Bbb Study Shows Some Used Car Dealers Taking Advantage Of Buyers
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Monday, December 20, 2010
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CloseComment.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 in the region. 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.”
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 that consumers in the market for a used car should:
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://cms-admin.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.
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Showing posts with label repofinder. Show all posts
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Friday, December 21, 2012
Tuesday, February 1, 2011
http://repofinder.com - http://money.cnn.com/2011/02/01/news/companies/repo_spike_mtv/
Repo men: The new face of reality TV
By Aaron Smith, staff writerFebruary 1, 2011: 1:14 PM ET
NEW YORK (CNNMoney) -- The producers of "Jersey Shore" are launching a reality show about a topic that's attuned to tough times: repossessed cars.
Spike TV, which is part of MTV, is about to begin production of "Repo Games," a quiz show hosted by repo men and starring hapless car owners who fall behind on their payments, according to MTV spokesman David Schwarz.
0Email Print But all is not lost. On this show, they'll have one last chance to save their cars. The dispossessed owner can earn their cars back, fully paid, if they correctly answer three out of five trivia questions.
"They're fun questions, seemingly easy questions, the stuff that the majority of people can answer," he said. "We're not trying to stump people with impossible questions."
For example, they might have to identify state capitals, said Schwarz. But if they don't get three questions right, it's off to the impound yard.
"It's a show with real stakes involved," he said.
Sneak peek at Super Bowl ads
The show brings to mind "Repo Man," the cult comedy flick from the 1980s starring Emilio Estevez as a suburban punk who gets recruited into the often-hazardous job of repossessing cars.
But unlike the movie, "Repo Games" is actually hosted by real repo men who snatch cars for a living, not actors, said Schwarz.
The show won't just be about people who are too broke to make their car payments, he said. It will involve a cross-section of cars and people, including rich owners with luxury cars who space out on making payments.
"People who have had their car repossessed range from Paris Hilton to your average Joe," he said.
Schwarz said the show is currently in production and will air this spring.
By Aaron Smith, staff writerFebruary 1, 2011: 1:14 PM ET
NEW YORK (CNNMoney) -- The producers of "Jersey Shore" are launching a reality show about a topic that's attuned to tough times: repossessed cars.
Spike TV, which is part of MTV, is about to begin production of "Repo Games," a quiz show hosted by repo men and starring hapless car owners who fall behind on their payments, according to MTV spokesman David Schwarz.
0Email Print But all is not lost. On this show, they'll have one last chance to save their cars. The dispossessed owner can earn their cars back, fully paid, if they correctly answer three out of five trivia questions.
"They're fun questions, seemingly easy questions, the stuff that the majority of people can answer," he said. "We're not trying to stump people with impossible questions."
For example, they might have to identify state capitals, said Schwarz. But if they don't get three questions right, it's off to the impound yard.
"It's a show with real stakes involved," he said.
Sneak peek at Super Bowl ads
The show brings to mind "Repo Man," the cult comedy flick from the 1980s starring Emilio Estevez as a suburban punk who gets recruited into the often-hazardous job of repossessing cars.
But unlike the movie, "Repo Games" is actually hosted by real repo men who snatch cars for a living, not actors, said Schwarz.
The show won't just be about people who are too broke to make their car payments, he said. It will involve a cross-section of cars and people, including rich owners with luxury cars who space out on making payments.
"People who have had their car repossessed range from Paris Hilton to your average Joe," he said.
Schwarz said the show is currently in production and will air this spring.
Thursday, January 20, 2011
http://www.repofinder.com - http://www.bakersfield.com/news/local/x864760413/Wholesale-car-auction-coming-to-Bakersfield
Wholesale car auction coming to Bakersfield
BY JOHN COX, Californian staff writer
Felix Adamo / The Californian
The vehicles are starting to arrive for Jim Pennington's auction next week. Pennington operates out of a parking lot next to the old Meadows Field terminal. It won't sell to the general public, but a wholesale vehicle auction opening for business Wednesday at Meadows Field is expected to offer savings to car dealers and credit unions that now pay to transport used vehicles for sale outside the county.
Founded by third-generation auctioneer Jim Pennington, Western Sierra Marketing, or WSM, is the only car auction of its kind in Bakersfield. As such, the company has won the support of local businesses that buy or sell used vehicles.
"If he can make it work, I think it'll be a good thing for everybody," said Dan Hay, president and general manager of Jim Burke Ford.
Similarly, the senior vice president of lending and credit at Bakersfield-based Kern Schools Federal Credit Union, Rudy Tafoya, said transportation comprises a significant portion of a credit union's cost of dealing with repossessed vehicles.
"Any vehicle that doesn't have to be transported, if you will, to another area ... is a savings," he said.
Used vehicles make up a vital part of Bakersfield's auto sales industry. Buyers often show up to a new car lot with an older car for trade. If the transaction goes through, the dealer decides whether to recondition the used vehicle and keep it for possible resale, or immediately ship it off to auction.
While two large companies dominate U.S. auto auctions, Pennington said that smaller independents are able to compete on customer service.
But first they have to establish relationships with dealers, which is why last summer the former owner of Western Stockman's Market began meeting with car dealers as far away as the high desert, the coast and around the Central Valley.
"I kept hearing the same thing: 'If you build it, we'll come,'" Pennington said.
Linking up with two business partners, fellow auctioneer Norman Haight and auto broker Larry Champagne, Pennington leased parking space at Meadows Field's William Thomas Terminal. The first auction there is set for Wednesday, when Pennington hopes to sell 100 to 200 vehicles at a rate of one a minute.
The auction is set to take place once every two weeks, then possibly go weekly.
Only people with state-issued auto dealer licenses may participate. WSM plans to charge buyers and sellers a fee based on the price of the vehicle sold.
McClure's Monthly Motors, in Bakersfield, spends as much as $125 to have a car delivered for sale to Fresno -- more than that if the auction is in Los Angeles, owner Brian McClure said. But if WSM succeeds, he added, he can drive the vehicle to Meadows Field himself.
McClure said WSM's success will depend on how many cars the company attracts for its auctions and how many buyers show up to bid.
"I've got my fingers crossed that they're going to be successful," he said.
BY JOHN COX, Californian staff writer
Felix Adamo / The Californian
The vehicles are starting to arrive for Jim Pennington's auction next week. Pennington operates out of a parking lot next to the old Meadows Field terminal. It won't sell to the general public, but a wholesale vehicle auction opening for business Wednesday at Meadows Field is expected to offer savings to car dealers and credit unions that now pay to transport used vehicles for sale outside the county.
Founded by third-generation auctioneer Jim Pennington, Western Sierra Marketing, or WSM, is the only car auction of its kind in Bakersfield. As such, the company has won the support of local businesses that buy or sell used vehicles.
"If he can make it work, I think it'll be a good thing for everybody," said Dan Hay, president and general manager of Jim Burke Ford.
Similarly, the senior vice president of lending and credit at Bakersfield-based Kern Schools Federal Credit Union, Rudy Tafoya, said transportation comprises a significant portion of a credit union's cost of dealing with repossessed vehicles.
"Any vehicle that doesn't have to be transported, if you will, to another area ... is a savings," he said.
Used vehicles make up a vital part of Bakersfield's auto sales industry. Buyers often show up to a new car lot with an older car for trade. If the transaction goes through, the dealer decides whether to recondition the used vehicle and keep it for possible resale, or immediately ship it off to auction.
While two large companies dominate U.S. auto auctions, Pennington said that smaller independents are able to compete on customer service.
But first they have to establish relationships with dealers, which is why last summer the former owner of Western Stockman's Market began meeting with car dealers as far away as the high desert, the coast and around the Central Valley.
"I kept hearing the same thing: 'If you build it, we'll come,'" Pennington said.
Linking up with two business partners, fellow auctioneer Norman Haight and auto broker Larry Champagne, Pennington leased parking space at Meadows Field's William Thomas Terminal. The first auction there is set for Wednesday, when Pennington hopes to sell 100 to 200 vehicles at a rate of one a minute.
The auction is set to take place once every two weeks, then possibly go weekly.
Only people with state-issued auto dealer licenses may participate. WSM plans to charge buyers and sellers a fee based on the price of the vehicle sold.
McClure's Monthly Motors, in Bakersfield, spends as much as $125 to have a car delivered for sale to Fresno -- more than that if the auction is in Los Angeles, owner Brian McClure said. But if WSM succeeds, he added, he can drive the vehicle to Meadows Field himself.
