NADA and AIADA reacted quickly and adamantly to a report released last week by the consumer group Public Citizen that alleged auto dealership fraud was widespread and should be investigated by all state attorneys general.
NADA Chairman Alan Starling issued the following response: The National Automobile Dealers Association condemns, in the strongest terms, any fraudulent or deceptive behavior in auto sales. This kind of behavior is indefensible. However, what Public Citizen has reported on is a number of extreme cases of fraud and deception. To suggest that this is part of some kind of national conspiracy is absurd.
Auto retailing is made up of 20,000 independent business men and women who employ more than 1.2 million people nationwide, handling more than 40 million new and used car transactions every year. The majority of new car dealers are family businesses that have been an important part of their local communities for decades. Repeat business is the cornerstone of their operation. Their business is based not only on making people happy, but getting them to tell everyone else how good they are.
To indict an entire industry is a great disservice to the overwhelming majority of auto dealers who treat each of their customers in an honest and open manner. It’s unfortunate that the bad businesses capture the headlines, but, in the end, they will not succeed, said Starling.
AIADA President Marianne McInerney told the Detroit News The [Public Citizen] report contradicted four independent evaluations over the last two years by Gallup, Wirthlin, Ernst & Young and Consumer Reports. Those studies suggest customer satisfaction levels for new-car purchase experiences are between 90-95%. They seem to be indicting the entire industry based on the practices of a very few, with little or no evidence, said McInerney. AIADA has prepared talking points and responses (enclosed in last week’s WANADA Bulletin) to the allegations made by Public Citizen, and Dateline NBC. These points can be accessed through the AIADA Web site, www.aiada.org.
The Public Citizen report, Rip-Off Nation: Auto Dealers’ Swindling of America, charges that dealers regularly bilk customers out of hundreds of dollars through price manipulation and costly financing deals. The organization based its report on a review of lawsuits against dealers filed in nine states and allegations made by Duane Overholt, the same former employee of Sonic Automotive who was interviewed extensively by Dateline NBC. The entire 71-page Public Citizen report can be viewed at www.citizen.org/documents/Rip-Off_Nation.pdf.
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