Buyer Beware: Predatory Tactics That Led To Mortgage Meltdown Still Plague Auto Loans

iWatch News:

After the financial crisis exposed the devastation caused by predatory lending, state and federal authorities vowed to protect consumers from practices that lured them into debt they couldn’t afford.

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Comments

[Dana1982]

10:20 AM on 04/14/2011

The best thing that can be done to end preditory lending is not to agree to the loan if it has terms you think are wrong!!! You are the first line of defense the the best regulator against the preditory lending industry.

[ras2000]

06:23 AM on 04/14/2011

There are cash buyers by choice and then there are cash buyers that have no other choice. If the
latter are offered financing they will sign for anything because they have no intention of fulfilling
their contractual obligations. There are games played on both sides of the desk.

[bdickason71]

08:51 PM on 04/13/2011

The articles could have been written about doctors or any business.

What about doctors who have 1000 steak dinners and then the following week are prescribing that medicine to you, any chance it had anything to do with the dinner and not the drug?

Anyone here ever sell their own car, computer , home, and get more then you were hoping to get, meaning you listed the item for 100, mentally knew you would take 75, but someone offers you 90, did you take the 90? Or did you say , heh, I was willing to sell it for 75 so here's 15 back? I doubt it.

Why not just list it for 75?

And these crazy examples of fraudulent dealers getting fake titles to resell the car, by the time this was written, that dealer is probably in jail!

Has there ever been a teacher go to jail, lawyer, doctor, etc.??

The problem here is car dealers deal with different scenarios on every customer. Different credit ratings, financial situations, tastes, Nd time constraints.

[cdecisneros]

05:12 PM on 04/13/2011

You would think that Republicans would support rules that would keep young male soldiers who often are away from home for the first time from being taken advantage of. Whatever happened to "support the troops".

[AFrosty1]

04:52 PM on 04/13/2011

I think most politician these days were former car dealers. They are making us take on more debt than we can afford. And, all we get for it is . . . . screwed.

[AZdesertdog]

02:16 PM on 04/13/2011

as a former new car dealer myself, I find this behavior with yo-you loans abhorrent. we would have fired any finance manager on the spot who did anything like that.

many states (my dealership was in California) do not allow a car to be sold as "new" if has been registered more than once, so if we got a "rollback", it became much harder to sell the second time around.

it was also an issue with regard to the new car warranty as well, and the first thing a dealer does is submit a new vehicle delivery report (known in the business as "burning the NVDR card") to the manufacturer as soon as it rolls over the curb. if the car comes back, it's considered a used car to the manufacturer as well.

with that being said, it gets really difficult to understand how folks sign these papers, as no one is holding a gun to their heads.

that stupidity has blown me away many times. I remember going to lunch with one of our lenders one day. I was in the manager's office, and he showed me a deal that was faxed in from a Nissan dealer. they were selling a brand new Nissan pickup for $5,995 (this was back in the 80s), and the aftermarket extended warranty was the same price, $5,995.

the buyers signed the contract.

much of this stupidity rests on the backs of buyers. no one forced them to sign.

just say no.

[roid rage]

01:08 PM on 04/13/2011

But like the article said a lot of these buyers are unsophisticated. (Not familiar with dealing with crooks) So they are screwed.

[tiredofthesameoldstuff]

01:27 PM on 04/13/2011

"buyers are unsophisti­cated"

Where in the article is that said? It said that buyers had become more sophiscated.

[roid rage]

04:55 PM on 04/13/2011

"I think that’s a problem because a lot of fairly unsophisticated people buy cars from auto dealers,” said Rep. Barney Frank, a Massachusetts Democrat who co-authored the 2010 financial reform law. “We felt that consumers need protection in this.”

[iam99]

12:22 PM on 04/13/2011

It has come to Predation, Inc., with a back-up in congress, sec, justice.

[Cheryl Fitzpatrick]

11:36 AM on 04/13/2011

Predatory Tactics is the title of the new American business model, just sayin'.