McClure said WSM's success will depend on how many cars the company attracts for its auctions and how many buyers show up to bid.
"I've got my fingers crossed that they're going to be successful," he said.
Tuesday, January 4, 2011
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Auto lenders approve more subprime borrowers
By G. Chambers Williams III • THE TENNESSEAN • January 4, 2011
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Twitter FarkIt Type Size A A A Next Page1| 2Previous PageAs the auto industry continues to make a slow recovery from tough times of the past two years, lenders are finally loosening credit restrictions and approving car loans for customers with less than prime credit ratings.
In the third quarter last year, for instance, the share of new vehicle loans to "credit-challenged" consumers rose 12.7 percent compared with the same period in 2009, said Experian, one of the nation's major credit reporting agencies.
Loans to borrowers with subprime credit scores as low as 550 were among categories that grew the most.
The shift comes just as new car sales are picking up momentum. While the official tally for U.S. automobile sales in 2010 won't be out until this afternoon, analysts say full-year deliveries probably rebounded to about 11.5 million vehicles from 10.4 million in 2009, bolstering industry confidence in consumers' willingness to buy despite economic uncertainties.
"Right now, what we're seeing is growth in auto lending across the board," said Jeremy Anwyl, CEO of the auto research Web site, Edmunds.com. "There is a lot of money sitting out there and very few ways for investors to put it to work. What those investors are realizing is that there is money to be made in subprime auto lending."
For Middle Tennessee car dealers, the easier credit has helped boost sales.
Credit restrictions were the biggest reason people stopped buying new cars during the recession, but "that's not a problem anymore," said Marty Horn, sales manager at Nashville's Crown Ford.
"We're not having any trouble finding financing for anyone with a score in the 600s," he said. "We can get most people financed through Ford Credit, and if that's not available, we have other lenders ready to step in."
Terms are getting back to normal, as well as loan-to-value ratios, basically how much money a lender will advance on a vehicle compared with its book value.
"We're seeing loans of up to 140 percent of value from some lenders, and Capital One is by far our best lender for the subprime customer, which is below a 620 score," said Michael Creque, general manager of Alexander Chevrolet-Cadillac in Murfreesboro.
Next Page1| 2Previous PageAs the auto industry continues to make a slow recovery from tough times of the past two years, lenders are finally loosening credit restrictions and approving car loans for customers with less than prime credit ratings.
In the third quarter last year, for instance, the share of new vehicle loans to "credit-challenged" consumers rose 12.7 percent compared with the same period in 2009, said Experian, one of the nation's major credit reporting agencies.
Loans to borrowers with subprime credit scores as low as 550 were among categories that grew the most.
The shift comes just as new car sales are picking up momentum. While the official tally for U.S. automobile sales in 2010 won't be out until this afternoon, analysts say full-year deliveries probably rebounded to about 11.5 million vehicles from 10.4 million in 2009, bolstering industry confidence in consumers' willingness to buy despite economic uncertainties.
"Right now, what we're seeing is growth in auto lending across the board," said Jeremy Anwyl, CEO of the auto research Web site, Edmunds.com. "There is a lot of money sitting out there and very few ways for investors to put it to work. What those investors are realizing is that there is money to be made in subprime auto lending."
For Middle Tennessee car dealers, the easier credit has helped boost sales.
Credit restrictions were the biggest reason people stopped buying new cars during the recession, but "that's not a problem anymore," said Marty Horn, sales manager at Nashville's Crown Ford.
"We're not having any trouble finding financing for anyone with a score in the 600s," he said. "We can get most people financed through Ford Credit, and if that's not available, we have other lenders ready to step in."
Terms are getting back to normal, as well as loan-to-value ratios, basically how much money a lender will advance on a vehicle compared with its book value.
"We're seeing loans of up to 140 percent of value from some lenders, and Capital One is by far our best lender for the subprime customer, which is below a 620 score," said Michael Creque, general manager of Alexander Chevrolet-Cadillac in Murfreesboro.
(2 of 2)
GM eases standards
General Motors' dealers are making use of Ally Financial, the now independent lender that used to be GMAC, as well as GM Financial, the new GM-owned subprime lender formerly known as AmeriCredit. GM bought that company in July to provide its dealers with more lending options for non-prime customers.
"Ally will take anything from 620 up, but we even got a customer with a 587 score approved last month with Ally," Creque said.
Two factors are helping rebuild confidence in non-prime and subprime lending among investors: higher used-car values, which help lower the risk if a vehicle has to be repossessed; and lower default rates among borrowers, the dealers and credit experts said.
Auto-loan delinquencies dropped significantly during the third quarter, Experian said, with 30-day defaults down 8.4 percent from the same quarter in 2009, and 60-day late payments down 17.4 percent.
In addition, the total amount of auto loans considered at risk for default dropped by $6.4 billion during the quarter.
"With delinquencies down and less money in their portfolios 'at risk,' lenders can be a little less conservative in their lending strategies," said Melinda Zabritski, director of automotive credit for Experian.
Buyers start to return
Buyers are coming back, and they're starting to realize that credit "isn't anywhere near as tight as it was 18 months ago," said Ben Freeland, president of the Freeland Chevrolet Superstore at Hickory Hollow. "It's not crazy like it was at the peak, but we can get financing for people with scores anywhere in the 600s, and can even go into the upper 500s with the right conditions — decent employment and a good down-payment."
Freeland said lenders haven't thrown the spigots too wide open, though, and he doesn't see a risk of delinquencies spiking higher.
"They are doing more due diligence than they did before, looking for more documentation, such as pay stubs," he said.
The loosening of auto-lending standards remains a "sort of slow, tentative, step-by-step improvement," Edmunds.com's Anwyl said.
Lenders are looking more closely at debt-to-income ratios, and car payments generally must be where lenders feel comfortable — at no more than 20 percent of an applicant's income.
Auto lenders approve more subprime borrowers
By G. Chambers Williams III • THE TENNESSEAN • January 4, 2011
Tweet
Comments (9) Recommend Print this page E-mail this article Share
Del.icio.us Facebook Digg Reddit Newsvine Buzz up!
Twitter FarkIt Type Size A A A Next Page1| 2Previous PageAs the auto industry continues to make a slow recovery from tough times of the past two years, lenders are finally loosening credit restrictions and approving car loans for customers with less than prime credit ratings.
In the third quarter last year, for instance, the share of new vehicle loans to "credit-challenged" consumers rose 12.7 percent compared with the same period in 2009, said Experian, one of the nation's major credit reporting agencies.
Loans to borrowers with subprime credit scores as low as 550 were among categories that grew the most.
The shift comes just as new car sales are picking up momentum. While the official tally for U.S. automobile sales in 2010 won't be out until this afternoon, analysts say full-year deliveries probably rebounded to about 11.5 million vehicles from 10.4 million in 2009, bolstering industry confidence in consumers' willingness to buy despite economic uncertainties.
"Right now, what we're seeing is growth in auto lending across the board," said Jeremy Anwyl, CEO of the auto research Web site, Edmunds.com. "There is a lot of money sitting out there and very few ways for investors to put it to work. What those investors are realizing is that there is money to be made in subprime auto lending."
For Middle Tennessee car dealers, the easier credit has helped boost sales.
Credit restrictions were the biggest reason people stopped buying new cars during the recession, but "that's not a problem anymore," said Marty Horn, sales manager at Nashville's Crown Ford.
"We're not having any trouble finding financing for anyone with a score in the 600s," he said. "We can get most people financed through Ford Credit, and if that's not available, we have other lenders ready to step in."
Terms are getting back to normal, as well as loan-to-value ratios, basically how much money a lender will advance on a vehicle compared with its book value.
"We're seeing loans of up to 140 percent of value from some lenders, and Capital One is by far our best lender for the subprime customer, which is below a 620 score," said Michael Creque, general manager of Alexander Chevrolet-Cadillac in Murfreesboro.
Next Page1| 2Previous PageAs the auto industry continues to make a slow recovery from tough times of the past two years, lenders are finally loosening credit restrictions and approving car loans for customers with less than prime credit ratings.
In the third quarter last year, for instance, the share of new vehicle loans to "credit-challenged" consumers rose 12.7 percent compared with the same period in 2009, said Experian, one of the nation's major credit reporting agencies.
Loans to borrowers with subprime credit scores as low as 550 were among categories that grew the most.
