Forum Post: Today's Car Dealerships Echo the 2000's Mortgage Massacre

Promise: we will get to how to protect yourself. And it's not as bad as buying a house during the recent the Mortgage Massacre.

Goody-goody.

The 1%ers and their corporations have professional services available to handle car buying. Some half-a-million individuals and small businesses share use of these services. The idea is to pay a membership fee up front to avoid the Sales Manager system. For $25 or $30 a year with other benefits they get offers in writing and no high pressure scams.

The 1%ers figured out that Wall Street flim-flam has polluted the new car sales process. They are happy to pay up-front to arrange their leases and purchase offers prior to going in for the car. Even where they use sales people to take test drives, they still go through buying services to cut out the Sales Managers and the tricks that come with face-to-face contract negotiation.

Everybody wants to save money.

Problem is, most Occupiers walk in unprepared. We are 99%ers. As a 99%er, you get targeted same as mortgage seekers back in the 2000s.

You go in, you might have a print ad or an internet ad in your hand. You saw a car and you want one. Normal purchase, you think. Your last car buy was years ago. You are certainly not ready for the stresses induced by this Sales Manager system.

Worse yet, you go in with no idea what is going to happen. No way are you ready for what can turn into a 3 or 4 hour knock-down drag-out. You go in with no idea that they can fake documents on you.

Who would have thought that "robo-signing" would spread to new cars?

Try to go in and buy a new car from a dealer in the Northeastern section of the country. From our research in the last four months you will find yourself in a system that applies a variety of slimeball techniques that add between $1700 and $6500 in unsupported fees to the cost of a $20,000 vehicle.

If you go for a $30,000 car, these dealership can try to add as much as $10,000 above the MSRP and expected tax, tag, title, and justifiable fees. The worst of it is one scam that has lease customers paying higher payments than what you need to buy the car, then finding no extra credit at turn-in 36 months later. Getting that last scam through is observed in conjunction with a trickily placed use of forgery -- no telling how many of these Sales Managers worked in the robo-signing departments of the Mortgage Factories.

Car dealerships have been bought out and consolidated to groups of dozens of sites. You can find hundreds of operations under the same corporate leadership. This removes oversight and replaces accounting reviewers with "Customer Service Representative" slots. These CSRs can talk but they have no power whatsoever.

Plainly, buying a car is not like buying a refrigerator. Arguably it is more like buying a house in 2003-2007. Nobody gets mugged at the Appliance Department in a Sears or a Home Depot.

-- No one is told that an advertisement only applied to one particular refrigerator, which was always "Sold Yesterday."

-- No one is hit with a payment agreement costing $795 that mentions augmenting insurance, but in the language of the agreement provides no coverage or augmentation whatsoever.

-- No refrigerator comes with a "$1,000 radio."

-- No refrigerator monthly payment is negotiated first, with the total cost of the appliance jacked up with extras to absorb available moneys.

-- No refrigerator buyer is handed a red folder filled with 50 pages of printed forms.

-- No refrigerator buyer finds a forged "Lease Waiver" form in her red folder, which voids a 24-hour consider-the-deal-before-signing right provided by her state government.

-- No refrigerator buyer leases a frig, then finds a forged lease contract in her red folder that carries forward the agreed monthly lease payment but changes every other element of the verbal agreement.

-- Very few refrigerator buyers need to do more than consult Consumer Reports and online price scanners to support their shopping expeditions.

Refrigerators are rarely sold by criminals. Cars ??? You might need more than good luck.

Cars are indeed different. And this is not the silly horse-trading tricks of corner lot used car sales. This is first-line Class A new car dealerships we're describing. The top selling brands. The best cars.

The financial tricks that fueled the $2.1-trillion Mortgage Madness extravaganza have moved over from the largest to the second-largest consumer durables sector.

One simple alternative is use of a membership organization such as AAA. The New Jersey chapter will negotiate a price for new or used car purchase. AAA.com-Automotive gets you to their Automobile Buying Program.

Costco offers almost exactly the same service. They are excellent. Car brokers are paid by the dealers and should be avoided; same for the AutoNation Direct system. Stick with AAA and Costco. Keep it simple:

"The AAA Auto Buying Program is the easiest way to get a great deal on a new or pre-owned vehicle, while avoiding the stress and hassles normally associated with buying or leasing a car. Receive up-front, no-haggle, guaranteed low pricing on all new makes and models and our members-only special purchase incentives on pre-owned vehicles."

You get the Vehicle Identification Number, all installed options, MSRP/invoice/cost figures, dealer incentives, the dollars and conditions for your deal, and a contact person to walk through the signing process. Generally if the dealership does the arrangements your financing will go through a major financial organization, though you certainly have the option of using your own credit union or local bank.

Gee. Who would have thought that 500,000 people a year would need professional help to buy a car? Well, obviously, people needed similar help getting mortgages in the 2000s, but very few people understood American capitalism's vulnerability to organized criminal activity.

Consumer protection is getting stronger. It has its own marketplace for protective services, its own organizations that fight the criminal wings of these capitalist businesses.

Want to walk into a car dealership, ready to spend $25,000 for a new car? Lock-and-loaded for conflict? Think that a greeting from a friendly, attractive, ethnically matched salesman is going to spare you from this corrupted Sales Manager system?

Think it's not going to happen to you? Fergedaboudit....

Please, find a competent buying service. Keep your money out of the hands of crooks.