Dealer's Tricks - bait & switch, etc.

exb0 · November 2005

The problem with unnecessary credit applications is the identity theft.

Last time when I was buying an Acura, the salesman complained to me that he left me several messages and I didnt call him back. When I told him that I didnt get messages from him, he pulled a piece of paper out of an unlocked file drawer in his desk and asked me to verify my phone number. To my amazement, it was another persons, with same name as mine, credit information sheet (not even the credit app). That paper had persons name, address, SSN and DOB; all the information needed to apply for credit.

That salesmans desk was in the middle of the floor, it wasnt a cube or an office. No security whatsoever. Any store employee or a customer could get into that unlocked drawer and take a stack of SSNs home with him.

Next time if I have to finance, I will fill out the credit app inside the F&I office. Otherwise, here is a check, Ill pick the car up when the check clears.

chuck1959 · November 2005

I sure would...if they had good credit! LOL Soory just trying to be funny. I understand your point. When I bought my Kia and paid cash, I gave them a cashier's check with no problem.

rroyce10 · November 2005

..... I don't doubt your experience for a minute, but you're a minority in thought and action (but I would love to have 3000 like you) .... most buyers want their vehicle "yesterday" and high end cash buyers are usually the worst ...

Now, I have no problem with taking a check from a customer thats been in the store a few times and has done business with us ... but it's a changing world, and not for the good - as mentioned above, you have credit bandits nowadays and dealers are only protecting themselves ...

When I was in Pinehurst last week, I talked to a few dealers there and the biggest problem they were having was identity theft, with: "*relatives*" (you read that right) .. that could be the son or daughter of Mr. PGA and the nephew or niece of Mr. Callaway or the brother or sister of Mrs. Titleist .... so you can see why dealers look before they leap .. one dealer had to "literally" call a famous player "on tour" and wait for the approval - unfortunately, there wasn't any .. in the meantime the vehicle had 400 miles put on it and about $1,700 of damage ....... not good.

Terry

imidazol97 · November 2005

Are you speaking in general terms that relatives of people use their identity to purchase or are you saying that high profile people's relatives tend to use the well-known person's identify for purchases?

bobst · November 2005

Chuck, do you have any idea how much a key costs these days?

bobst · November 2005

"Don't the companies have a way of running a check through without having to wait."

I doubt that very much. How could JoeBlow Motors withdraw money from our bank account?

I believe only our bank can withdraw money from our account, and they only do that when they recieve a written check and accept the signature as being ours or if they have a court order to remove money from our account.

manamal · November 2005

I would think that a wire transfer would get around many of these issues....You should be able to get instant verification of funds, and all. However, this might increase the exposure of the dealer to identity theft...what if I have your account number?

The other problem is just because the funds are added to your bank does not mean that they cleared.

Even casheres checks or certified checks are being forged.

imidazol97 · November 2005

I read about it in one of the dealer discussions here. It's like the electronic check system where you send a check to the credit card company, but they don't run it through the paper system. They convert it to an electronic check and it's debited from your account electronically. Hence the money is gone as soon as the electronic debit hits!

nonjth13 · November 2005

I live in upstate NY and always have paid cash for a vehicle. It has been many years since any dealer around here would accept a personal check. I always ask and they want a certified bank check. I do charge as much as the dealer will allow on my credit card to get the card bonus. Whether the dealer runs a credit check is immaterial to me. I'm with Terry here. Would you let a perfect stranger drive off with a new car without a reasonably ironclad assurance that you are actually going to be paid? I sure wouldn't. I know we are a rare breed, but there are some of us out there like blckislandguy who actually do pay cash and can afford to wait a couple more days to take delivery. Last car I bought the salesman called on Tuesday to tell me the car was in after a 3+ month wait and I could pick it up on Wednesday. Well, I was busy that week and said I would be over Sat am. He couldn't believe it. In case anyone has read this far and is wondering what the point of all this is, there isn't any. No extra keys either.

chuck1 · November 2005

Yes, I know they have the computer chips in them. They run about a $100.00-don't they?

wlbrown9 · November 2005

"Don't the companies have a way of running a check through without having to wait."