The shift comes just as new car sales are picking up momentum. While the official tally for U.S. automobile sales in 2010 won't be out until this afternoon, analysts say full-year deliveries probably rebounded to about 11.5 million vehicles from 10.4 million in 2009, bolstering industry confidence in consumers' willingness to buy despite economic uncertainties.
"Right now, what we're seeing is growth in auto lending across the board," said Jeremy Anwyl, CEO of the auto research Web site, Edmunds.com. "There is a lot of money sitting out there and very few ways for investors to put it to work. What those investors are realizing is that there is money to be made in subprime auto lending."
For Middle Tennessee car dealers, the easier credit has helped boost sales.
Credit restrictions were the biggest reason people stopped buying new cars during the recession, but "that's not a problem anymore," said Marty Horn, sales manager at Nashville's Crown Ford.
"We're not having any trouble finding financing for anyone with a score in the 600s," he said. "We can get most people financed through Ford Credit, and if that's not available, we have other lenders ready to step in."
Terms are getting back to normal, as well as loan-to-value ratios, basically how much money a lender will advance on a vehicle compared with its book value.
"We're seeing loans of up to 140 percent of value from some lenders, and Capital One is by far our best lender for the subprime customer, which is below a 620 score," said Michael Creque, general manager of Alexander Chevrolet-Cadillac in Murfreesboro.
(2 of 2)
GM eases standards
General Motors' dealers are making use of Ally Financial, the now independent lender that used to be GMAC, as well as GM Financial, the new GM-owned subprime lender formerly known as AmeriCredit. GM bought that company in July to provide its dealers with more lending options for non-prime customers.
"Ally will take anything from 620 up, but we even got a customer with a 587 score approved last month with Ally," Creque said.
Two factors are helping rebuild confidence in non-prime and subprime lending among investors: higher used-car values, which help lower the risk if a vehicle has to be repossessed; and lower default rates among borrowers, the dealers and credit experts said.
Auto-loan delinquencies dropped significantly during the third quarter, Experian said, with 30-day defaults down 8.4 percent from the same quarter in 2009, and 60-day late payments down 17.4 percent.
In addition, the total amount of auto loans considered at risk for default dropped by $6.4 billion during the quarter.
"With delinquencies down and less money in their portfolios 'at risk,' lenders can be a little less conservative in their lending strategies," said Melinda Zabritski, director of automotive credit for Experian.
Buyers start to return
Buyers are coming back, and they're starting to realize that credit "isn't anywhere near as tight as it was 18 months ago," said Ben Freeland, president of the Freeland Chevrolet Superstore at Hickory Hollow. "It's not crazy like it was at the peak, but we can get financing for people with scores anywhere in the 600s, and can even go into the upper 500s with the right conditions — decent employment and a good down-payment."
Freeland said lenders haven't thrown the spigots too wide open, though, and he doesn't see a risk of delinquencies spiking higher.
"They are doing more due diligence than they did before, looking for more documentation, such as pay stubs," he said.
The loosening of auto-lending standards remains a "sort of slow, tentative, step-by-step improvement," Edmunds.com's Anwyl said.
Lenders are looking more closely at debt-to-income ratios, and car payments generally must be where lenders feel comfortable — at no more than 20 percent of an applicant's income.
Saturday, December 25, 2010
http://www.repofinder.com
http://www.repofinder.com/
SOUTHERN NEVADA ECONOMY: Businesses adapt to survive
Recession forces some to rethink their approach
By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL
Debra Solt, director of work force development for Vegas PBS, left, poses with Ronna Timpa in the lobby of the Vegas PBS building. Timpa has worked with Vegas PBS to take her English as a Second Language training program to the Internet.
CRAIG L. MORAN/LAS VEGAS REVIEW-JOURNAL
Nevada's recession has proven tough on just about everybody.
From workers who have seen their pay slashed to businesses that have lost half or more of their sales, few people -- save bankruptcy attorneys and repo men -- have seen their fortunes improve in the past three years.
But not everyone has folded under the pressure.
Legions of local professionals adapted to the slump, accepting a reality that has pushed them into new lines of business.
Here, we share three stories of survival, each offering their own lessons on flexibility in the face of hard times.
a remodeled business plan
For nearly three decades, building luxury houses provided great business for Christopher Homes.
The Las Vegas company built more than 1,600 local homes from 1981 to 2008, specializing in high-end properties on golf courses and in upscale master plans.
Then the recession arrived, and as for the city's housing market, well, you know the rest.
"About a year ago, we really analyzed the market and tried to come up with our best estimate of what the market would look like over the next few years," said Chris Stuhmer, Christopher's owner and chief executive officer. "We saw that the amount of business in the future, and the market complexities that are contributing to lower real estate values, were going to create a very difficult environment for us to create and produce houses on a profitable basis."
So Christopher turned from building new homes to remodeling existing ones. Today, home remodels comprise roughly 90 percent of the business Christopher conducts. That's a major change for a company that made 100 percent of its sales on new homes before the recession.
It's not just the revenue source that's changed. Clients have completely different expectations when remodeling.
"In a successful remodeling job, it's much more about the experience than the finished product," Stuhmer said. "We have focused a lot of our attention on managing that experience. We inconvenience homeowners as little as possible."
Since it officially launched its remodeling business in March, Christopher has remodeled kitchens, added bedrooms and built second floors onto single-story homes. Contracts are averaging about $90,000 in cost, though Christopher has handled renovations ranging from $20,000 to $800,000. The company should have 50 to 60 jobs in its renovation portfolio by March; about 25 percent of its business comes from homeowners who live in houses built by Christopher.
The new direction has helped the company stay in business, but Christopher's annual sales remain roughly 80 percent below where they were before the recession, Stuhmer estimated. It's also down to 16 or 17 employees, compared with more than 100 workers at its peak. But Stuhmer said he holds out hope for the long-term future, saying there's a good chance the company could get back to building the 100 or so homes a year it developed before the downturn.
"The market isn't going to stay the way it is now forever," Stuhmer said. "The question is how long it takes to come back. We'll need significant improvement in the local and national economies, as well as some job growth, before any material changes happen in our local market."
driving growth in a recession
Dale Amos bought local payday-lending outfit Star Loan Centers in December 2007, just as the nation's recession was getting started.
It might seem like a fortuitous investment, given the greater need for cash advances that typically comes with a slumping economy. But like practically any business in Southern Nevada's especially deep downturn, Star Loan Centers needed a boost along about late 2008.
That's because collecting on payday loans became particularly difficult in the recession. If a borrower skips out on his obligation, a lender can get a court order to garnish the borrower's wages, but that's possible only if the consumer has a job -- an increasingly scarce proposition in a state that leads the nation in unemployment.
Plus, the legal wrangling can take months or years. The business must take the borrower to small-claims court and win a decision. That can take six months or more; Star's portfolio contains cases that are well over two years old.
With auto titles, on the other hand, there's no court action required to collect on a loan, and when someone does default, the repossession process can conclude in as little as a week.
So Amos, Star Loan's owner and president, decided in November 2008 to add car-title loans to the company's services.
"I just happened to be a car guy. I knew about cars," Amos said of the business decision. "I looked at our loss ratio on payday loans, and I looked at the drawn-out collection extravaganza. For the most part, people are not going to lose their vehicles. If they go on unemployment, we'll work out a payment arrangement. People do what they can to avoid losing their cars."
Today, car-title loans make up 70 percent of Star Loan Centers' portfolio. That success on the auto side has enabled the company to be more selective about the payday loans it makes, Amos said.
"There's just a huge demand of people needing money. We over-scrutinize now," he said. "We can pick and choose our business at this point."
Title loans have also allowed Star Loan Centers to grow in the downturn. The company's portfolio has expanded 300 percent since March, Amos said, and it's negotiating a lease on a second location to complement its original outpost on Sahara Avenue.
On top of that potential second office, Star Loan isn't done evolving. Amos said he's in talks with possible partners to open a sales lot to turn around cars his company has repossessed. He'd offer on-site financing as well.
"We'll be able to handle both sides of the business," he said.
bringing training back
You'd think speaking the language of your company's customers is a necessity.
The recession has taught Ronna Timpa otherwise.
Timpa is founder and president of Workplace ESL Solutions, an 18-year-old Las Vegas business that teaches basic English and Spanish to workers in sectors ranging from government to hospitality. In the depths of the recession, many companies slashed their training budgets after determining that it was a luxury to teach employees English as a second language at the workplace.
"They told me, 'If we're laying off workers, we can't have ESL training," she said.
