What you need to know about car dealership closures

The economic recession is hitting car dealers especially hard. It’s estimated that 700 dealers have closed this year so far. And with ailing automakers looking to consolidate, additional dealer closings are expected. So car buyers need to be extra vigilant to make sure they don’t become victims when dealers hit the skids.

Here are some tips:

• Use a credit card. Whether you’re making a down-payment, ordering parts or accessories, or getting repairs or service, use a credit card. If the dealer fails before your vehicle or parts are ready or before you have a chance to complain about shoddy or incomplete work, you can challenge the payment with your card issuer. If you pay with cash, check, or debit card, you’ll likely be out of luck. Just be sure to use a credit card with no balance so that you don’t pay finance charges.

• Don’t let a dealer pay off your loan. When trading in a vehicle, car owners typically leave it to the dealer to pay off the balance of any loan, using either the equity in the trade-in or by adding the amount to the new loan. But that’s dangerous. In the past, cash-strapped dealers have delayed the payoff or missed it altogether. If that happens, you can end up with a damaged credit score or on the hook for the amount still owed on the trade-in. So while it may be inconvenient, it’s best to pay off the vehicle yourself, before trading it in.

• Make sure the loan was paid. Similarly, if you’re buying a used vehicle, make sure there’s no outstanding lien. If there is, you may find that your “new” used car suddenly has been repossessed, even though you’re making your payments on time. You can avoid the problem by insisting that the dealer obtain a permanent vehicle registration instead of letting you drive away with a temporary one. Also, check the paperwork before you buy and make sure the dealer has a lien release or a title with no lien holder listed. 

• Make them it do it now. If the dealer is promising to fix or replace something in a used car or provide some additional service or accessory for your new one, don’t let him put it off. You’ll likely be out of luck if the dealer disappears. Instead, make the dealer fulfill any promises before you accept the vehicle.

• Scrutinize the paperwork. Making sure everything is correct is especially important these days because if you end up signing a contract that contains fraud or misrepresentation and the dealer fails, it may be difficult getting your money back, even if you can get a regulatory agency or court to rule on your behalf. Before signing, verify that the deal is exactly as you expect. Is the negotiated price correct for both the vehicle you’re buying and your trade-in? Is the loan amount and interest rate exactly what you were quoted? Are there any services, add-ons, accessories, fees, or other extras listed that you didn’t authorize? Don’t rush to sign, no matter how much the dealer insists that the fine print is just a formality.

• Check that used car thoroughly. If you’re relying on a dealership-provided warranty, as opposed to the remainder of the manufacturer’s warranty or third-party coverage, you could be on your own if the dealer fails. That’s all the more reason to have any used car you’re considering looked over by an independent mechanic. —Anthony Giorgianni

Comments

[used car dealer]

Good information about used car dealer.Really economic recession is hitting car dealers especially hard.