Beware of Buy Here Pay Here Auto Sales

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For many people a car is a necessity in life. Even with the best public transportation, daily commutes and errands, are much easier with your own vehicle. As a result, consumers who don’t qualify for conventional loans, may agree to unrealistic terms when purchasing an automobile.

A fast growing corner of the auto market, also known as “Buy Here Pay Here” auto sales, is being advertised as helping the consumer purchase a car, but more often than not, it is the dealership that benefits from the agreement. Buy Here Pay Here lots sold nearly 2.4 million cars nationwide last year, according to CNW Marketing Research. It is estimated that there are more than 33,000 lots nationwide making about $80 billion in loans every year. Some dealerships have been accused of purposefully structuring loans to guarantee the borrower will default. Higher purchase prices, interest rates nearly triple the national average, and aggressive repossession practices make it easy for the dealership to repossess the car and sell it to a new customer at the same high interest rates, and while still pursuing the old borrower for their debt. Some dealerships have been accused of equipping their cars with hidden GPS devices and remote-control ignition blockers to make the repo man’s work easier.

Dealers say they are offering a valuable service for people who can’t get credit for a car. They say they risk never seeing a payment, or the car again. When a buyer does default, repossessing can be a costly hassle. Some cars are never found while others come back so beaten up they have to be junked. “This is not the car business. This is the finance business,” said Ken Shilson, an accountant who founded the National Alliance of Buy Here Pay Here Dealers in Houston. “Not everybody has the stomach for it.”

There have been some crackdowns on Buy Here Pay Here dealerships. In 2004, an Ohio chain settled a federal class action for $21.8 million to customers who say they were misled about their loans. In 2006, the Kentucky attorney general reached a $7.4 million settlement with the nationwide J.D. Byrider chain to settle violations and deceptive sales practices. But these settlements are rare. Buy Here Pay Here businesses are both auto dealers and consumer lenders, it’s not always clear who has authority over them.

You can view the whole story HERE, as reporter Ken Bensinger of the LA Times explains Buy Here Pay Here auto sales and how they can take advantage of people with bad credit while providing a valuable service for someone who needs a car but can’t get credit.

Subaru Sunroof Defect

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Subaru is recalling some 2011 Outback and 2011 Legacy vehicles because the moonroof glass may become loose or detach from the vehicle. According to the recall report, the amount and position of the adhesive between the glass and retainer was inadequately applied, and could become a road hazard if it detaches while driving. Owners wanting more information on the recall can contact Subaru at 1-800-782-2783.

Webasto Group first announced this sun roof detachment issue in 2010, and it has been an ongoing problem effecting many makes and models of vehicles. If you think your vehicle may have a recalled moon roof, you can click here to verify if your sunroof is involved.

Pontiac G8 Airbag Requires Reprogramming

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General Motors is recalling certain 2008-2009 Pontiac G8 sedans because the airbags may not protect the front passenger during an accident. According reports filed with the National Highway Traffic Safety Administration (NHTSA), with the front passenger seat positioned full forward, the seat position sensor will cause a delay between the first and second stages of the dual stage frontal passenger air bag. This delay could result in increased head injury to smaller sized front seat occupants. Owners receiving a recall notice can take their G8 vehicles to their local dealer where the sensing and diagnostic module will be re programed. For more information, contact Pontiac at 1-800-620-7668.

Honda Reports Seat Belt Problem

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Honda is recalling certain 2009-2011 Pilot SUV vehicles for a problem with the driver and front passenger seat belts. According to the recall, there is a possibility that the stitching that attaches the lap section of the seatbelt may be incomplete or missing. In the event of an accident, the occupants may not be properly protected. Honda Dealers will inspect and replace any affected belts free of charge. Owners wanting more information about the problem can contact Honda’s customer service at 1-800-999-1009.

Lemon Law Attorney Exposes Cramming Scam

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Like any other small business owner, California lemon law attorney Kurt Delsack is trying to keep his expenses down, so when he noticed and unauthorized charge on his phone bill, he decided to investigate. The charges came from a third-party billing company called Operated Assistant Network (OAN), and according to Kurt’s investigation, he wasn’t the only person being scammed.

The Federal Communications Commission says about 15 to 20 million households are overcharged on their telephone landlines, costing consumers almost $2 billion a year. Also known as, “cramming”, the overcharges come from third party billing companies for features like voice mail and call waiting. Because these charges are buried within the phone bill only about 5% of households even realize that they are victims.

Don’t become a victim. There is something you can do:

  • Know your phone bill, so you can recognize unusual charges. Most local phone companies require you to opt out or shut off any third party billing, so make sure you contact your phone company to do so.
  • Don’t provide your name, address and phone number for promotions, coupons and sweepstakes without knowing exactly where it’s going. That’s how scammers get your OK to charge you.
  • Contact your phone company right away to dispute any charges you didn’t authorize. You should also contact the third party provider and make sure they are permanently removed from your bill.

    • .

After Kurt talked to Verizon, they reimbursed him for one year of the charges. But now he checks his bill more carefully.

BMW Water Pump Failure

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BMW is recalling certain 2008-2011 vehicles equipped with 8 and 12 cylinder turbocharged engines because the circuit board for the electric auxiliary water pump could overheat. The failure could result in smoldering of the pump, the vehicle overheating, and a possible engine compartment fire. There have been over a hundred reports of pump failures, two of which resulted in engine fires. Owners wanting more information on the problem can contact BMW customer relations and services at 1-800-525-7417. The vehicles involved in the recall include:

Update

BMW has announced that the recall will also include their luxury brand model the 2010 Rolls Royce Ghost. Rolls-Royce decided to recall the Ghost because it uses engineering and components similar to those found in the recalled BMW models. Ghost owners wanting more information on the recall can contact Rolls-Royce at 877-877-3735.

Posted in BMW.

Saab Saved From Liquidation By Chinese Automakers

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Hours before facing court action to liquidate, Saab has been saved by Chinese automakers, Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade, in an agreement to buy the company for a little over $140 million. The Swedish automaker has been struggling to survive since January 2010 when General Motors sold the automobile division to Spyker cars. In April 2011, the company continued to struggle as factories closed due to lack of credit. At the time, the tentative agreement with China’s Pang Da Automobile Trade allowed the factories to reopen, giving the Chinese company an equity stake in Spyker.

The Chinese companies are expected to invest up to $708 million in Saab, and plan to build vehicles at their Trollhattan plant as well as in China, which will become the second home market for Saab. The deal first requires the approval of the authorities in Beijing, the European Investment Bank, the Swedish government, as well as G.M., which has links to Saab, through intellectual property and preferred shares.

Ford Quality Rating Drops

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Consumer Reports’ 2011 annual car reliability survey, seems to mimic JD Power & Associates annual automobile quality study, by reporting that the overall quality of 2011 vehicles has dropped. Ford, suffering the biggest drop, went from 5th to 23th spot, the biggest drop for any major automaker in Consumer Reports’ 2011 Annual Auto Survey. According to the report, the new Ford Explorer, Fiesta, and Focus all had below average reliability, but the problems were attributed to new technologies like the new MyFord Touch infotainment system and the new automated manual transmission. Chrysler had better results with its new Chrysler 200 (formerly Sebring) sedan, the redesigned Dodge Durango and the Jeep Grand Cherokee SUVs. Of the 91 Japanese models for which Consumer Reports collected data, 96%, were rated average or better in predicted reliability. These vehicles, however, offered little in new technology from previous models.