So Timpa watched as the downturn stole roughly 50 percent of her annual sales.
Her business-saving epiphany came at a May trade show. As she addressed a crowd at a New Mexico convention of the National Association of Workforce Development Professionals, an attendee from Florida jumped up and down in the back of the room, telling her that his work force-investment board needed her educational program, but couldn't afford it on-site. Instead, he could put her materials on the Internet for her, and she could train online at a much lower cost.
"I'd had offers for years to put everything online, so I was like, 'Yeah, yeah, yeah,' " Timpa recalled. "The next thing I knew, he sent me a sample chapter."
The draft helped Timpa see the possibilities. She could customize online training for any business, and she could even reach displaced workers.
"Now, we can reach international customers who've been contacting me for years, and we can make them their own curriculum in a heartbeat. We could reach thousands of people at a fraction of the cost," she said.
Timpa has teamed up with Vegas PBS, which has a work force-training division, to develop her classes. She's transforming her textbook, "Hotel English," into an online version, and Vegas PBS will provide closed-circuit video capabilities for instructors to help guide students through the Internet material. Once the final product rolls out in the spring, a hotel operator will be able to stream interactive-video lessons into multiple properties, and combine them with Internet lessons.
But it's consumers who will benefit the most from the new training initiative, Timpa said.
"We can reach so many people with this. Customized training (online) doesn't replace face-to-face learning, but it gets everyone excited about speaking English to their customers," she said. "And the more people you have trained in (English as a second language), the more you'll have people talking with your customers and giving exceptional service."
SOUTHERN NEVADA ECONOMY: Businesses adapt to survive
Recession forces some to rethink their approach
By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL
Debra Solt, director of work force development for Vegas PBS, left, poses with Ronna Timpa in the lobby of the Vegas PBS building. Timpa has worked with Vegas PBS to take her English as a Second Language training program to the Internet.
CRAIG L. MORAN/LAS VEGAS REVIEW-JOURNAL
Nevada's recession has proven tough on just about everybody.
From workers who have seen their pay slashed to businesses that have lost half or more of their sales, few people -- save bankruptcy attorneys and repo men -- have seen their fortunes improve in the past three years.
But not everyone has folded under the pressure.
Legions of local professionals adapted to the slump, accepting a reality that has pushed them into new lines of business.
Here, we share three stories of survival, each offering their own lessons on flexibility in the face of hard times.
a remodeled business plan
For nearly three decades, building luxury houses provided great business for Christopher Homes.
The Las Vegas company built more than 1,600 local homes from 1981 to 2008, specializing in high-end properties on golf courses and in upscale master plans.
Then the recession arrived, and as for the city's housing market, well, you know the rest.
"About a year ago, we really analyzed the market and tried to come up with our best estimate of what the market would look like over the next few years," said Chris Stuhmer, Christopher's owner and chief executive officer. "We saw that the amount of business in the future, and the market complexities that are contributing to lower real estate values, were going to create a very difficult environment for us to create and produce houses on a profitable basis."
So Christopher turned from building new homes to remodeling existing ones. Today, home remodels comprise roughly 90 percent of the business Christopher conducts. That's a major change for a company that made 100 percent of its sales on new homes before the recession.
It's not just the revenue source that's changed. Clients have completely different expectations when remodeling.
"In a successful remodeling job, it's much more about the experience than the finished product," Stuhmer said. "We have focused a lot of our attention on managing that experience. We inconvenience homeowners as little as possible."
Since it officially launched its remodeling business in March, Christopher has remodeled kitchens, added bedrooms and built second floors onto single-story homes. Contracts are averaging about $90,000 in cost, though Christopher has handled renovations ranging from $20,000 to $800,000. The company should have 50 to 60 jobs in its renovation portfolio by March; about 25 percent of its business comes from homeowners who live in houses built by Christopher.
The new direction has helped the company stay in business, but Christopher's annual sales remain roughly 80 percent below where they were before the recession, Stuhmer estimated. It's also down to 16 or 17 employees, compared with more than 100 workers at its peak. But Stuhmer said he holds out hope for the long-term future, saying there's a good chance the company could get back to building the 100 or so homes a year it developed before the downturn.
"The market isn't going to stay the way it is now forever," Stuhmer said. "The question is how long it takes to come back. We'll need significant improvement in the local and national economies, as well as some job growth, before any material changes happen in our local market."
driving growth in a recession
Dale Amos bought local payday-lending outfit Star Loan Centers in December 2007, just as the nation's recession was getting started.
It might seem like a fortuitous investment, given the greater need for cash advances that typically comes with a slumping economy. But like practically any business in Southern Nevada's especially deep downturn, Star Loan Centers needed a boost along about late 2008.
That's because collecting on payday loans became particularly difficult in the recession. If a borrower skips out on his obligation, a lender can get a court order to garnish the borrower's wages, but that's possible only if the consumer has a job -- an increasingly scarce proposition in a state that leads the nation in unemployment.
Plus, the legal wrangling can take months or years. The business must take the borrower to small-claims court and win a decision. That can take six months or more; Star's portfolio contains cases that are well over two years old.
With auto titles, on the other hand, there's no court action required to collect on a loan, and when someone does default, the repossession process can conclude in as little as a week.
So Amos, Star Loan's owner and president, decided in November 2008 to add car-title loans to the company's services.
"I just happened to be a car guy. I knew about cars," Amos said of the business decision. "I looked at our loss ratio on payday loans, and I looked at the drawn-out collection extravaganza. For the most part, people are not going to lose their vehicles. If they go on unemployment, we'll work out a payment arrangement. People do what they can to avoid losing their cars."
Today, car-title loans make up 70 percent of Star Loan Centers' portfolio. That success on the auto side has enabled the company to be more selective about the payday loans it makes, Amos said.
"There's just a huge demand of people needing money. We over-scrutinize now," he said. "We can pick and choose our business at this point."
Title loans have also allowed Star Loan Centers to grow in the downturn. The company's portfolio has expanded 300 percent since March, Amos said, and it's negotiating a lease on a second location to complement its original outpost on Sahara Avenue.
On top of that potential second office, Star Loan isn't done evolving. Amos said he's in talks with possible partners to open a sales lot to turn around cars his company has repossessed. He'd offer on-site financing as well.
"We'll be able to handle both sides of the business," he said.
bringing training back
You'd think speaking the language of your company's customers is a necessity.
The recession has taught Ronna Timpa otherwise.
Timpa is founder and president of Workplace ESL Solutions, an 18-year-old Las Vegas business that teaches basic English and Spanish to workers in sectors ranging from government to hospitality. In the depths of the recession, many companies slashed their training budgets after determining that it was a luxury to teach employees English as a second language at the workplace.
"They told me, 'If we're laying off workers, we can't have ESL training," she said.
So Timpa watched as the downturn stole roughly 50 percent of her annual sales.
Her business-saving epiphany came at a May trade show. As she addressed a crowd at a New Mexico convention of the National Association of Workforce Development Professionals, an attendee from Florida jumped up and down in the back of the room, telling her that his work force-investment board needed her educational program, but couldn't afford it on-site. Instead, he could put her materials on the Internet for her, and she could train online at a much lower cost.
"I'd had offers for years to put everything online, so I was like, 'Yeah, yeah, yeah,' " Timpa recalled. "The next thing I knew, he sent me a sample chapter."
The draft helped Timpa see the possibilities. She could customize online training for any business, and she could even reach displaced workers.
"Now, we can reach international customers who've been contacting me for years, and we can make them their own curriculum in a heartbeat. We could reach thousands of people at a fraction of the cost," she said.
Timpa has teamed up with Vegas PBS, which has a work force-training division, to develop her classes. She's transforming her textbook, "Hotel English," into an online version, and Vegas PBS will provide closed-circuit video capabilities for instructors to help guide students through the Internet material. Once the final product rolls out in the spring, a hotel operator will be able to stream interactive-video lessons into multiple properties, and combine them with Internet lessons.
But it's consumers who will benefit the most from the new training initiative, Timpa said.
"We can reach so many people with this. Customized training (online) doesn't replace face-to-face learning, but it gets everyone excited about speaking English to their customers," she said. "And the more people you have trained in (English as a second language), the more you'll have people talking with your customers and giving exceptional service."
Monday, December 20, 2010
http://www.globe-democrat.com/news/2010/dec/20/bbb-study-shows-some-used-car-dealers-taking-advan/
Bbb Study Shows Some Used Car Dealers Taking Advantage Of Buyers
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Monday, December 20, 2010
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CloseComment.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 in the region. 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.”
