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Buying a Used Car? Get a "Peach," not a "Lemon"

By Donna Miles
Special to American Forces Press Service

WASHINGTON, July 28, 2000 – The 20-year-old Marine couldn't resist the deal advertised in his base newspaper: a free bus ticket from his Washington duty station to Virginia Beach, Va., to buy a used car.

Once the Marine arrived at the dealership, a salesman informed him he'd have to pay for his own trip home if he didn't buy a car. The salesman pressured the Marine into taking out a loan -- at 24 percent interest -- to buy both a car and an extended warranty.

On the trip back to Washington, the Marine's "peach" of a car turned into a "lemon." It started sputtering. When the Marine called the dealer for help, he was told simply to top off the water levels and continue on his way. The car survived the trip, but soon after left the Marine stranded on the roadside. The dealer refused to honor the warranty, claiming the Marine had violated its terms by driving the car when it needed repairs.

Maj. Charles Hale, chief of client services for Marine Corps headquarters legal assistance, said deals involving both new and used cars are among the biggest consumer problems young service members confront. Neither the Defense Department nor the services keep statistics on how many military members buy used cars that turn into lemons as soon as the deal is sealed. But Lt. Col. Walter Skierski, chief of the Air Force Legal Assistance Division, said firsthand experience in Air Force legal assistance offices tells him too many too often.

Skierski said some cars have major mechanical problems the dealer doesn't reveal and the warranty doesn't cover. Some vehicles have no warranties at all, and the buyers aren't told and sometimes don't think to ask. Service members who buy a car "as-is" end up having to pay out of pocket for anything that goes wrong after the sale. Some end up deeply in debt, he said.

"We hear about cases like these constantly," agreed John Meixelle, an attorney-adviser with the Army Legal Assistance Office. "The most unfortunate thing is that the victims are usually junior enlisted members who have bad credit or are trying to establish credit -- and who can least afford to be taken advantage of."

Legal assistance offices often serve as military members' first line of defense against fraudulent used car dealers, helping to resolve disputes between buyers and sellers. And for dealerships that use deceptive practices, commanders are increasingly exercising a powerful right: putting them off limits to service members. "Sometimes the mere threat of that is enough to bring a dealer into compliance," Meixelle said.

The military also is taking steps to help educate service members and their families about their consumer rights when buying used cars or other goods and services. The Navy's preventive law program, for example, uses commanders' briefings, brochures and base newspaper articles to inform sailors and their families about frauds they're likely to encounter -- including fraudulent used car deals, explained Cmdr. Ann DeLaney, deputy assistant judge advocate general for legal assistance.

Federal Trade Commission attorney Steve Baker suggested consumers kick the tires, try out the radio and go for a test drive when buying a used car. But, he said, many don't look for what he calls the most important thing in a used car, truck or van: the buyers guide.

By law, all dealers must post a buyers guide inside each used

vehicle for sale. It spells out in writing what warranty coverage, if any, consumers are getting for their money. It lists the major mechanical and electrical systems on the vehicle, including some of the major problems consumers should look out for. It also tells them whom to contact at the dealership if there's a problem after they buy.

Yet, Baker said, many consumers don't know to look for the guide, and an alarming number of dealers don't post them.

The FTC recently inspected used car dealers on Chicago's North Shore, just outside the gates of Great Lakes Naval Training Center, and found that more than one-third of the 14 used car dealers surveyed didn't comply with the law. Almost one-fourth of the cars on their lots had no buyers guides, and many of the posted guides were incomplete or inaccurate. The noncomplying dealers will be fined by the state and could face prosecution by the FTC for future violations.

Baker acknowledged that the compliance rates weren't the worst he's seen nationwide. "But what's particularly disturbing," he says, "is that the dealers are located in an areas where the consumers, such as new military trainees, may not understand their rights to this information." To help protect this population, he said, the FTC plans to conduct more inspections of used car dealers near other major military bases.

Baker said used car dealers who don't display buyers guides send consumers an important message. "Not displaying the Buyers Guide shows a blatant disregard for the law and for their customers," he said. "If the dealer isn't giving them the information they're entitled to, consumers should take their business elsewhere -- to a dealer who will."

He suggested used car shoppers take another important step before shelling out. "Get the vehicle inspected by an independent mechanic that you've hired yourself before you buy," Baker said. "It will cost you a few dollars, but could save you a lot of money in the long run."

The FTC offers additional tips to help protect consumers from ending up with a lemon:

o Check out the vehicle's repair record, maintenance costs and safety and mileage ratings in consumer magazines or online. Look up the vehicle's "blue book" value and be prepared to negotiate the price.

o Ask for the maintenance record from the owner, dealer or repair shop.

o Test drive the vehicle on hills, highways and in stop-and-go traffic.

o Get all promises in writing. Oral promises are worthless.

o Ask to see a copy of the dealer's warranty before you buy.

o Check out the dealer with local consumer protection officials.

o Recognize that warranties are included in the price of the car; service contracts cost extra and are sold separately.

o Avoid buying a vehicle "as is." The dealer has no responsibility for making repairs after the purchase, even if the engine falls out as you're driving off the lot.

o Use extra caution when buying a used car privately, because no buyers guide is required.

o Consider using the Internet to research the vehicle's title history. For a small fee, you can use a service to help determine, for example, if the vehicle's odometer was rolled back.

"There's no way to absolutely guarantee that a service member's used car experience is going to be positive," Baker said. "But by taking steps to protect themselves, and getting educated about their rights in the marketplace, young service members can help avoid the potential pitfalls."

(Donna Miles works for the Federal Trade Commission and also has written frequently for the American Forces Press Service while on duty with the Army Reserve.)

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