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BBB CORNER: Don't spend your tax refund with a shady car dealer

By Randy Hutchinson, President of the BBB (Reprinted from The Jackson Sun)

Complaints to the Tennessee Motor Vehicle Commission jump during tax season when many auto dealers launch promotions encouraging consumers to use their refund to buy a new or used car. Some of the dealers are honest, some aren’t.

Motor Vehicle Commission Executive Director Paula Shaw says, “Tax season often generates a high complaint volume for Tennessee’s Motor Vehicle Commission. Unethical parties prey on the fact that many people are receiving an instant infusion of cash that they can potentially use to buy a vehicle.”

A particular problem is “curbstoning,” which usually involves an unlicensed dealer posing as a private seller. The term originated with the practice of selling cars on the side of the road, although curbstoning also occurs in print and online classifieds. CarFax says curbstoners often sell cars reputable dealers won’t touch, including ones with rolled back odometers and flood damage.

The best protection against curbstoning is to buy from a licensed, reputable dealer. You can verify their license with the state and their record with the BBB. If you decide to buy from someone you think is a private seller, look for these red flags:

  • Different names on the seller’s driver’s license and the vehicle’s title
  • The same phone number being used for multiple private used car listings in the same area
  • Selling from empty lots, shopping center parking lots or non-residential streets
  • Insisting on cash payment
  • Elaborate and emotional stories about why they’re selling the car
  • A suspiciously low price

Do your homework before shopping for a new or used car. Determine what you can afford, including insurance and maintenance costs. Research your financing options, whether from a bank or credit union or the dealer. Don’t focus only on the monthly payment. Research the average value of the car and your trade-in and be sure you understand all the fees and extras included in the deal.

If you’re buying a used car, consider having an independent mechanic inspect it. If relying on your own inspection, do it during the light of day when defects are easier to detect. Look for mismatched paint, uneven tire wear, cracks in windows and lights, and soot on the tailpipe. Test all of the systems and test drive the car at different speeds and on different road conditions.

Ask for a vehicle history report and verify the mileage at the time of sale. Read the contract and be sure any promises made by the salesman are included. Understand the warranty, if there is one. If you negotiate any changes to the warranty coverage, or the dealer agrees to make repairs or to cancel the sale if you’re not satisfied, be sure those provisions are written on the Buyers Guide that should be affixed to the car. Keep the Buyers Guide.

Remembering these final tips from the BBB would save many car buyers a lot of grief:

  • There’s no right of rescission or cooling-off period with the sale of a vehicle. When you drive it off the lot, it’s yours unless the dealer has contractually committed to allowing you to return it within a specified period of time.
  • You’re pretty much on your own for any repairs required on a car sold “as-is.”