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 that consumers in the market for a used car should:
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://cms-admin.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.
.
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Monday, December 20, 2010
Share this item Send this to a friend
Grab the link Copy and paste the link:
Blog about it Blog about this page.
CloseComment.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 in the region. 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.”
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 that consumers in the market for a used car should:
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://cms-admin.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.
.
Wednesday, December 15, 2010
http://www.wnep.com/news/countybycounty/wnep-lacka-scr-theft-kevin-prasi,0,7771735.story
Man Charged With Stealing Thousands From Employer
A man in Lackawanna County is accused of ripping off more than $300,000 from his employer.
Investigators said he did this to feed his gambling problem.
Kevin Prasi, 28, of Clark's Summit handled the finances at Vullo motors in Scranton. Prasi told investigators, he had a serious gambling addiction.
Investigators said he stole more than $300,000 from his former employer.
Prasi worked at Vullo motors in Scranton, as the finance manager.
Investigators said he stole the money by selling vehicles and not reporting the sales to the dealership. He pocketed nearly $80,000 doing that.
Prasi would also take out fake loans, and keep that money for himself, which was another $80,000.
"On cars that were sold from Vullo motors, that were repossessed, he would then resell them, and then not use the proceeds to pay the loan off, he would keep that money for himself," said District Attorney Jennifer McCambridge of Lackawanna County.
Investigators said Prasi did this for almost a year, until Vullo owners confronted him about it.
In court papers Prasi admitted to stealing the money and said it was his gambling illness that led him to do it.
He even worked out a deal to try to pay all the money back.
He began paying $300 a week until last month. He stopped because he didn't have a job, and he said he couldn't afford the payments. To date, Prasi has only paid back about $5,000.
Owners said Prasi worked for them for several years, they treated him like family, and this is all too disappointing.
"You never want to think that this could happen to a business, surely in this economy it's affected their bottom line, and ultimately I think that's what led them to the discovery is the numbers just weren't adding up," said District Attorney McCambridge.
Prasi is charged with seven counts of theft, and seven counts of receiving stolen property.
He is out on bail.
A man in Lackawanna County is accused of ripping off more than $300,000 from his employer.
Investigators said he did this to feed his gambling problem.
Kevin Prasi, 28, of Clark's Summit handled the finances at Vullo motors in Scranton. Prasi told investigators, he had a serious gambling addiction.
Investigators said he stole more than $300,000 from his former employer.
Prasi worked at Vullo motors in Scranton, as the finance manager.
Investigators said he stole the money by selling vehicles and not reporting the sales to the dealership. He pocketed nearly $80,000 doing that.
Prasi would also take out fake loans, and keep that money for himself, which was another $80,000.
"On cars that were sold from Vullo motors, that were repossessed, he would then resell them, and then not use the proceeds to pay the loan off, he would keep that money for himself," said District Attorney Jennifer McCambridge of Lackawanna County.
Investigators said Prasi did this for almost a year, until Vullo owners confronted him about it.
In court papers Prasi admitted to stealing the money and said it was his gambling illness that led him to do it.
He even worked out a deal to try to pay all the money back.
He began paying $300 a week until last month. He stopped because he didn't have a job, and he said he couldn't afford the payments. To date, Prasi has only paid back about $5,000.
Owners said Prasi worked for them for several years, they treated him like family, and this is all too disappointing.
"You never want to think that this could happen to a business, surely in this economy it's affected their bottom line, and ultimately I think that's what led them to the discovery is the numbers just weren't adding up," said District Attorney McCambridge.
Prasi is charged with seven counts of theft, and seven counts of receiving stolen property.
He is out on bail.
Monday, December 13, 2010
http://www.wanganuichronicle.co.nz/local/news/car-buyers-loss-proves-harsh-lesson/3933775/
Car buyer's loss proves harsh lesson
John Maslin |
Share Tweet A Wanganui man has a salutary lesson for anyone considering buying a car privately - buyer beware.
Robert Scott was stung when the car he had bought was repossessed because the previous owner failed to meet their financial obligations on loans secured against the vehicle.
Mr Scott had seen a car on Trade Me that he thought was ideal for his family and especially his daughter, and when it did not sell through the site, he made an offer.
He had the car checked out mechanically but overlooked checking the financial background. Nine months later the Hyundai Accent was repossessed, even though the previous owner assured him it was "freehold".
Mr Scott acknowledged he did not do a financial check and admits that was his mistake.
"I took the seller at face value," he said.
"What disappointed me was the fact we had no prior warning from the finance company to say there was an issue with outstanding money owed on the car. Suddenly this guy from the debt collectors turns up on our doorstep, repossessing the car," he said.
"If the finance company had called us, we could have worked something out. We certainly knew where the seller was living at the time."
Mr Scott had paid about $2000 for the car and when the matter of the debt arose, the seller agreed that he would pay the money back.
"We got about $300 from him and that was all.
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By that time he'd left the area and headed north."
That left the Mr Scott $1700 out of pocket. The finance company then sold the repossessed vehicle through the auction process. Mr Scott has since bought another second-hand car off a private seller, but as well as getting the mechanical check he made sure to get a finance check on the vehicle.
There was money owing on that car as well, but he struck a deal with the finance company to pay the outstanding amount to secure possession.
Mr Scott said buyers needed to be aware that buying off unlicensed people was "fraught with difficulty".
"The thing is, there are systems in place to get this stuff thoroughly checked out but sometimes we are just too lazy," Mr Scott said.
MotorWeb is one of the country's leading vehicle history check providers and marketing manager Conrad Heaven said the company had found second-hand car buyers still focused on mechanical checks, unaware of the other risks.
Mr Heaven said those risks included repossession or the vehicle having a substantially lesser value than the purchase price due to previous damage.
MotorWeb's vehicle information report (VIR) provided private car buyers, car dealers, finance companies, and the insurance industry with access to information on vehicles registered in New Zealand.
Between August and October this year the company carried out 268 VIRs in the Wanganui region. Of those, 51 still had money owing on them and 14 had inconsistent odometer readings.
Mr Heaven said MotorWeb encouraged second-hand car buyers to be more vigilant and conduct a detailed check before any money changed hands.
He said there were more than 500,000 cars in the country having money owing and 38,000 cars were sold privately every month. MotorWeb usually carried out more than 150,000 transactions a month for registered motor vehicle traders, finance and insurance companies and private buyers.
The information for the VIRs came from Government and private sector organisations, including the New Zealand Transport Agency and police.
John Maslin |
Share Tweet A Wanganui man has a salutary lesson for anyone considering buying a car privately - buyer beware.
Robert Scott was stung when the car he had bought was repossessed because the previous owner failed to meet their financial obligations on loans secured against the vehicle.
Mr Scott had seen a car on Trade Me that he thought was ideal for his family and especially his daughter, and when it did not sell through the site, he made an offer.
He had the car checked out mechanically but overlooked checking the financial background. Nine months later the Hyundai Accent was repossessed, even though the previous owner assured him it was "freehold".
Mr Scott acknowledged he did not do a financial check and admits that was his mistake.
"I took the seller at face value," he said.
"What disappointed me was the fact we had no prior warning from the finance company to say there was an issue with outstanding money owed on the car. Suddenly this guy from the debt collectors turns up on our doorstep, repossessing the car," he said.
"If the finance company had called us, we could have worked something out. We certainly knew where the seller was living at the time."
Mr Scott had paid about $2000 for the car and when the matter of the debt arose, the seller agreed that he would pay the money back.
"We got about $300 from him and that was all.
Advertisement
By that time he'd left the area and headed north."
That left the Mr Scott $1700 out of pocket. The finance company then sold the repossessed vehicle through the auction process. Mr Scott has since bought another second-hand car off a private seller, but as well as getting the mechanical check he made sure to get a finance check on the vehicle.
There was money owing on that car as well, but he struck a deal with the finance company to pay the outstanding amount to secure possession.
Mr Scott said buyers needed to be aware that buying off unlicensed people was "fraught with difficulty".
"The thing is, there are systems in place to get this stuff thoroughly checked out but sometimes we are just too lazy," Mr Scott said.
MotorWeb is one of the country's leading vehicle history check providers and marketing manager Conrad Heaven said the company had found second-hand car buyers still focused on mechanical checks, unaware of the other risks.
Mr Heaven said those risks included repossession or the vehicle having a substantially lesser value than the purchase price due to previous damage.
