St. Louis, Mo., Dec. 20, 2010 – A Better Business Bureau (BBB) study of the used car industry in eastern Missouri and Southern Illinois finds that some dealers are taking advantage of buyers with poor credit by selling cheap vehicles that don’t last 30 days. In some cases, the vehicles barely got out of dealers’ lots before they broke down.
More than 13,000 complaints against used car dealers were filed with the BBB last year, making it the seventh most-complained-about industry nationwide. The study, based on complaints to the BBB and a BBB survey, focused on companies that sell only used cars, excluding franchised auto dealers.
Michelle L. Corey, BBB president and CEO, said that many of the problems with the used car market result from failures on the parts of dealers, consumers and consumer advocates.
“Consumer advocates have failed to adequately educate the public about the safeguards that need to be taken when buying used cars,” Corey said. “Many customers have failed to educate themselves about the laws governing used car purchases or have neglected to get an independent inspection of the cars they purchase. And a few dealers prey on consumers by selling cars that they know are defective.
“This study is not critical of all retailers who sell used cars, and should not be interpreted that way. This study does show, however, that there is room for improvement,” Corey said.
A Florissant woman said she bought a 1997 Ford Expedition from A & E Auto Sales in East St. Louis, Ill. The car seemed to be operating well on the test drive, so she paid $800 down and agreed to pay $150 every two weeks to the dealer to meet the remainder of the $3,000 purchase price. The car began making noises before she arrived home. The dealer did a tune-up, charging her $25 for parts, but the car still was making noise when she left the dealership.
The dealer told her it was an exhaust problem, but that the business didn’t work on exhaust systems. She took the car to a muffler shop, where she was told the car needed $2,000 to $3,000 in repairs. Unable to pay for the repairs, she parked the car behind her house. A&E Auto Sales later repossessed the car.
A former St. Louisan said she bought a 1999 Ford Contour from Ken’s American Motors, also in East St. Louis. Although the car was sold without a warranty, she said she assumed it was mechanically sound and paid $900 down and agreed to pay $206 a month for two years to pay off the $4,000 price of the car.
She began experiencing problems with the car almost immediately, including several breakdowns on highways. Ken’s tried to fix it several times, but when she took it to another repair shop, she was told that the engine was damaged and that the car had failed safety and emissions tests. Ken’s took possession of the car, and she thought they would repair it, but nothing was done and the car was repossessed.
Consumers related their problems to the BBB during the study and in complaints. They told the BBB that they believe some dealers are ignoring federal and state laws designed to protect the consumer or are skirting those laws. The study found that some dealers fail to display Buyer’s Guides required by the Federal Trade Commission (FTC). The guides display warranty information, such as the length of the warranty and any parts covered by the warranty.
When BBB staff members shopped six used car dealers in Missouri and Illinois, they found one dealer that displayed only two Buyer’s Guides on the approximately 20 cars for sale. Another dealer displayed guides on about half of the cars on his lot.
Forty two percent of the consumers who answered a BBB survey said that advertising was their primary reason for choosing a used car dealer. Location was the primary factor for 36 percent. The BBB examined websites for 46 used car dealers and found that 37 percent of them made questionable advertising claims as defined by the BBB’s Code of Advertising or federal and state laws.
The BBB’s study recommends:
- That agencies responsible for enforcing laws on consumer protection and the sale of used cars be more vigorous in their enforcement of those laws.
- That the consumer protection agencies, trade associations and others, including the BBB, step up efforts to educate the public, particularly those of less means, regarding their rights in buying used cars.
- That the same agencies also increase efforts to inform sellers of used cars of their obligations under the various laws involved in selling used cars.
- That the Missouri Legislature consider tightening the statutes to require that used car dealers provide at their expense completed emissions testing certificates, as is now required regarding safety inspections.
- That consumers read contracts and the Buyer’s Guide before making a purchase. Consumers should have verbal promises about the vehicle’s condition or promised repair in writing. An independent diagnostic inspection is also recommended.
- That regulation or legislation be considered by the appropriate Missouri authorities to prohibit dealers who sell only used cars from performing safety or emissions inspections on a used vehicle sold by the same dealer.
The study listed 11 companies that have received the most complaints at the BBB in the past three years and which have a rating of D or F. They are, in order of the number of complaints received:
- Ken’s American Motors, 3001 Camp Jackson Rd., East St. Louis, Ill. – 126 (F)
- Car Credit City, 12750 St. Charles Rock Rd., Bridgeton, Mo. – 64 (D)
- Insta Credit Auto Mart, 1690 Magnolia Dr., O’Fallon, Mo.; 910 N. Bluff Rd., Collinsville, Ill., and 1807 W. Highway 50, O’Fallon, Ill. – 52 (F)
- A & E Auto Sales, 3338 Camp Jackson Rd., East St. Louis, Ill. – 50 (F)
- St. Louis Car Credit, (a/k/a Preowned Auto Sales), 2111 and 2766 Gravois Ave., St. Louis, Mo. – 43 (F)
- Auto Centers of St. Louis, 1350 N. Lindbergh Blvd., Florissant, Mo. – 41 (D)
- Auto Buy Credit, 10250 W. Florissant Ave., and 4101 Chippewa St., St. Louis, Mo. - 31 (F)
- Auto Depot LLC, 10059 St. Charles Rock Rd., St. Ann, Mo. - 30 (F)
- Auto Credit Mart LLC, 8440 St. Charles Rock Rd., St. Louis, Mo. – 28 (D)
- Paylater Auto Sales, 2916 Camp Jackson Rd., East St. Louis, Ill. – 28 (F)
- Cahokia Motors Inc., 2600 Camp Jackson Rd., Cahokia, Ill. - 23 (F)
The BBB advises consumers in the market for a used car to:
- Check the Buyer’s Guide - usually posted in the window - for any warranty information. Do not rely on verbal promises not specified in the guide.
- Before buying a car, take it to a mechanic for an independent inspection.
- Insist that the dealer provide you with a copy of the Buyer’s Guide, as required by law.
- If you buy a car “as is,” there is no guarantee that it won’t be useless the next day.
- If you buy a car in Missouri, do NOT sign a “junk” or salvage affidavit. If you do, you forfeit your right to have the dealer pay for a safety inspection and pay for repairs if the car fails emissions testing.
- A safety inspection does not guarantee that the car is reliable.
The Used Car Study can be downloaded or read online at:http://stlouis.bbb.org/Storage/142/Documents/Used%20Car%20Study%202010.pdf
Consumers can learn how to protect themselves or find reviews of businesses or charities by calling (314) 645-3300 or by going online to www.bbb.org.
Contacts: Michelle Corey, President & CEO, 314-645-3300, email@example.com, or Chris Thetford, Director of Communications, 314-645-3300, firstname.lastname@example.org