I remember a little discussion at a dealership a couple of years ago when I was going to put down $2000-3000 in addition to my trade. The sales guy and F&I guy talked about how much it would cost them to run the check through a check verification company. So, if they use a check verification company, they are guaranteed the check is good but it does cost them a percentage (don't know how much) that could be a major hit on a 'mini' deal if your are paying in full with a check. Not sure if all dealerships use these.

rroyce10 · November 2005

.... Actually both ... but in those particular cases, they were using the S/S# and the history of their cousin, brother-in-law, uncle, whatever .... hey, if you didn't know what Tiger Woods looked like - you could be Tiger Woods ....... well kinda ...

Terry :P

edklein · November 2005

I thought the new Check21 deal was supposed to speed up all this check processing. The big warning when this was coming down was that consumers would no longer be able to count on "float" to make sure their accounts had enough money to cover the check they were writing.

Kirstie_H · November 2005

Your post has been moved to our discussion about sales tax. You can find it here:
Vehicle Sales Tax Questions

kdhspyder · November 2005

The money isnt drawn from your account by the dealer or store it's commonly run through a service like Tele-Chek which if you are a good boy ( no bounced checks etc ) will guarantee that the check is good. Tele-Check is on the line then if you dont make good on it.

Whenever you see a Tele-Chek sign at a cahsiers window at a store etc. it works this way. Often there is a limit on how much they will honor. It may be negotiated store by store .. a Lexus store may have a higher limit than a Toyota store for example.

Any amount above the Tele-Check limit requires us to run credit to verify the person's identity, and frankly creditworthiness, but it's always with the buyer's approval and signed authorization. There are exceptions of course.

bobst · December 2005

Imidaz, are you saying my credit card company (Bank of America) has the power to remove money from my bank account at the Apple Credit Union? That doesn't sound legal to me.

kdhspyder · December 2005

I believe only our bank can withdraw money from our account, and they only do that when they recieve a written check and accept the signature as being ours or if they have a court order to remove money from our account

Correct me if I'm wrong here, imidazo, but I think what he was saying was that if you give a paper check to certain stores they can immediately convert it to an electronic check making it just like a debit card transaction... out immediatley. They then hand you back your paper check. I paid for new tires this way earlier in the year.

It's a relatively new service and it's different from Tele-Chek.

bobst · December 2005

"out immediatley"

I doubt that.

What if my bank, Apple Credit Union, realizes that your tire store accepted a check that was not written by me? I bet that money will be immediately put back into my account.

imidazol97 · December 2005

That's a better description of what I'd read. Since it's electronic, it's gone from your account or at least encumbered for electronic verification.

kdhspyder · December 2005

Nope its just like an ATM or debit card transaction. The store asking for the funds has to ( should ) ask for verifiable ID from the presenter of the check ( DL or picture ID ) but when the transaction is finished it taps into your account. Actually as imidazo.. says just above it blocks funds in your account until the transaction hits the next day or so. It's the same as using your debit card.

bobst · December 2005

Spyder, your post doesn't make any sense.

For example, what is a "verifiable ID"? I doubt such a thing exists.

You said the transaction "taps into your account". Then you say it only "blocks funds in your account until the transaction hits the next day or so". These statements are contradictory.

I can't see how the law could possibly allow your business to directly access my bank account.

By the way, what use is a debit card? A credit card does everything we want.

ddelise · December 2005

***
I can't see how the law could possibly allow your business to directly access my bank account.
***

In effect, the check clearing tools and process now allow a check to clear almost immediately, vs. the traditional 2-10 days (depending on physical location of the banks involved in the transaction). For those businesses using these tools, they receive instant clearing of the check. Their business does not access your account, but the check clearing businesses, through their electronic communications with your bank, do. Here is some further information:

The Check Clearing for the 21st Century Act ("Check 21") was signed by the president on October 28, 2003 and becomes effective October 28, 2004. The goal of the legislation is to increase the efficiency of the nation's payment system by utilizing technology.