[daultman463]

01:58 PM on 04/13/2011

What business model Cheryl?? I`m a sales/finance mgr at a ford store and have yet to figure out what .the left thinks we should be doing. These cases were no doubt criminal or at least slimmy in their actions but what about the rest of us just trying to stay open and make a living. we don`t do secondary financing or anything close to these cases but are we allowed to make money?? If we do 50 finance deals 48 of them we use the buy rate of around 4% but if you don`t qualify because your credit sucks then you get a higher rate.Are people responsible for their actions? When you go buy furniture and they make 100% profit or clothes and they make 200% profit that is OK?? Most car deals we make 1-4 % profit which in most jobs would make you close the doors. ounds like even when you are honest your still a criminal to some on here.

[VoteThemAllOut]

11:18 AM on 04/13/2011

What ever happened to taking responsibility for your actions? Guess it is easier to curse someone else for our failings.

If you sign a contract without reading and UNDERSTANDING what you are agreeing to, then you should be responsible for whatever you just agreed to.

[Sipiwe Mutunhu]

11:29 AM on 04/13/2011

I get tired of people like you saying, if you don't understand what you're getting into then don't. The thing is, it's called "predatory" that word in itself implies unfairness, deceptive, and obviously not on the level. What happened to fair business practise. Not everyone went to law school to be able to decipher the documents that are presented to you when signing contracts. The are intentionally written so laymen cannot understand it.

[J0E1]

12:25 PM on 04/13/2011

Some of these "tactics" only require a little bit of common sense to avoid. 
 
 "Hi, we were able to approve you for a loan but we can only sell you these two cars..." 
 
 "uh... sounds legitimate to me!  Where do I sign"?

[TeraWatt60]

11:06 AM on 04/13/2011

Unless and until these predatory "capitalists" are hit very hard with penalties they will treat anything else, like public disapproval and the cost of bribing their local RepubliBagger legislator, as a cost of business.

[Kenz300]

10:40 AM on 04/13/2011

It used to be you just had to negotiate the price of the car and trade in.

Now you have to negotiate the loan. As people got smarter on the price of new vehicles and started using the internet to check price these guys found a new way to get their money.

Inflated interest rates are a scam. Go to your local bank or credit union first before you go to the car dealer. Once you have a rate from your bank and credit union you will know if the salesman your dealing with is trying to take advantage of you. If he is, walk away.

[Dana1982]

10:34 AM on 04/13/2011

The best way to end Predatory Lending is not to sign for the loan. If you have to take out a high interest loan, then you can't afford it.

[tiredofthesameoldstuff]

12:08 PM on 04/13/2011

Sorry you might want to read the article. The loans are later on changed to high interest without the signer ever being aware that was going to happen.

[Dana1982]

12:16 PM on 04/13/2011

This is done according to the terms when they miss a payment, go over the limit, or their credit score drops below an agreed level. Keep to the terms of the contract and rates won't change. If you know you have bad credit, don't go into these loans. Remember - It's a choice.

[J0E1]

12:28 PM on 04/13/2011

Bingo.  The women on the first page agreed to a 12% interest rate loan on a new car... uh... seriously?

[tiredofthesameoldstuff]

01:30 PM on 04/13/2011

You also missed the part about it being a rebuilt car that was unsafe to drive and that it was a family acquintance that she trusted since he prayed with her over son.

[Kenz300]

10:33 AM on 04/13/2011

Any wonder why business people are held in such low regard. It seems like no one today has any ethics. Everyone is out to take advantage of the next person and is only interested in the short term sale. What ever happened to developing a long term customer relationship and having that customer and their family want to do business with you again?

Going to a car dealer is like going to the dentist. You may need to do it some times but you do not like to. It seems like all car dealers have become less ethical. It is a shame but it is also an example of our greed is good society.

[rchham]

10:27 AM on 04/13/2011

I've got an idea, why don't we have the Federal Government take over! I think we did didn't we?

And, lets have the government pack us a lunch for work, and maybe pick out our clothes for us. You folks have got to grow up!

[Birdman372537]

10:37 AM on 04/13/2011

Equating consumer protection with a "nanny state" is the province of the simple minded.

[behavingbadly]

10:40 AM on 04/13/2011

Amen and hallelujah!

[sillyfrog]

10:42 AM on 04/13/2011

You tell em.

[TeraWatt60]

11:04 AM on 04/13/2011

Sell any cars today?