Americans spend more than $650 billion a year on new cars — and they probably spend way too much. Chances are you’ve been there, sitting across from a smiling car salesman, sweating out the negotiations, determined to get a bargain, but convinced you won’t. You’re probably right. Dateline NBC went undercover to reveal some tricks of the trade, how, with a little sleight of hand and deception, dealerships are sweetening your deal in their favor — taking you for thousands of dollars. NBC’s Lea Thompson shares her observations on the story, as well as some important tips.
As NBC’s Chief Consumer Correspondent I have done a lot of car stories in my life. But this one is astounding and amazing. After working on this story for over a year, I am still stunned by what we continued to discover right up until airtime. And what is most disturbing is that these aren’t just tricks on consumers by a few dealers. Although not every dealer is disreputable, it appears there is a widespread fraud going on, particularly on the “back end” of car deals.
Most consumers really don’t understand the finance part when they buy a car. That naiveté allows unscrupulous dealers to add in lots of extra charges that you never see if you don’t read the fine print or sift through the paperwork.
If you finance through a dealer, we found you may never see the details of those add-ons because they are “stuffed” or hidden under a pile of papers you sign and then they are incorporated and buried in the financing documents you may never see. It appears, sometimes, that even the banks who lend the money are being defrauded.
We also found that many car dealers and lenders are in cahoots. They make backroom deals over your interest rate. We were told they charge you more than they have to and then they split the profit.
It is hard to believe that a dealer would actually forge your signature, but we found that, too.
And it all adds up to your paying thousands — literally thousands — more than you should have to for a new, used or leased car.
This story took a long time to put together, a whole lot of digging, and it took a lot of money. We actually bought a car with the help of Tori Cocain, a wonderful young woman who agreed to help us out on this story. Our expert Remar Sutton has been an advocate for the car buyer for a long time. He wrote the book on car buying, “Don’t Get Taken Every Time,” and he was with us every step of the way.
You know those names that you always see on those slates at the top of our Dateline stories? Well there are real, hardworking folks behind those names.
The producer of this story is Marsha Bartel, who has done many award winning stories for Dateline, and who literally spent the last year of her life talking to car salesman, car dealers, consumers, and whistleblowers. Chief among those whistleblowers is Duane Overholt, who, after a “life of crime in the car business,” has gone straight. Duane spent the year patiently teaching us the car business and bringing the details and the proof of what you see in our Dateline story. He has been threatened, he has been sued, but he is determined to make a difference.
Tressa Verna (we call her Terrie) did the magnificent editing on this story and Karen Heywood McKinley and Maria Afsharian did a whole lot of terrific research.
Read the tips and use the resources for how to buy a car. Be tough, do your homework, and don’t ever buy a car the same day you walk into the dealership — you may just be asking to be taken.
In response to Dateline's story, the consumer watchdog group, Public Citizen, held a news conference calling for a crackdown on car dealers nationwide. Public Citizen is writing each state's Attorney General asking for an investigation into some dealer tactics. It also wants states to pass tougher legislation that would mandate greater disclosure of finance terms and sales practices to consumers. Click here to visit their site.