Roughly 40 billion checks were written in 2003. In part because the 'physical item' must be transported from the financial institution (FI) of first deposit to the paying FI often stopping at one, two or three other FIs along the way, there is a huge amount of time and money expended in the check clearing process. September 11 also made it clear how dependent the effectiveness of the process is on unimpeded transportation.

Check 21 allows for "essential information" (data and image) to be captured electronically from the original paper item. Essential information includes the routing and transit number, maker's account number, check number, dollar amount, endorsements, the front and back image of the item including all endorsements, etc. The electronic data, not the original paper item, is then sent through the clearing process. Another paper item, a 'Substitute Check', can then be created from the electronic check file if necessary anywhere throughout the process that an electronic check file isn't accepted or when a consumer needs a copy of the check. The Substitute Check literally replaces the original check written.

The law also recognized that the original item is no longer returned to the maker, nor is it available to be sent back to the payee in a returned item situation, and addressed this by requiring very specific conditions that must be met in order for an item to be considered a true Substitute Check. Then and only then is a Substitute Check the legal equivalent of the originally drawn paper item with all of the same rights and warranties. It must also conform to defined industry standards in paper stock, dimension, and other generally applicable parameters.

Detecting check fraud may be more difficult as a result of the Act. But the Federal Reserve maintains that since the original check is no longer used for processing, the security of the electronic systems will reduce human access to your financial information.

In addition, the shorter processing time will allow the identification of check fraud or forgery more quickly. However, proving alterations and forgeries may become more difficult if there is no access to the original paper and ink which can provide important clues such as pressure points.

bolivar · December 2005

I mail out a few checks each month.

One of these checks is converted to an electronic debit of my account. And it clears FAST! On my statement it shows in the same section (Electronic Activity) as my other auto debit bills (such as my utility bills).

Yes, 1984 is here. Just a few years late. And, yes, this is a result of the new banking law that went into effect a short while ago.

kdhspyder · December 2005

Sorry for the confusion, I'll try harder

Have you never been asked for your DL or Picture ID when paying by check? I cant imagine No. With your picture it's considered verifiable ID. Yes you can nit pick and say anyone can forge such a document but go into any Dealership or even a supermarket and pay by check and they will ask for your DL... and write that number on your check.

You've really never paid by debit card?

My two statements you referenced were a statement of what effectively happens and a clarification of how it happens. If you use this electronic check it's like an ATM transaction.

Assuming you have $5500 in your account and put down $5000 on a vehicle with this process then went next door and attempted to buy a bedroom set for $2000 and tried to use the same process your payment would be rejected as non sufficient funds in the account. The dealership dipped into your account and put a hold on $5K. It's the way it works. Same as an ATM transaction.

But you knew that already and were just pulling my leg. Thats why I went into more detail than you needed. just playing along with you.

fordfool · December 2005

> By the way, what use is a debit card? A credit card does everything we want.

I'm with you on this Bob. I'd hate to make a checkbook entry every time I use my credit card. I'd lose track and the bank would be right there with their $39 overdraft charge. :mad:

The kids, however, bank online. Debit cards are easier to acquire, the kids use them everywhere, then check their balance online. They don't bother with paper checks and checkbooks.

bobst · December 2005

Ddelise, thanks for explaining everything. The law, as you described it, makes perfect sense to me.

bobst · December 2005

"this electronic check it's like an ATM transaction"

I doubt that.

If a crook gets my ATM card and uses it to withdraw money from my account, my money is gone.

If a crook writes an invalid check that is accepted by my bank, then my bank gives them money. However, once I prove the check was invalid, the money is put back into my account.

In short, the ATM thief gets my money. The check forger does not.

"The dealership dipped into your account"

That ain't gonna happen. Read ddelise's post.

Kirstie_H · December 2005

OK, we're well off the "dealers' tricks" track here. Let's get on topic and move this conversation to a more relevant discussion, like "any questions..."

bobst · December 2005

Kirstie, I don't think our discussion was off-topic.

A few postings ago, someone was upset because a dealer would not accept their personal check.

A few people said the money could be withdrawn from a buyers account almost immediately. If that were true, why would the dealer worry about the check being invalid? They would have their money in their pocket.

