Here’s a quick quiz for consumers: What word is most often featured in those Presidents Day car sales ads?
According to David Leach, principal examiner at Maine’s Bureau of Consumer Credit Protection, that is the last thing consumers should do.
“It’s a great time for Maine auto dealers, both new and used, to market and sell a good number of vehicles in what generally would be a pretty slow time of year,” Leach told me.
Otherwise sluggish sales prompt dealers to create promotions designed to spur quick action by buyers.
“Hurry is the antithesis of what a consumer should be in,” Leach added. He said consumers should adopt a deliberative, thoughtful process in which they thoroughly research their needs and assess their budgets.
With that in mind, the Bureau of Consumer Credit Protection has issued a special edition of its Downeaster Guide: Automobile Buying and Financing.
In his letter of greeting, Leach cautions that reforms in the mortgage lending industry have not yet reached the auto loan market. As a result, “it remains quite possible to purchase and finance a vehicle that you, the consumer, cannot afford.”
The guide goes on to list a half-dozen danger signs that a vehicle deal might go bad. One is title washing, in which damaged cars or trucks can be salvaged and resold, especially in other states.
A second tricky practice is called spot delivery, when a dealer allows a customer to drive a vehicle home “on the spot,” even if financing has not been formally approved. If that approval doesn’t happen, the buyer may have to pay the balance in full or return the vehicle.
A third area of concern is contract mistakes. Signing a contract means you agree its contents are correct. Signing could affect your rights in case of a dispute over the vehicle or loan. Certain clauses in a contract might cause problems; failing to maintain insurance on a vehicle might allow the creditor to repossess without sending a Notice of Right to Cure.
The guide also warns against title loans, when the consumer gives the lender a hard copy of the title so the vehicle is used as collateral. Such loans are illegal in Maine.
Watch out also for what are called “loaded” payments, which are monthly payments including add-on items the buyer did not request.
The guide offers a range of information about buying versus leasing, getting the best possible deals on loans and checking your credit reports. There also are tips on research you can and should do, and what to look for in the “closing room” before you sign on the dotted line.
The guide is available online by visiting the Bureau of Consumer Credit Protection website, at credit.maine.gov, and looking under “consumer guides.” Maine residents can receive a hard copy by calling the bureau toll-free at 1-800-332-8529.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email firstname.lastname@example.org.