Car dealers adopt outlawed mortgage tactics, new consumer agency powerless against them

[Roland99]

Car dealers adopt outlawed mortgage tactics, new consumer agency powerless against them
http://www.iwatchnews.org/2011/04/11/4070/buyer-beware

After the financial crisis exposed the devastation caused by predatory lending, state and federal authorities vowed to protect consumers from practices that lured them into debt they couldn’t afford.

But Congress kept most auto loans — the second largest source of debt for Americans — out of the reach of the fledgling U.S. Consumer Financial Protection Bureau. And now many of the same tactics that led to the mortgage meltdown — like fudging facts on the loan application or charging consumers hidden fees — continue to plague auto loans, an investigation by the Center for Public Integrity found.

The politically powerful industry has also mastered a few high-pressure tactics of its own. Chief among them is the “yo-yo,” where dealers let buyers drive a new car home in hopes of locking them into a deal and later tell them their financing fell through. The tactic can lure buyers to accept a higher interest rate.

And while the financial crisis rendered subprime mortgages extinct, Wall Street is once again buying up bundled subprime auto loans, fueling a market aimed at the most vulnerable consumers and relieving dealers of the risks of making bad loans.

Caveat emptor, indeed.

[xchrom]

1. ...

:mad:

[sinkingfeeling]

2. I have a 1991 and a 1999. I will never buy another new automobile in my lifetime.

[dixiegrrrrl]

3. Never have, never will.

Never have financed, either.

damn sharks.

[Roland99]

4. Mine's over 7 years old, 160k miles

and should easily last me another 7 years.

If we do end up with something like a minivan (my family size went from 2 to 6 last year :) ), I'll finance thru a credit union at low or no interest.

[jdlh8894]

5. I might buy a new vehicle,but it will be a cash deal.

Haven't made a car payment in over 25yrs.And that was only because I got that as a take over payment deal. Had to make one monthly,then paid it off.

[Roland99]

6. I don't mind having a payment...esp. if it's at 0% or very, very low interest

I figure by the time I have the thing paid off, I'm paying the lender with dollars that are worth less than they were when I bought the car.

[Lance_Boyle]

7. 'caveat emptor' meets 'I want it NOW, Daddy!'

Not very many emptors apply very much caveat in these days of overly self-indulgent instant gratification.