The dealer may initially get the money very quickly, but once the check is shown to be invalid, the dealer would have to give the money back to the bank.

In short, the electronic check clearing doesn't change the basic rule: If the dealer accepts a bad check, the dealer loses money.

That is why I think we buyers should not EXPECT a dealer to accept our personal checks. If they do, that's nice. If not, we should be willing to get a cashiers check or go to the bank with them and transfer the money to them.

bdr127 · December 2005

And as some put it in a previous post, "Would you personally accept a personal check for 10's of thousands of dollars from a complete stranger in exchange for your own car?"

I think that pretty much puts it into perspective.

geo9 · December 2005

Maybe Kirstie needs some X-mas cheer !

Tell her a nice KEY story along with some nice spiced
eggnog (spiced with Capt. Morgan that is) !!!!!!!!! :P

jipster · December 2005

"Maybe Kirstie needs some X-mas cheer!"

I think the thing Kirstie would want most this X-mas is for members to stay on topic...and always be civil and respectful when posting.

You guys can start by following the good example I have set. :P

STARTING.....................NOW!!! :shades:

audia8q · December 2005

I bet you were the teachers pet in school...

isellhondas · December 2005

Who got the thumbtack placed on his chair!

jipster · December 2005

" I bet you were..."

well...actually I was.

Good call...I can see why you are in management and not in sales. Oops...there I go again. :shades:

Speaking of bait and switch :surprise: ...do any of you "guys" out there ever get a customer come in with one of those coupons from the paper that advertise a new car for sale? I can't see taking a coupon to a car dealership to buy a 20-30k vehicle(maybe to the grocery store for a gallon of milk). But, can see how the dealership would think they can get a bunch of people in with this coupon practice...then switch them over to a more expensive model.

boomchek · December 2005

Not really coupons, but a few customers see advertised prices in newspaper ads from the manufacturer (lease deals, etc), and then come into the dealership and once you tell then that it's a base model that's advertised and not a loaded one they want, then they get upset.

And we get blamed for misleading advertising. And the word spreads on bait and switch discussions. :mad:

Usually manufacturers advertise the most basic models to get customers to come in to the showroom. The ads are not miselading, you just have to read the fine print (ie: trim level, transmission, downpayment if any).

So consumer: please read the fine print on print ads.

Kirstie_H · December 2005

Cheer is here... and thanks for the cozy drink!

dino001 · December 2005

I think anyone reasonable would suspect that if it's too good to be true, it probably is, but I remember several years ago a local Hyundai dealer advertised Accent for a killer price. Nice, but it had no AC and it is Florida :sick: so it was obvious "bait and switch", as no reasonable person in Florida would buy a new vehicle with no AC.

gsemike · December 2005

Let the buyer beware, but when the equipment listing for an advertised car starts off with Auto dn pw and then sneaks in Man OD the dealer is being intentionally sneaky trying to make it look like the car has Auto instead of 5 sp. Who calls it auto down power window anyway and chances are the 5 sp car can't be had if you wanted it?!?! What does the dealer expect when they tell someone that the deal is only on a 5 sd car and that they don't have any on the lot???

It's funny, in the cassette days, the equipment listing would start of with Auto Rev Cassette like that was the most important thing in the car. When cassettes were being phased out, the manufacturers must have had a big employee contest to come up with the next misleading way to include the word Auto in an ad.

prosa · December 2005

I saw a dealer's ad (Nissan, IIRC) not long ago that was touting too-good-to-be-true lease deals; examination of the fine print showed that the annual mileage allowance was 8,000 miles!

gsemike · December 2005

8000 may not be that crazy if you live in a city. I leased a Civic for 4 years while living in Queens and turned it in with 34,000 miles on it. I really regret taking out a 12k per year lease.

dino001 · December 2005

But still the worst for me is a fine print with "$3000 cash trade it allowance" and screaming words "you pay" on the "price" with that exclusion. So who actually pays that 3 grand? Santa Claus? Dwarfes? Snow White? It is not only misleading, but simply offensive to customer's intelligence.

