When local Colorado military personnel member Lori Mendoza came across an advertisement last year from a local Nissan dealership that upheld itself as “Proudly Serving our Military” and promised deals for men and women in uniform, she thought it was a great deal. She traded in her older BMW to drive off in a 2010 Nissan. That’s when her “great deal” turned into an ordeal.
In a filed suit, Mendoza stated she was charged $35,000 and not the agreed-upon $27,000. Although the dealership owned up to the discrepancy after it was caught, claiming it made a “mistake”, further issues arose. The original agreed-upon deal financing was battled back and forth, and when Mendoza returned to the dealership to cancel the transaction and return the vehicle, she came to find that her traded-in BMW had been auctioned off. When she demanded copies of her sales contract including the federal Truth In Lending disclosures, a dealership staffer refused, stating he didn’t want her using the documents as “ammo” against the dealership. Although this suit is now settled, the bad car deals still remain for many military personnel. Many current and veteran military personnel believe that car dealerships across the nation target service members.
“San Diego has a strong military presence, so we frequently receive calls from members of the military in similar situations. But the reality is that these practices are not limited to just military individuals. Independent used car dealerships are where we typically see our worst kinds of frauds. The problem is that a lot of them are fly-by-night organizations or adept at avoiding collection. Regardless of whether you buy from a used or new car dealership, it is important that you make the dealer dot every “i” and cross every “t.” Do not rely on any verbal representations. Get everything documented in writing. Get copies of each and every document related to the vehicle or that you sign. If you buy a used car from a dealership, it is imperative that you have the car inspected by an independent mechanic. Do not rely on the dealer’s promises,” says Gregory T. Babbitt, Rosner, Barry & Babbitt, LLP. “Also, be wary of a dealership that suggests or steers you to a finance company for you to get your own financing. If the dealership arranges the financing, that finance company will be liable for any claims you have against the dealership. This is a powerful weapon and a deeper pocket for you to recover from if something goes wrong. We still recommend that you look into your own financing, because this will help you negotiate a lower rate through the dealership. Remember, if the advertised price by the used car dealership is much lower than any other prices, there is a reason. The car has probably been damaged from a prior accident or the dealership is trying to bait and switch you, so be wary.”
Mendoza’s suit and many other cases across the nation are building enough of a concern that the Federal Trade Commission is convening this week for a public hearing to discuss the problems military personnel are experiencing when purchasing vehicles on credit.