|August 6, 2014|
Certain auto dealers have engaged in false and misleading business practices that have led to serious financial consequences for consumers, particularly consumers that have had difficulty in the past in obtaining credit. Car dealers are charging outrageous interest rates, sometimes over 20%, that are not properly disclosed to the buyer. Expensive and usually useless "add-on products" or insurance policies are often sold with the loans, and again their cost is not properly disclosed.
In other instances, the New York Times reports that auto dealers have included incorrect and false information on auto loan applications, “leading people who had lost their jobs, were in bankruptcy or were living on Social Security to qualify for loans that they could never afford.”
The consequence of these deceptive business practices is that many consumers have been tricked into agreeing to loans with such high payments that they cannot afford to pay. When the consumer falls behind on his or her car payments, their car is repossessed. All the consumer is left with in the end is greater debt. The obligation to pay off the auto loan remains even though they no longer own the car.