I don't really like use of "you pay" at all, since there is also bunch of fees (some to a dealer) and tax. So even if the price is 20K, I will pay say $21.5-22K. So "you pay" is actually misleading, even if not intentionally deceiptfull. It should be "we charge" or "our price". "You pay - not a penny more" is not truthful, since there are quite a few pennies I need to fork over - I don't care that somebody else than dealer gets that money. I stil paid it...

jipster · December 2005

"...and thanks for the cozy drink!"

You get to drink on the job??? :sick: Where do I sign up? :shades:

Boomboom, perhaps you or another member can shed some light on this practice. I suppose it's just a means to generate calls and foot traffic. But, what about these advertised prices in the paper that are out every day for like a month or two. But, whenever you call they are not available.

I talked to the GM of a local Toyota dealership about this practice....on a Sienna CE model.He never gave me a satisfactory answer though. The dealership ran ads for this Sienna model for a long time, I still see the same ad on occasion a year and a half later. But, whenever I called ...it was either sold, or they didn't know anything about it. First thing in the morning one day I see this same model advertised with low financing. So, I assume they got one in...it's 7 oclock in the morning...I'll be the first one out there and buy it! I call our salesperson....says its already been sold.

Anyhow, was one ever really available to begin with? I suspect all the dealership has to do is get a model number for a vehicle they could trade for (anywhere in the U.S)knowing that it will be sold somewhere before they are able to aquire it. Oh, the GM did say something about how they send in their ads to the papers 4 weeks in advance.Which would explain why the vehicle may not be available as it had already been sold. But, I suppose asking the dealer to call in and cancel or X out the vehicle sold would be to much trouble....not good for business.

chuck1 · December 2005

"So who actually pays that 3 grand? Santa Claus? Dwarfes? Snow White?"

It's just another day at the car dealers lot. This is what I mean by saying the car business is not even remotely related to the real business world, and how you have to treat clients, customers, etc. If I insulted my customers intelligence like this, I wouldn't have any customers.....

drewba · December 2005

Not to mention that the advertised price is frequently after College Grad cash, military credit and loyalty cash. But if you don't qualify for those, as many (most) wouldn't, you can't buy a car for that price.

dino001 · December 2005

Yeah, I hate those, too. Purely disingenuous.

isellhondas · December 2005

The attract the people who are looking for the "deal" that is too good to be true. These people flock to these stores that run the full page, screamer ads!

They read what they want to read!

I'm so glad we don't do this!

boomchek · December 2005

The new car lease ads are usually put out by the manufacturers not the dealers.

So when a customer comes in and wants to lease a Civic for $199/month (in 2005) I usually ask them if they're familiar with the car. Automatic tranny, a/c, powert group would move you up to a higher model and would cost extra.

Manufacturers always advertise the least expensive model to get the traffic into the showroom. However we have thoise cars available, and if they're not available then we can get them.

If a dealer says a car is sold out and not avaialbe anymore, especially if they advertise it, then they do have the ability to order it in, unless it's at year end.

gsemike · December 2005

I have a friend that leased a no options Maxima for a very good price a couple of years ago. He saw the deal in the paper and specifically wanted a 5 sp, artfully noted as Man OD.

The dealer was completely like "you're not going to like it with the stick" and had him test drive one with an automatic, leather and moonroof. When he didn't budge the reluctantly sold him the one of the lot with stick, cloth seats and maybe even hubcaps. A nice set of after market wheels and he had a sharp looking Max with the 5 sp that he wanted all along.

My friend said that the dealer couldn't beleive that they weren't able to add anything on to the car. It was the chilliest closing he ever sat through.

peterdh2000 · December 2005

Ford dealers in Seattle like to do the screamer ad, but in order to get the recently advertised price on a 2005 Mustang V-6 you had to:

be an ex-military, recent college graduate, outfitting the car with mobility controls, to be used for a driving school.

Really.

Ones that do it are the biggest Ford stores around here. Guess it does work... :P

Dealer's Tricks - bait & switch, etc.

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Dealer's Tricks - bait &amp; switch, etc.

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Dealer's Tricks - bait & switch, etc.