MotorWeb's vehicle information report (VIR) provided private car buyers, car dealers, finance companies, and the insurance industry with access to information on vehicles registered in New Zealand.
Between August and October this year the company carried out 268 VIRs in the Wanganui region. Of those, 51 still had money owing on them and 14 had inconsistent odometer readings.
Mr Heaven said MotorWeb encouraged second-hand car buyers to be more vigilant and conduct a detailed check before any money changed hands.
He said there were more than 500,000 cars in the country having money owing and 38,000 cars were sold privately every month. MotorWeb usually carried out more than 150,000 transactions a month for registered motor vehicle traders, finance and insurance companies and private buyers.
The information for the VIRs came from Government and private sector organisations, including the New Zealand Transport Agency and police.
Wednesday, December 8, 2010
http://www.thenational.ae/news/uae-news/the-winning-bid-takes-the-wheels-in-dubai
..The winning bid takes the wheels in Dubai
Martin Croucher
Last Updated: Dec 9, 2010
It's a buyer's market: vehicles of all makes and models are on display in the Dubai Municipality's used-car showroom every week
All photos by Ana Bianca Marin
Dana Shaheen, 21, an American, looks at what might be her first car.
A Ford Mustang attracts a number of would-be muscle-car drivers.
On location: Auto Market, Ras al Khor, Dubai.
Once coveted and necessary, the vehicles became such a burden their owners abandoned them to gather dust on the street.
Once a week, however, they become objects of desire once again. At an automobile auction on the outskirts of Dubai, their suitors range from owners of small business owners and average motorists to total petrolheads, all looking for the best deal in town.
Among those at last week's event was Abdullah Bavazeer, an engineer from India who had his heart set on a Peugeot 407 that had been on the auction website for several weeks. When it came up for bids, he was prepared.
"You have to think quickly and you have to know when to stop," he said. "I decided on a price of Dh25,000 and I didn't want to go higher than that."
Mr Bavazeer's quest ended with his winning the bidding at Dh23,000, at the low end of the auction's price spectrum of between Dh20,000 and Dh160,000.
The majority of vehicles in the auction were being sold on behalf of banks because their former owners were unable or unwilling to keep up their loan payments. The vehicles were then repossessed and sold to recoup some of their value.
Some 120 cars are sold every Wednesday at the auto market in Ras al Khor by Golden Bell Auction, which was established in Dubai 10 years ago. Amir Dagash, the company's 48-year-old director, is the auctioneer.
Speaking in a rapid-fire hybrid of Arabic and English, he sounds like an old-fashioned scat singer as he calls the bids.
"Its not just a job, it's a performance," said Mr Dagash, who is from Sudan. "Half of my work is to entertain people. If they are bored they won't sit there for three or four hours."
Mr Dagash has travelled as far afield as London, Los Angeles and Seoul to learn his trade.
He is the third generation of auctioneers in his family and counts his father as his greatest business inspiration. Yet as a father of seven himself, he would not want any of his sons to make a living pounding the gavel.
"It's just too stressful," he said. "I just want to make sure they have the highest qualifications, and then they can make their own decisions."
The auction, which takes place in the Dubai Municipality's used-car showroom complex, is split into two locations: the indoor auction hall and a yard in which the majority of the cars are parked. Inside the auction theatre is a window onto a lighted ramp, up which the cars are driven when their lots are drawn.
The set-up is almost like "catwalk modelling for cars", said Khurram Rizvi, an auditor from India who came looking for a car for personal use. He was not impressed by what was on offer at the auction.
"The prices are about normal market rates and the quality isn't that good," Mr Rizvi said. "You can't take the car for a test drive either."
Still, each car receives a full inspection and their technical faults are listed in detail on the windscreen. The problems ranged from faulty windscreen wipers and dead batteries to bad brakes and body damage.
Still, every vehicle in last week's auction drew at least one bid despite its deficiencies.
Down the road, Mr Bavazeer said he would consider selling a car in the auction because of the event's popularity.
"There are so many cars and so many buyers here," he said. "If you want to sell a car there's a guarantee that it will be sold, by hook or by crook."
Martin Croucher
Last Updated: Dec 9, 2010
It's a buyer's market: vehicles of all makes and models are on display in the Dubai Municipality's used-car showroom every week
All photos by Ana Bianca Marin
Dana Shaheen, 21, an American, looks at what might be her first car.
A Ford Mustang attracts a number of would-be muscle-car drivers.
On location: Auto Market, Ras al Khor, Dubai.
Once coveted and necessary, the vehicles became such a burden their owners abandoned them to gather dust on the street.
Once a week, however, they become objects of desire once again. At an automobile auction on the outskirts of Dubai, their suitors range from owners of small business owners and average motorists to total petrolheads, all looking for the best deal in town.
Among those at last week's event was Abdullah Bavazeer, an engineer from India who had his heart set on a Peugeot 407 that had been on the auction website for several weeks. When it came up for bids, he was prepared.
"You have to think quickly and you have to know when to stop," he said. "I decided on a price of Dh25,000 and I didn't want to go higher than that."
Mr Bavazeer's quest ended with his winning the bidding at Dh23,000, at the low end of the auction's price spectrum of between Dh20,000 and Dh160,000.
The majority of vehicles in the auction were being sold on behalf of banks because their former owners were unable or unwilling to keep up their loan payments. The vehicles were then repossessed and sold to recoup some of their value.
Some 120 cars are sold every Wednesday at the auto market in Ras al Khor by Golden Bell Auction, which was established in Dubai 10 years ago. Amir Dagash, the company's 48-year-old director, is the auctioneer.
Speaking in a rapid-fire hybrid of Arabic and English, he sounds like an old-fashioned scat singer as he calls the bids.
"Its not just a job, it's a performance," said Mr Dagash, who is from Sudan. "Half of my work is to entertain people. If they are bored they won't sit there for three or four hours."
Mr Dagash has travelled as far afield as London, Los Angeles and Seoul to learn his trade.
He is the third generation of auctioneers in his family and counts his father as his greatest business inspiration. Yet as a father of seven himself, he would not want any of his sons to make a living pounding the gavel.
"It's just too stressful," he said. "I just want to make sure they have the highest qualifications, and then they can make their own decisions."
The auction, which takes place in the Dubai Municipality's used-car showroom complex, is split into two locations: the indoor auction hall and a yard in which the majority of the cars are parked. Inside the auction theatre is a window onto a lighted ramp, up which the cars are driven when their lots are drawn.
The set-up is almost like "catwalk modelling for cars", said Khurram Rizvi, an auditor from India who came looking for a car for personal use. He was not impressed by what was on offer at the auction.
"The prices are about normal market rates and the quality isn't that good," Mr Rizvi said. "You can't take the car for a test drive either."
Still, each car receives a full inspection and their technical faults are listed in detail on the windscreen. The problems ranged from faulty windscreen wipers and dead batteries to bad brakes and body damage.
Still, every vehicle in last week's auction drew at least one bid despite its deficiencies.
Down the road, Mr Bavazeer said he would consider selling a car in the auction because of the event's popularity.
"There are so many cars and so many buyers here," he said. "If you want to sell a car there's a guarantee that it will be sold, by hook or by crook."
Friday, December 3, 2010
http://www.bayofplentytimes.co.nz/local/news/repossessions-spark-car-buying-warning/3932667/
Repossessions spark car buying warning
Julia Proverbs | 4th December 2010
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New Zealanders generally purchase a new second-hand car every three years. Photo / File. Up to a third of cars being sold privately in the Western Bay could have securities lodged against them, statistics provided by vehicle history check provider MotorWeb show.
And with tough economic times, that is likely to increase.
Wayne Smith of Tauranga didn't think twice when he bought a 4x4 off a "friend of a friend" to tow his boat with. But several months later the vehicle, which cost him $3000, was repossessed, when debts by the previous owner were not honoured. "They used the vehicle to get a loan," Mr Smith said. It had cost him $1500 to get it back, which he had eventually managed to recoup. "It took about a year. Luckily it was only a small amount."
Pam Lang, of Apata, has a similar story. Her teenage son, Ethan, was stung when he bought his first car from a man in Hamilton.
Having paid $3600 hard-earned cash for the car, it was taken away just a month later. "We got a phone call from this guy saying, 'Where is the car because we're coming to repossess it'? He turned up a week later and took it away," Mrs Lang said.
After further investigations they had traced the debt back to a previous Auckland owner, but were able to take action only against the man who sold it to them through the Small Claims Tribunal.
