May 25 2008
Auto Dealer Loan Packing Banned by Car Buyers Bill of Rights
Under the new Car Buyers Bill of Rights, dealers cannot misrepresent the cost of after-market items, such as service contracts, surface protection, debt cancellation insurance (GAP protection), and theft protection products. Some dealers in the past falsely told buyers theft protection cost only, say, $3/month, when really the cost was $35/month. The dealer hid the true cost in what the dealer said would be the monthly payment on the loan. This practice is known as loan packing. To guard against loan packing, dealers have to set out specifically the cost of each after market item in writing, such as theft protection.
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