WISCONSIN: The Federal Trade Commission (FTC) has fined three auto dealerships in Rhinelander, Wisconsin $1.1 million for overcharging American Indians based on their race and appearance. The dealerships were found to have charged American Indians hundreds or even thousands of dollars more in costs than non-Latino White customers. The dealerships also added charges for add-ons like optional gap insurance policies and service plans that were spread over time, making it difficult for customers to spot. In some cases, the dealerships falsely told their buyers that the add-ons were required to buy or finance the car.
The Rhinelander dealerships and their general manager have been ordered to stop these discriminatory and illegal practices and pay $1.1 million to reimburse customers who paid hundreds or even thousands of dollars more in financing costs and add-on charges. The FTC warns car buyers to watch out for financing mark-ups and unwanted add-ons. Dealership financing often comes with marked-up interest rates, so it’s important to shop around for financing. Start with banks, credit unions, and other financing companies. Get pre-approved and use that offer to negotiate with the dealer.
It’s also important to read the sales contract and financing agreement carefully. Make sure the terms you agreed on match what is in the contract. Get answers about any extra fees you don’t recognize or want. If you’re not getting what was promised, you don’t have to take the deal. Walk away if you’re not satisfied.
Some illegal tactics are hard to spot, but here’s how to avoid overpaying for a car.
- Shop around for financing. Dealership financing often comes with marked-up interest rates. It’s not your only option. Start with banks, credit unions, and other financing companies. Get pre-approved and use that offer to negotiate with the dealer.
- Read the sales contract and financing agreement carefully. Make sure the terms you agreed on match what is in the contract. Get answers about any extra fees you don’t recognize or want.
- Walk away if you’re not getting what was promised. You don’t have to take the deal if you’re not satisfied.
The FTC reminds car buyers that it’s unfair and illegal to increase the amount someone ends up paying to buy or lease a car based on their race or appearance. If you believe a dealership discriminated against you or charged hidden fees, please file a report at ReportFraud.ftc.gov. Learn more about your rights when buying or financing a car at ftc.gov/cars.
Image Source: FTC https://consumer.ftc.gov/consumer-alerts/2023/10/overcharging-car-buyers-based-how-they-look-thats-illegal-0?utm_source=govdelivery
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