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"They ruled in our favour and the guy in Hamilton had to pay us back the money. I felt very sorry for him."
Of the 2850 checks done by MotorWeb on vehicles in the Western Bay between August and October this year, 946 (33 per cent) had securities registered against them, two were stolen and 266 (9 per cent) had inconsistent odometer readings. In 375 cases (13 per cent) there had been a recent ownership change, which could also be an indicator that not all is as it seems.
Managing director Chris Knight said many car buyers focused on a mechanical inspection when they bought a car.
"But if you buy a car without getting a vehicle history check, you run the risk of it being repossessed or being worth far less than you paid for it.
"As New Zealanders generally purchase a new car every three years and with a sharp increase in second-hand car sales over the summer months, we encourage second-hand car buyers to be more vigilant and conduct a detailed check on the vehicle before any money changes hands."
Julia Proverbs | 4th December 2010
Share Tweet
New Zealanders generally purchase a new second-hand car every three years. Photo / File. Up to a third of cars being sold privately in the Western Bay could have securities lodged against them, statistics provided by vehicle history check provider MotorWeb show.
And with tough economic times, that is likely to increase.
Wayne Smith of Tauranga didn't think twice when he bought a 4x4 off a "friend of a friend" to tow his boat with. But several months later the vehicle, which cost him $3000, was repossessed, when debts by the previous owner were not honoured. "They used the vehicle to get a loan," Mr Smith said. It had cost him $1500 to get it back, which he had eventually managed to recoup. "It took about a year. Luckily it was only a small amount."
Pam Lang, of Apata, has a similar story. Her teenage son, Ethan, was stung when he bought his first car from a man in Hamilton.
Having paid $3600 hard-earned cash for the car, it was taken away just a month later. "We got a phone call from this guy saying, 'Where is the car because we're coming to repossess it'? He turned up a week later and took it away," Mrs Lang said.
After further investigations they had traced the debt back to a previous Auckland owner, but were able to take action only against the man who sold it to them through the Small Claims Tribunal.
Advertisement
"They ruled in our favour and the guy in Hamilton had to pay us back the money. I felt very sorry for him."
Of the 2850 checks done by MotorWeb on vehicles in the Western Bay between August and October this year, 946 (33 per cent) had securities registered against them, two were stolen and 266 (9 per cent) had inconsistent odometer readings. In 375 cases (13 per cent) there had been a recent ownership change, which could also be an indicator that not all is as it seems.
Managing director Chris Knight said many car buyers focused on a mechanical inspection when they bought a car.
"But if you buy a car without getting a vehicle history check, you run the risk of it being repossessed or being worth far less than you paid for it.
"As New Zealanders generally purchase a new car every three years and with a sharp increase in second-hand car sales over the summer months, we encourage second-hand car buyers to be more vigilant and conduct a detailed check on the vehicle before any money changes hands."
Thursday, December 2, 2010
http://www.herald.ie/national-news/city-news/nows-your-chance-to-get-a-bargain-luxury-sports-car-2445235.html
Now's your chance to get a bargain luxury sports car
CLEAROUT: Once-wealthy owners forced to sell at fraction of price
Getty Images
Aston Martin DB9
Also in City News
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Treacherous conditions as more snow falls
Send in your snow pictures
Gran forced to jump from hijacked car
Dublin's Kisses gets award nod for 'Best Foreign Film'
City News Home
Thursday December 02 2010
LUXURY cars like Aston Martins, Land Rovers, and Jaguars are being seized for resale by Dublin's bailiffs -- as their previously wealthy owners have plummeted into crippling debt.
But the high-end cars are being sold for a mere fraction of their original cost as the bailiffs find it difficult to shift them.
Dublin county sheriff John Fitzpatrick told the Herald: "The cars we've been getting are all higher range.
"They're Jaguars, Mercedes, BMWs, but they've dropped enormously in value and they're very hard to sell.
"We sold an Aston Martin last October, just over a year ago.
"When that car was bought new, I understand it was bought for €250,000 but we sold it for €39,000.
"We sold a 2006 BMW diesel 5-series which was automatic and €15,000 was the most we could get for it."
Up to 20 luxury cars have been seized by the county bailiffs in the past three years, and are proving hard to sell.
"It's very hard nowadays to sell a car like an Aston Martin. It [entails] big tax, and it's a big drinker on petrol."
A garage owner purchased the car when it was repossessed by the County Sheriff, but a few months later, he still had not made the sale.
"He had it up on his website for €69,000 and I asked him had he sold it, and he said he hadn't. People don't want them."
"If you take a three-litre Range Rover, the road tax on that alone is €1,400 or €1,500, and if you have a four litre, it's €2,000. People are not going to pay for them."
Mr Fitzpatrick admitted that certain families who experienced great wealth during the Celtic Tiger years are now being forced to hand over their most prized possessions.
"It's dreadful to see the way people are. We're talking about people who ran a business properly and who would pay their debts if they had it, but there isn't any money."
Meanwhile, a spokesperson for the Dublin City sheriff stressed: "We take hardship into account and we really try to help someone who's genuinely in trouble, we gently extract money from them. If there's a reaction of horror and shock we deal with them sympathetically."
hnews@herald.iehttp://www.repofinder.com
CLEAROUT: Once-wealthy owners forced to sell at fraction of price
Getty Images
Aston Martin DB9
Also in City News
Dublin airport shuts runway twice due to snow
Treacherous conditions as more snow falls
Send in your snow pictures
Gran forced to jump from hijacked car
Dublin's Kisses gets award nod for 'Best Foreign Film'
City News Home
Thursday December 02 2010
LUXURY cars like Aston Martins, Land Rovers, and Jaguars are being seized for resale by Dublin's bailiffs -- as their previously wealthy owners have plummeted into crippling debt.
But the high-end cars are being sold for a mere fraction of their original cost as the bailiffs find it difficult to shift them.
Dublin county sheriff John Fitzpatrick told the Herald: "The cars we've been getting are all higher range.
"They're Jaguars, Mercedes, BMWs, but they've dropped enormously in value and they're very hard to sell.
"We sold an Aston Martin last October, just over a year ago.
"When that car was bought new, I understand it was bought for €250,000 but we sold it for €39,000.
"We sold a 2006 BMW diesel 5-series which was automatic and €15,000 was the most we could get for it."
Up to 20 luxury cars have been seized by the county bailiffs in the past three years, and are proving hard to sell.
"It's very hard nowadays to sell a car like an Aston Martin. It [entails] big tax, and it's a big drinker on petrol."
A garage owner purchased the car when it was repossessed by the County Sheriff, but a few months later, he still had not made the sale.
"He had it up on his website for €69,000 and I asked him had he sold it, and he said he hadn't. People don't want them."
"If you take a three-litre Range Rover, the road tax on that alone is €1,400 or €1,500, and if you have a four litre, it's €2,000. People are not going to pay for them."
Mr Fitzpatrick admitted that certain families who experienced great wealth during the Celtic Tiger years are now being forced to hand over their most prized possessions.
"It's dreadful to see the way people are. We're talking about people who ran a business properly and who would pay their debts if they had it, but there isn't any money."
Meanwhile, a spokesperson for the Dublin City sheriff stressed: "We take hardship into account and we really try to help someone who's genuinely in trouble, we gently extract money from them. If there's a reaction of horror and shock we deal with them sympathetically."
hnews@herald.iehttp://www.repofinder.com
Monday, November 29, 2010
http://money.cnn.com/2010/11/29/autos/americas_car_Mart.fortune/
Buy Here, Pay Here: Bottom-feeding for used car buyers in a recession
By Alex Taylor III, senior editor at largeNovember 29, 2010: 12:34 PM ET
FORTUNE -- There is a tiny slice of the car business that targets the least credit-worthy customers and tries to get them into cars they can afford and pay for: "Buy Here, Pay Here" used car dealers. Recently they unexpectedly made the news when it was disclosed that Todd Combs, the man whom Warren Buffett hired to help manage his portfolio, is an investor in one of the industry's biggest players.
The timing is appropriate because if ever a demand existed for Buy Here, Pay Here, or BHPH, it is now. With unemployment high and millions of homes being foreclosed, many people who need transportation find they can't buy any because they have neither cash nor credit. BHPH serves buyers who have few alternatives and are willing to endure steep interest charges -- along with onerous collection tactics if they fall behind.
