehicle, and when the loan is paid in full they try to say the loan amount is more money ,and the consumer owe more money, u have to get attorney help , because this Santander Consumer, usa don't know why they have not been shut down, please investigate this crooked business!!!
Neveragain
August 01, 2018
Don't go to Kia of Alhambra in California!
AJ
August 01, 2018
Have you heard anything about the businesses that are offering extended warranties? Are theses legit?
ctressler
August 02, 2018

In reply to by AJ

A service contract is a promise to perform (or pay for) certain repairs or services. Sometimes called an "extended warranty," a service contract is not a warranty as defined by federal law. A service contract may be arranged at any time and always costs extra; a warranty comes with a new car and is included in the purchase price. Used cars also may come with some type of warranty coverage. For more information, please see the FTC publication, Auto Service Contracts and Warranties.

klondike
August 01, 2018
You could check on Desert Toyota in Tucson, AZ. This may not be true of all of their salesman, but I ended up with a pushy one, never told me about not having the spare keys and I had to pay $107 to get a set. They said it was an as it purchase. Then I had to go out and get a new remote battery for the set of keys I had and had to go over where I live to find one. The person who helped me had extra batteries and did not charge me anything. When I went in to the dealership, the salesman did get a new screw in the remote since the original one was stripped. The one person that helped with the setting up with the purchase asked me to bring in a little bit more of a down payment, the salesman said he could not accept what I had brought in. The credit union that processed my loan did take it when I sent it in.
Mrs G. H., III
August 01, 2018
This happens with credit unions also...to sell the contract, incomes are changed, folks get cars ; then they apply for another product and get turned down. Make sure to keep copies of your applications!
Pat Neel
August 01, 2018
What else is new? A car dealer cheating a customer? I don’t believe it!
PS SAD CONSUMER
August 01, 2018
Bottom line: YOU CAN NOT TRUST ANYONE!
Angry Mad Hatter
August 01, 2018
We bought a car a few years ago at a local dealership.! Did you know dealers get a kickback on the loans you take out on your car? mY Wife complained when the salesman gave us a loan with a high interest rate as we have EXCELLENT credit rating he then gave us a different one with a lower . We decided to pay it off early and found out that we could not under the policy they hooked us up with. Which seems dumb to me wit was maybe a year ahead of schedule but if we paid it off we had to pay a penalty for doing so ????? So needless to say we kept making out payments until we got rid of them and the dealership which I will never have anything to do with again for other lies they told us when buying the car .
Dealer Here
August 01, 2018
Trust me, purplelock, the finance company probably wouldn't allow a warranty because of how much you were financing- a dealer will always try to sell a warranty if they can.
Masada70
August 01, 2018
Ask F&I what reserve is and whether they are inflating the interest rate that the financial institution bought f.b ha you at. Common practice, and is plain and simple unethical and stalling from you.
Nachonyc
August 01, 2018
Auto dealerships should be required to provide full lending disclosures during leasing as well. Their lobbyist are too powerful. Can't wait for the market to crash so used cars and home prices go down. Store your cash.
Danielle
August 01, 2018
AutoFarm Lincoln in Logansport does the same thing. Sells damaged vehicles. Tells the bank the customer puts a certain amount money down and they coached the customers to lie and say they did. Doesn't fix vehicle and makes customers pay double triple for a warranty. Makes them pay three times more than the original rate the bank gave. Terrible dealership!
conniesan
August 01, 2018
One dealer would inflate the seller's income and then repossess the vehicle when they could not make the payments.
Cautious
August 01, 2018
Good read. Car buying is one of the worst experiences. My recent purchase of an Audi turned out to be a “let us take advantage of a female buyer.” I got my own financing and the finance person flipped out. He then tried to sell me warranties ... I said no thanks! Well that was more upsetting to him. Yes a warning sign #1. Warning sign #2 The car arrives and I get a call from the sales person (who happens to be a male) at midnight. Really! Warning sign #3. I was sold a car with summer tires in December. I was never told about the winter package at $3500! Well why buy the car? I sold my own and the last dealership Mercedes tried to sell me a “new car” with 800 miles. I called the owner of the dealership and got my money back. So the story goes: ther peranna are out there. Your read is good information and valuable to many consumers.
Designermatch
August 02, 2018
This has happened to me in NJ FL and Pa three times paid so much and refinance company doing the same making you buy insurance and never paying when you're disabled trying to repo you
Johnny Ray
August 02, 2018
You're swimming with the sharks (apologies to the real sharks) at most auto dealerships. You can't identify them by loud, checkered jackets anymore.
Ray ray
August 02, 2018
That's old they have been doing that for a long time.
Sandy
August 02, 2018
How did the dealer "inflate numbers to make it look like people had higher monthly incomes" if the finance company requires some sort of proof of income ? And even after providing a check stub or bank statement , the finance company still calls to verify employment (and quite possibly income).... Don't they ?
ctressler
August 02, 2018

In reply to by Sandy

The FTC's complaint charges that over time, others in the industry got wise to what Tate’s was doing. In December 2015, a major financing company that regularly worked with Tate’s conducted a review. The company reported inflated income on 17.9% of applications from Tate’s Auto Center of Gallup, 37.5% of applications from Tate’s Auto Center, 38.7% of applications from Tate’s Nissan Buick GMC, and 44.8% of applications from Tate’s Auto Center of Winslow.

