There is something of a social contract of treating military personnel and veterans better than or at least equal to the general public. However, a good number of car dealerships haven’t gotten the memo, as a lot of car dealers are found ripping off service personnel.
That is not supporting the troops
A large number of reports have emerged in recent years of car dealerships selling military personnel cars at drastically inflated prices or in poor condition. A recent post on MSNBC reports that a Marine named Cody Cameron, stationed in Jacksonville, N.C., was sold a 2004 Nissan 350-Z with 60,000 miles on the clock. Within two weeks, the lug bolts sheared off the rear driver-side rotor while driving and the wheel dislodged from the hub. The dealer repaired the wheel, but the incident repeated itself one week later.
Cameron bought the car for $17,000. He later found his car had been in a serious accident on the side of the vehicle where the problem was, despite the dealer assuring him otherwise. Cameron is suing the dealer, but he is far from alone.
A sordid history
Car dealerships have a history of enticing military personnel into buying cars at inflated rates and using heinous bait-and-switch tactics.
For instance, Carland, a former dealership in Norfolk, Va., according to MotherJones, lost its license in 2004 for salesmen picking pick up service members from Marine bases in North Carolina and Virginia and driving them several hours to the dealership. Upon arrival, they were told they wouldn’t get a ride back, essentially forcing them to buy a car to be able to report for duty the next day.
According to the New York Times, military members are also often victims of “yo-yo” financing, where dealerships will sell a person a car, agree to financing and then call them, saying the financing fell through. When people return the car, the dealer demands several thousand dollars more as a larger down payment.
Widespread but largely unchecked
There’s no telling how widespread the practice is, due to car dealerships being much less regulated than other services. However, the financial advising unit of the Pentagon, according to the Los Angeles Times, reported in 2010 that 72 percent of the counseling it delivered was related to problem car loans. Young service members are at the most risk; dealerships often entice service personnel by portending to offer steep military discounts.
Suspicious car loans and car financing for military members, as well as the civilian population, should be reported to federal authorities straight away.
However, auto lenders who finance their own loans are subject to regulation by the Consumer Financial Protection Bureau, according to the CFPB’s website. Car loans by other parties are regulated by the Federal Trade Commission and the Federal Reserve. The current head of military affairs at the CFPB is Holly Petraeus, wife of David Petraeus, former commander of the military forces in Iraq and current head of the Central Intelligence Agency.
Los Angeles Times: http://articles.latimes.com/2010/may/13/business/la-fi-car-dealers-20100514