0Email Print Comment
BHPH has more to do with lending and collecting money than it does with the traditional car business. The vehicle is merely a commodity, the asset used to secure the loan. One writer described a BHPH outlet as "a bank masquerading as a used car lot."
In the usual sales process, the discussion about how the car will be paid for comes after it has been selected. At a BHPH dealership, the process is reversed. The dealer first determines a buyer's credit history and figures how much he can come up with for the down payment and subsequent monthly payments; only then does he locate an appropriate vehicle.
The cost for this kind of credit is steep -- as much as 20% annually -- and the consequences of missing payments can be abrupt. Some services recommend that dealers install tracking devices so that they can locate vehicles whose owners haven't kept up and stop them from moving until payments resume.
Woe be to those who can't keep up. Although some BHPH dealerships will accept payment by phone or online, many require that the buyer physically bring a check or cash to their locations either monthly or bi-weekly. Some dealers are known to repossess vehicles if the payment is more than a day late.
0:00 /2:29Chevy Cruze: GM's small-car play
"Collections is the focus of our business -- selling cars is not," America's Car-Mart CEO Tilman J. Falgout III said in a 2002 interview. That kind of single-minded focus has helped make his company popular with investors, among them Buffett's Combs.
The company would not comment for this story and referred us to its filings with the Securities and Exchange Commission for further information.
America's Car-Mart (CRMT), which is not to be confused with its Bentonville, Ark.-neighbor Wal-Mart (WMT, Fortune 500), operates dealerships in eight states, and calls itself the largest publicly held car retailer focused exclusively on BHPH.
Car-Mart got started in 1981, when the company's first used-car dealership opened in Rogers, Ark. Its strategy from the beginning was to sell to customers with limited or poor credit. It was an immediate success.
The company targeted communities in rural areas with populations between 20,000 and 50,000. It figured that the absence of mass transit made car ownership more critical in those communities, and the small population made those who missed payments easier to track down.
To make things easier on buyers, Car-Mart advertises that it will trade cars for anything of value -- from electronics to household appliances and farm animals -- but mostly it deals with cash.
A snapshot of Car-Mart's 2009 fiscal year gives a glimpse of a highly-profitable business. Before this year's run-up in used car prices, Car-Mart was paying between $3,000 and $6,000 for its cars. The most popular models were between three and 10 years old and with 90,000 to 130,000 miles on the odometer. They carried names from Detroit's graveyard of discontinued models: Pontiacs and Oldsmobiles, Ford Escorts, and Chevrolet Cavaliers.
Customers seemed to like the selection. Car-Mart says the average retail price of the 29,000 cars it sold in fiscal 2009 was a little over $9,000. That year the company posted $18 million in net income on revenue of $299 million. It did even better in fiscal 2010, netting $28 million on revenues of $339 million.
But the cars were only a small part of the business model. "Collecting customer accounts is perhaps the single most important aspect of operating a buy here/pay here used car business and is a focal point for store level and corporate office personnel on a daily basis," the company says. "Substantially all incentive compensation is tied directly or indirectly to collection results."
Car-Mart keeps customers on a rigid schedule. If a payment is one day late, the customer receives a letter. After three days without payment, the customer receives a telephone call from Car-Mart. Vehicles are repossessed after 40 days without payment.
It is not a process geared to people who have a tough time with deadlines. According to the company, credit losses as a percentage of sales has averaged 22%, and a company history posted on http://www.fundinguniverse.com/ puts the estimated repossession rate at approximately 18%. It is a tough business but a thriving one.
Today, CAR-MART has 101 locations in Arkansas, Alabama, Oklahoma, Missouri, Kentucky, Indiana, Tennessee, and Texas with more than 45,000 customers.
One disclosure you won't find in its financial statements is how many of those customers paid for their vehicles with livestock -- and whether the animals can be used for monthly payments as well. Chances are if that turns out to be a viable business in a depressed economy, some canny operator will find a way to take advantage of that too.
By Alex Taylor III, senior editor at largeNovember 29, 2010: 12:34 PM ET
FORTUNE -- There is a tiny slice of the car business that targets the least credit-worthy customers and tries to get them into cars they can afford and pay for: "Buy Here, Pay Here" used car dealers. Recently they unexpectedly made the news when it was disclosed that Todd Combs, the man whom Warren Buffett hired to help manage his portfolio, is an investor in one of the industry's biggest players.
The timing is appropriate because if ever a demand existed for Buy Here, Pay Here, or BHPH, it is now. With unemployment high and millions of homes being foreclosed, many people who need transportation find they can't buy any because they have neither cash nor credit. BHPH serves buyers who have few alternatives and are willing to endure steep interest charges -- along with onerous collection tactics if they fall behind.
0Email Print Comment
BHPH has more to do with lending and collecting money than it does with the traditional car business. The vehicle is merely a commodity, the asset used to secure the loan. One writer described a BHPH outlet as "a bank masquerading as a used car lot."
In the usual sales process, the discussion about how the car will be paid for comes after it has been selected. At a BHPH dealership, the process is reversed. The dealer first determines a buyer's credit history and figures how much he can come up with for the down payment and subsequent monthly payments; only then does he locate an appropriate vehicle.
The cost for this kind of credit is steep -- as much as 20% annually -- and the consequences of missing payments can be abrupt. Some services recommend that dealers install tracking devices so that they can locate vehicles whose owners haven't kept up and stop them from moving until payments resume.
Woe be to those who can't keep up. Although some BHPH dealerships will accept payment by phone or online, many require that the buyer physically bring a check or cash to their locations either monthly or bi-weekly. Some dealers are known to repossess vehicles if the payment is more than a day late.
0:00 /2:29Chevy Cruze: GM's small-car play
"Collections is the focus of our business -- selling cars is not," America's Car-Mart CEO Tilman J. Falgout III said in a 2002 interview. That kind of single-minded focus has helped make his company popular with investors, among them Buffett's Combs.
The company would not comment for this story and referred us to its filings with the Securities and Exchange Commission for further information.
America's Car-Mart (CRMT), which is not to be confused with its Bentonville, Ark.-neighbor Wal-Mart (WMT, Fortune 500), operates dealerships in eight states, and calls itself the largest publicly held car retailer focused exclusively on BHPH.
Car-Mart got started in 1981, when the company's first used-car dealership opened in Rogers, Ark. Its strategy from the beginning was to sell to customers with limited or poor credit. It was an immediate success.
The company targeted communities in rural areas with populations between 20,000 and 50,000. It figured that the absence of mass transit made car ownership more critical in those communities, and the small population made those who missed payments easier to track down.
To make things easier on buyers, Car-Mart advertises that it will trade cars for anything of value -- from electronics to household appliances and farm animals -- but mostly it deals with cash.
A snapshot of Car-Mart's 2009 fiscal year gives a glimpse of a highly-profitable business. Before this year's run-up in used car prices, Car-Mart was paying between $3,000 and $6,000 for its cars. The most popular models were between three and 10 years old and with 90,000 to 130,000 miles on the odometer. They carried names from Detroit's graveyard of discontinued models: Pontiacs and Oldsmobiles, Ford Escorts, and Chevrolet Cavaliers.
Customers seemed to like the selection. Car-Mart says the average retail price of the 29,000 cars it sold in fiscal 2009 was a little over $9,000. That year the company posted $18 million in net income on revenue of $299 million. It did even better in fiscal 2010, netting $28 million on revenues of $339 million.
But the cars were only a small part of the business model. "Collecting customer accounts is perhaps the single most important aspect of operating a buy here/pay here used car business and is a focal point for store level and corporate office personnel on a daily basis," the company says. "Substantially all incentive compensation is tied directly or indirectly to collection results."
Car-Mart keeps customers on a rigid schedule. If a payment is one day late, the customer receives a letter. After three days without payment, the customer receives a telephone call from Car-Mart. Vehicles are repossessed after 40 days without payment.
It is not a process geared to people who have a tough time with deadlines. According to the company, credit losses as a percentage of sales has averaged 22%, and a company history posted on http://www.fundinguniverse.com/ puts the estimated repossession rate at approximately 18%. It is a tough business but a thriving one.
Today, CAR-MART has 101 locations in Arkansas, Alabama, Oklahoma, Missouri, Kentucky, Indiana, Tennessee, and Texas with more than 45,000 customers.
One disclosure you won't find in its financial statements is how many of those customers paid for their vehicles with livestock -- and whether the animals can be used for monthly payments as well. Chances are if that turns out to be a viable business in a depressed economy, some canny operator will find a way to take advantage of that too.
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