DEPARTMENT OF CONSUMER AFFAIRS CRACKS DOWN ON USED CAR DEALERS FOLLOWING TWO-MONTH LONG INVESTIGATION INTO “BAIT-AND-SWITCH” ADVERTISEMENTS
DCA Issues Dozens of Violations and Issued Tens of Thousands of Dollars in Fines to Used Car Dealerships Using Illegal Tactics
Department of Consumer Affairs (DCA) Commissioner
Jonathan Mintz today announced a crackdown on used car dealers using
bait-and-switch tactics to lure consumers into their dealerships. Following a
two-month investigation of used car dealers’ advertisements, DCA conducted a
targeted enforcement sweep, inspecting 18 dealerships in all five boroughs that
advertised special car sales and deals, and found that less than half of dealers
even possessed the cars advertised for sale. DCA issued 63 violations to
10 used car dealers. These violations included advertising cars that were not
available or had already been sold, as well as advertising cars at prices
substantially lower than what they charged in the dealership. Fines for
violations written by the Department during its enforcement sweep could total
more than tens of thousands of dollars.
“It’s not just unethical, it’s illegal to lure a New York City consumer into
your store with prices that are too good to be true,” said Consumer Affairs
Commissioner Jonathan Mintz. “Unfortunately, our most recent investigations
showed that, more often than not, those great-looking deals just weren’t
true. One way or another, used car dealers in this City are going to learn
that the best way to run a business is to distinguish themselves by offering
customers good, legitimate deals.”
DCA also cited dealers for failing to have Police Log Books available for
inspection, which contain critical information about the cars including when the
dealer took possession of the car and when the dealer sold the car.
DCA licenses nearly 850 used car dealers in New York City and enforces the
City’s Consumer Protection Law. In 2008, the Department received more than 700
complaints about used car purchases, making it one of the top five consumer
complaint categories. Most complaints included reports of bait-and-switch,
unclear contract terms, financing issues, and high pressure sales tactics. In
the past year, DCA reclaimed more than $800,000 in restitution for consumers who
filed complaints about used car dealers.
To file a complaint with DCA, or for a free copy of the Used Car Sales
Consumer Guide, call 311 or go online to www.nyc.gov/consumers
DCA enforces the Consumer Protection Law and other related
business laws throughout New York City. Ensuring a fair and vibrant marketplace
for consumers and businesses, DCA licenses more than 71,000 businesses in 57
different industries. Through targeted outreach, partnerships with community and
trade organizations, and informational materials, DCA educates consumers and
businesses alike about their rights and responsibilities. DCA’s Office of
Financial Empowerment is the first municipal office of its kind in the nation
with a mission to educate, empower and protect New Yorkers with low incomes.
DCA’s OFE administers a citywide network of Financial Empowerment Centers and
other products and services that help these New Yorkers make the best use of
their financial resources to move forward economically. For more information,
call 311 or visit DCA online at www.nyc.gov/consumers.
Shopping for a car? Follow these
If buying a used car, first check if the dealership is licensed by
DCA. Use the instant license check tool on the DCA Web site or
call 311 to confirm that a used car dealer is licensed.
Get a copy of your credit report before you start shopping
around. Correct any errors, or work on improving it before you
apply for a car loan so that you get the best deal. Go online to www.annualcreditreport.com for a
free copy of your credit report.
Get pre-approved for a loan BEFORE going shopping. The
terms and eligibility requirements for financing can be complicated. If you
are going to finance your car purchase, knowing rates before you shop will
help you compare rates and find the best option for you. If you use your own
bank or credit union, you will also be dealing with an institution with which
you have a relationship if anything goes wrong.
Don't negotiate a purchase based on a monthly
payment. Your goal is to negotiate the best price for the car at
the lowest interest rate and for the fewest number of payments. Pay close
attention to the terms; negotiate the total cost of the car, the interest rate
and the total amount that you are financing. Then estimate the monthly payment
Say no to "add-ons" and options. Most add-ons or
options like paint and fabric protection, rust-proofing, extra security
systems, extended warranties, etc. are cheaper when bought separately. Ask for
a calculation of your monthly payments with and without the add-ons and
Never sign a blank or incomplete agreement or contract.
Only sign complete contracts. Never sign a contract if you don’t understand
the terms. If a car sale is negotiated in Spanish, the contract must also be
written in Spanish. Always keep all copies of any contract or paperwork