KCBS Dealer Investigation in LA

[sallen1]

This is for dealers and Gen. Mgrs.

Have you seen the recent series of reports by a KCBS undercover investigation in Los Angeles? Started Sunday 5/15 and the first story resulted in a state DMV search warrant and confiscation 12 mos. car deal information. It's at channel2000.com under "special assignment". While the 'media' likes the hype, there are some very serious issues.

Why am I bringing this to your attention? If only half of what is alleged in the story is true, there are some big state and federal legal problems for the dealers (and employees). Most of the issue deals with the F&I office and what happens to the customer after the sales process. It has to do with products being added to contracts unknown by the customer. In reality, the customer is responsible for reading the contract before signing, but how many do it?

Aftermarket vendors will try to get your managers to use products that boost F&I profit. Obviously, I'm in business to make money but there's a level of resonableness that must be accounted. The GM's and dealers in the story state they did not know what their employees were doing, but that won't hold in court.

Please look at your car deals and see if there's a common thread where every deal has some unfamiliar product or service charged. Learn how each deal is structured and what tools/calculations are being used and make sure each item is justified. You'll save yourself a big headache.

I'm not sure where the CBS story is going, but there is ton of response. CBS is conducting a call-in session with DMV investigators taking complaints. If there's anything the regulators want is a project to justify their existence and now they have one.

Most dealers do the right thing, day in and day out. But the suprise is that some of the more reputable dealers have been caught in this sting and they may not have know what was going on. However, the DMV is a 'guilty until proven innocent' agency and you could find your licence suspended while they investigate.

Scott

[mbowers]

As I read the reports, the implication was that the KCBS piece on Gunderson Chevy was just the beginning of a series of investigative reports on car dealers in the LA area.