July/August 2009 Issue

Five Ways Car Dealers Rip Off Soldiers (and Everyone Else)

From the yo-yo sale to the stealth repo.

Photo used under Creative Commons license by Flickr user <a href="http://www.flickr.com/photos/bitzcelt/">bitzcelt</a>.

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THE PHANTOM TRADE: Navy Culinary Specialist Joe Lee thought he’d gotten a sweet deal on a used Mercedes. Then he learned that the Norfolk, Virginia, dealer never paid off the loan on his trade-in, a common scam. It simply sold his old Hyundai and pocketed the cash, plus money he’d put up to cover the old loan. Now Lee is stuck with two payments.

THE YO-YO SALE: In this classic credit ruse, you leave the lot with one interest rate only to be called back and asked to pay a higher one. Army Specialist Michael Hill smelled a rat after his Florida dealer claimed financing had fallen through on the used Acura he’d bought the week before. He and his wife refused to bring it back, so the dealer retaliated with phone calls, five an hour, threatening arrest—until they hired a lawyer.

THE HOT BOX: If you fall for the yo-yo (see above) and return the car, then they’ve really got you. Airman Sandy Lieu was stuck at a Florida dealership for more than six hours; salespeople threatened to have her arrested if she took the car back home, but if she ditched it there, they’d impound it at her expense. When Lieu balked at the higher interest rate, a saleswoman claimed she was “making the Air Force look bad.”

THE STEALTH REPO: In June 2006, former Navy Petty Officer James Tapio, recently disabled in Iraq, tried to buy a used Ford Expedition. The Florida dealer jerked him around for months with various yo-yo scams—making him sign new contracts and put down more cash. Then Tapio woke one morning to find his ride repoed without explanation. The dealer refused to return Tapio’s trade-in car or his $5,000 down. Tapio finally got a lawyer and prevailed when the case settled.

THE NO-SERVICE CONTRACT: Used car dealers, amazingly, are not required to disclose a car’s known defects to the buyer, a fact that makes the service contracts they peddle even dicier. When the front end of Marine Corporal Adam Nowak’s Mitsubishi Eclipse collapsed on the road, his overpriced contract wouldn’t cover repairs—the car had previously been in a head-on collision. His dealer refused to provide a refund.

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We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

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