A used car lot that gets more than its share of consumer complaints has been accused in a lawsuit of deceptive trade practices and bait and switch advertising.
Alex Pena was 19 when he was drawn to Auto Deal Corp by an online advertisement for a $10,998 Infiniti G35. He signed a blank retail installment sales contract, according to a lawsuit he and his mother filed against Auto Deal Corp and its bonding company.
Being asked to sign a blank document “was kind of fishy,” Pena told the Team 6 Investigators. “But it was a car, we needed a car right away so we took it.”
Pena and his mother paid $2,800 in deposits, agreeing to make 36 monthly payments of $359, the suit claims.
More than a month after getting the car, the Penas claim they were informed by a lender that Auto Deal Corp had increased the price by more than $6,000 and added 20 additional monthly payments for $15 a month more than they agreed to pay, the lawsuit claims.
They immediately returned the car and demanded a refund of their $2,800 in deposits, but the dealer refused, the suit states.
The next week, Pena said he “woke up and the car was missing. We called the cops, thinking someone had stolen the car,” but soon learned Auto Deal Corp had repossessed it.
The suit calls it a “bait-and-switch” transaction, the bait being the low price, which the Penas alleged was illegally increased.
They alleged false advertising and unfair and deceptive trade practices and Pena said attorney Rebecca Covey obtained a $10,000 settlement from the used car company’s insurance company.
Covey said the state of the used car business in Florida is “treacherous, really treacherous,” especially for buyers like Pena. “They’re clearly maybe easy marks for dealers because they’re young, inexperienced,” Covey said.
Miguel Mejia, 22, agrees.
He claims Auto Deal Corp lured him to the lot with another kind of bait and switch: an online advertisement for a Porsche Cayenne that, when he arrived, was no longer available.
He wound up buying another one and, after spending nearly $7,000 in deposits, payments and repairs, had the car towed back to the lot three months later where, after he missed a payment, it was repossessed.
Mejia said when he was driving off the lot in his used 2006 Porsche for $13,699, “I’m thinking I got a good deal.” Now, he said, “It’s a big loss to me, and it does hurt but I think it’s a lesson learned.”
Auto Deal Corp manager Andres Diez said that car was sold to Mejia as-is and the dealer had no obligation to take it back. It also had the right to repossess when the payment was missed, he said.
About a third of the used car businesses in Davie have an F grade from the Better Business Bureau, and only one has more online BBB complaints than Auto Deal Corp.
Lisette Mariner, executive director of the used car’s industry’s statewide association, said, “I don’t think there’s necessarily a problem. There are bad apples in every industry.”
Diez said the company is not one of those bad apples, noting it has sold thousands of cars without complaint.
He said the company learned from the Pena lawsuit that it should include disclaimers in advertisements that the price advertised is a cash price and does not apply to credit deals. He could not identify and the Team 6 investigators could not find such a disclaimer on the two websites Diez said the company uses for advertising.
A Team 6 Investigators producer with a list of several cars being advertised by the dealer on one of the those websites asked two salespeople to show her several of those cars, but was told none of them was on the lot.
Diez said it takes time to remove ads for cars that are recently sold and that some websites with outdated inventory advertise Auto Deal Corp cars without the company’s approval.
Florida’s Attorney General has published these tips for people considering buying a used car:
- Research - check online or with your local library or bookstore for reference material on various car models, options, their comparative costs and their track-record for reliability. Check the Classified section of your local newspaper to compare prices. Call the Vehicle Safety Hotline (800-424-9393) to learn whether a specific car model has ever been recalled.
- Costs - the real cost of a car includes more than its purchase price. Consider the vehicle's reliability. An unreliable car may cost you much more in frequent repairs, not to mention the aggravation and time lost from work you may experience. Financing terms can also significantly affect your total costs. Check with your local bank, credit union or even insurance company or motor club to compare rates.
- Used Car Dealers - check with the Better Business Bureau to learn if it has received complaints against a particular dealer. Never rely solely upon oral promises of a salesman which will be difficult or impossible to enforce; ask the salesman to put it in writing. If you are considering buying a specific car, insist upon having the vehicle inspected by an independent mechanic before you buy it. Refusal to allow an independent inspection should be a clear warning, and you should consider taking your business elsewhere. Ask if the vehicle has ever been in an accident.
- "Buyers Guide" - Federal law requires dealers to affix a Buyer's Guide sticker on the window of each used car. The sticker will inform you as to whether the car comes with a warranty and, if so what specific protection the dealer will provide; whether the car is sold "as is" (with no warranties); that you should ask to have the car inspected by an independent mechanic before you buy; that you should get all promises in writing; and what some of the major problems are that may occur with any vehicle. If the deal was conducted in Spanish, you are entitled to retain a Spanish-language version of the Buyer's Guide.
- Warranties - Buying a car "as is" disclaims all warranties. You should not expect any legal protection if the car is a "lemon." In Florida, there is no Used Car Lemon Law. If the dealer does not affirmatively disclaim all warranties in writing, you will be covered at least by implied warranties of merchantability (the product will do what it is supposed to do), fitness for a particular purpose (dealer's advice that the car will be suitable for a particular use, such as hauling a trailer), and a good title. If the dealer provides its own written warranty, read the terms carefully to determine what repairs are covered, the extent of coverage (parts, labor, deductibles, exclusions) and the other terms and conditions. The dealer may try to sell you an extended service contract. You should consider the extent to which the same repairs are already covered under the dealer's warranty. The value of a service contract is determined by whether its price is likely to be greater or less than the cost of repairs to the car.
- Private Sales - You may save money by buying a used car from a private individual, such as through the classified section of your local newspaper. However, you should be aware that private sellers do not have to provide you with a Buyer's Guide, and do not provide implied warranties under state law. Therefore, it may be even more important to obtain warranty promises in writing and to obtain an independent inspection prior to purchase.