Dealer Fraud

Cubstoners are trying to get around the law by selling their cars on the street by pretending to be private sellers.
Curbstoning is the practice of auto dealers masquerading as private parties when selling their cars. Curbstoning car dealers use the practice as a way to sell inferior cars to unsuspecting consumers. There is probably a street or parking area near your residence where there are numerous cars for sale. Many of these cars are placed in public view by “curbstoners“, so named because they are parking the cars along a curb. Many of these curbstoned cars may very well be lemons car dealers can’t sell on their lots.
Crooked auto dealers use curbstoning as a way to circumvent state laws regarding the sale of cars. States have limits regarding how many cars a person may buy and sell in a given period without having to be a licensed car dealer. Licensed car dealers have requirements that they have to meet to stay in business. Curbstoners do not.

Buying a new or used car?  Don’t get cheated by "Phony Financing"
It’s the auto industry’s dirty little secret. It  happens to millions of car buyers every year, even with the most sophisticated, savvy consumers. And you don’t even realize you’ve been cheated.
Phony Financing
The secret? Auto dealers commonly bump up the interest rate you pay to finance your car, truck, or SUV. Over the life of the loan, the extra hidden interest you pay costs you hundreds or even thousands of dollars in added financing costs. These are costs you should not have to pay.
For example, if your credit is good, you may qualify for a loan with a 4% interest rate. But the dealership charges you 8%. Or 12%. Or sometimes 21% or more.
The dealer gets a hidden "kickback" or fee from the lender based on the amount of interest you pay. The more you pay in interest, the more profit the dealer makes. Typically, the dealer and lender split the extra interest you pay 60-40, with the dealer pocketing the lion’s share.
The dealership finance manager may seem friendly and tell you, "Don’t worry. I’ll get you the best possible rate." But instead, he will charge you the highest rate he can. He may even mislead you into thinking your credit is worse than it really is.
This scam affects almost everyone who finances through a car dealer. But studies show that the added costs are likely to be even higher if you are African American or Latino.

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Car-dealer fraud is plaguing our country. The tactics being used are so sly that even informed consumers who do their homework are being taken for hundreds, and often thousands, of dollars.

These scams add many millions of dollars each year to the profits of car dealers at the expense of consumers. While some profit is necessary, consumers are being ripped off beyond reasonable need through the sale of useless add-on products and services, the unnecessary markup of vehicle prices, the hidden inflation of loan terms and by other means described in our report.

Evidence from recent litigation, industry insiders and consumer complaints show that these practices are not restricted to a few areas or dealerships. Further, it is very likely that deceitful trends are spreading as more and more dealerships become part of major conglomerates.

Public Citizen does not believe that graft is necessary for auto dealers, as an industry, to remain economically viable. We also do not believe that that all — or even most — dealerships are corrupt. Dealers should work with law enforcement to root out corruption where it exists and should commit to creating a transparent, accountable and consumer-friendly sales and financing process.
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[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]