anonymous
August 03, 2018

In reply to by Sandy

YES, and there is usually a customer interview with the bank, at that time the bank asks the customer their income.
Blacalag
August 02, 2018
If you buy or lease from a reputable dealer..you will not have any problems...But..when you buy from Joe Schmo...best cars ever...you get what you pay for....come on now
Bobbie
August 02, 2018
I purchased a advertised jeep in June it was listed for 22,500 on line . When I got to the lot . I was told this jee p was 25, 900. So I pulled up the ad a d ask where was that jeep in the add. So they sold me the jeep at the ad price. Then tried to add over 5 k. In extras that I didn't need. I Told them I had financing. They insisted on getting me financing. @10%. I refused to sign the papers. I went to my bank on Monday took off all the extras. 5k. And got the loan. The accouant from the dealership got mad told me and the loan officer off. So when I took the bank check back and my down payment. I ask to see someone else. I never got an apology. From anyone. That dealer ship is in Augusta, Kansas.
Beth
August 02, 2018
Going thru this right now. Helped get my disabled sister a vehicle. Price was $2800 originally, but by the time everything was done the price went to $6700 with my trade in being $3300 and with interest payments and paperwork fees, the vehicle was $4700. Then the very next day the gearshift fell off, found out the emergency brake didn’t work and was missing the hardware for reverse lights. Dealership accused us of breaking it and told us to never call him again.
Bozo
August 02, 2018
Make sure you pay particular attention to the terms. A dealer in FL once tried to tack on 12 months to 60 on my loan. When I discovered at the signing their response was sorry our mistake. Yeah right !
Thimbleking
August 02, 2018
You're telling me that there are dishonest car salesmen out there!... naw, can't be.
Smooth
August 02, 2018
Car dealers have been crooked forever
Papa53
August 02, 2018
Buyer beware. Remember if there is a buck to be made by lying or cheating in a way where there is a small chance of being punished people will make that buck. Does not matter if one is a mom and pop or a huge corporation. The reality is the victim often comes back over and over for more abuse because of feeling powerless.
Buck
August 02, 2018
Auto dealers & salesmen are like insurance salesmen ,they only tell you what they want you to know. They will lie if it will make a sale.
Tj
August 02, 2018
Romano Toyota, Syracuse, ny, used a lease payment scam on me. Be aware.
mike.donovan
August 02, 2018
You would think in the age of the internet and smart phones that car dealers would realize they can't get away with this stuff anymore. But they still try. When my car needed an expensive repair, I went out car shopping. Dealers would advertise a manual transmission and then show you the advertised car with an automatic. They lied about prices, features, etc. Dealer after dealer lied, misrepresented, price switched etc. It was unbelievable. I would show up based on an ad and say I would like to look at this car. They would show me the car but it would be thousands more. When asked, they said it was a mistake. One place Is aid why would I buy a car from you when you make so many mistakes? I finally decided to get my car fixed. Be careful out there. It is such a zoo. They lie right to your face. It is so galling. Good luck and you have my sympathy.
Ave
August 02, 2018
What about things not disclosed about the car that may warrant discounts on the purchase price.
Phyl
August 02, 2018
We need strong consumer protection laws!!!!
azzie
August 02, 2018
How about the gm dealership saying life time power train warrenty, which only lasts five years or 100,000 miles, when I bought my truck I was told this an then I got an email from onstar that my warenty is running out after 5 years, this is crooked, I bought it from cheaps in Flemingsburg ky 41041, there has got to be a law againist this kind of saling.
Fiveiron
August 02, 2018
Just bought a used car from a GM dealer. We were quoted a 6.5 interest rate. Told them I didn't want there extra wartenty and special cleaning and what ever else they wanted to sell. They came back with a quote 10 bucks more including the extras and I agreed. When signing the contract I saw our interest rate was now 1.9. very deceptive. They wanted to sell the extras and figured I wouldn't see what I was actually paying for them
NoID99
August 02, 2018
The truly said part of this article is that only one instance is noted. This stuff goes on industry-wide at all kinds and levels of dealerships. They care only about the number of units they sell, as that is how their ratings are established with their vendors and tied to all their profit-sharing and bonuses. It is an industry that needs far more scrutiny than it gets.
hipthe
August 02, 2018
Sounds like Rimrock Auto Sales in 2003.
dsolde
August 02, 2018
Being an accountant I pride myself in knowing a financial deal and to read everything before I sign and to ask when I need clarification and I too have caught so many dealers over the years trying to pull a fast one on us that I think they hate selling me vehicles. Trust NO AUTO DEALER just like a horse trader.
NavyGuyDon't u…
August 02, 2018
Last year we purchased a Tucson from Headquarters Hyundai in Longwood, Fl. Attached was a list of "add-ons" enclosed In plastic. Salesman told us these "were included and we must pay for them" I told him AND the manager, that it was MY decision whether or not to buy wheel locks or other thins.. The total price of these were subsequently cut in half. Imagine our surprise when Financing tried to sell us an "etching service" to aid police in case of our vehicle being stolen! My past history indicated that this was a useless process. Plus, it was NOT endorsed by any local or state police! We refused this "service", and less than 1 week later, received a letter from the etching service telling us we had 24 hours to change our minds for the now FREE service. Thankfully I read the "fine print" that said the company WAS NOT affiliated with ANY law agencies, and NOT affiliated with ANY dealer! (Why, then, was the finance manager "selling" the service?) The letter further stated that, upon completion, we WOUILD be billed $149.00 Hyundai USA was notified and copies of the window sticker sent to them. No answer!! Imagine my surprise!!
Just bought a …
August 02, 2018
Easier said than done. Try reading everything when they're handing you 50 documents to sign one after the other.
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