C.A.R.S. in the News

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The New York Times
April 19, 2011 "Several major rental car companies have told the National Highway Traffic Safety Administration that in some cases they continue to rent vehicles that have been recalled if they believe the problem is not serious....But as N.H.T.S.A. sees it, there is no such thing as an unimportant recall. 'All safety recalls resulting from defects present an unreasonable risk to safety and we believe it is inappropriate to suggest that some defects are not risky enough to require repair,' Karen Aldana, a spokeswoman for the safety agency, said in an e-mail. 'For the safety of the motoring public, all recalled vehicles should be fixed promptly.' "

Read more: http://wheels.blogs.nytimes.com/2011/04/19/faced-with-recalls-rental-companies-sometimes-decide-to-wait

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CBS Sacramento,
Channel 13: Rental Car Recall
"A California mother made an emotional plea at the State Capitol after losing her two daughters to a horrific crash blamed on a recalled vehicle. Cally Houck lost her two daughters, 24-year-old Raechel and 20-year-old Jacqueline near Kings City in Central California in 2004. They lost control of the Chrysler PT Cruiser they had rented."

See report: Call Kurtis: Rental Car Recall
  ABC -- KGO-TV San Francisco,
Channel 7:

New California bill targets rental car companies
"Consumer groups are applauding a bill introduced in Sacramento that would stop car rental companies from renting out vehicles that are facing a safety recall."

See report: New Calif. bill targets rental car companies
  NBC / MSNBC --- KCRA-TV Sacramento,
Channel 3:

Bill to require safer rental cars announced
Consumer groups applauded a bill Wednesday that would prevent rental car companies from renting any vehicle facing a safety recall... Also attending was Carol Houck, whose two daughters were killed in 2004 in a crash while driving a PT Cruiser. That vehicle, which they rented from Enterprise, had been under a federal recall order due to a steering problem.

"Had this bill been in place in 2004, my daughters would be here," said Houck.

See report: Bill To Require Safer Rental Cars Announced
  Santa Cruz Sentinel
by Jondi Gumz

Assemblyman Monning to introduce rental car safety bill
SANTA CRUZ - Rental cars recalled for safety reasons would be grounded until repairs are made if a bill proposed by Assemblyman Bill Monning, D-Carmel, becomes law.

Monning said a "loophole" in federal law allows rental car companies to rent out vehicles that are under recall while new car dealers are prohibited from selling new cars under recall until they are repaired.

He is expected to introduce AB 753 this morning at a news conference in Sacramento.

He said the measure was prompted by the death of two Santa Cruz residents, Raechel Houck, 24, and her sister, Jacqueline, 20, in a fiery crash in 2004 while driving a PT Cruiser rented from Enterprise Rent-A-Car. The car had been recalled for a defective power steering hose prone to catch fire, but it hadn't been repaired.

See report: http://www.santacruzsentinel.com/ci_17676460

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San Jose Mercury News
Aug. 9, 2010
By Jondi Gumz

Advocates urge FTC to stop defective car rentals at Enterprise that killed Santa Cruz sisters
"Two auto safety advocacy groups petitioned the Federal Trade Commission Monday to prevent the nation's largest rental car company from renting out recalled but unrepaired vehicles to customers."

Read more: http://www.mercurynews.com/breaking-news/ci_15721653

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National Public Radio
All Things Considered
July 21, 2010
By Scott Horsley

New Law Protects Consumers from Non-Bank Lenders
HORSLEY: The new law represents the biggest change to financial rules in decades. But it largely exempts one group of lenders: Car dealers fought to be saved from the new bureau, and they won.

Ms. ROSEMARY SHAHAN (President, Consumers for Auto Reliability and Safety): It's a huge loophole because auto lending is second only to home mortgages and bigger than credit cards.

HORSLEY: Rosemary Shahan heads a California-based consumer group that specializes in cars and car loans. She says some of the risky lending practices that plagued the subprime mortgage industry can also be found on the nation's car lots.

Ms. SHAHAN: In fact, there are some folks that will tell you that those practices started with auto and spread to home mortgages: The falsified loan applications, getting people into loans they couldn't afford, securitizing everything and spreading the risks throughout the financial system.

HORSLEY: Car dealers aren't entirely off the hook. The new law gives the Federal Trade Commission additional power to crack down on dealers if it finds unfair practices.

Read more: http://www.npr.mobi/templates/transcript/transcript.php?storyId=128672529

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Parade Magazine
July 11, 2010
by Earl Swift

"Red, White, and Scammed: how the U.S. Army's Diann Traina and other young military personnel are getting
ripped off -- and what's being done to help them"
"So pervasive are the rip-offs -- and so troubling the debt incurred by military personnel as a result--that U.S. Department of Defense officials recently labeled the situation a threat to national security....

'There are a lot of people who see service members as cash cows,' says Holly Petreaus, director of the military program of the Better Business Bureau (BBB) and wife of Army Gen. David Petreaus, whom President Obama recently named to serve as commander of U.S. and NATO forces in Afghanistan. 'Go to any city with a big military installation, and there's a cluster outside the gates -- Fast Freddy's auto loans, pawn shops, check cashers.'

Perhaps the most obnoxious offenders are those who pose as all-American boosters. 'They put up big flags and say, "Welcome, sailors; welcome, soldiers," says Rosemary Shahan, president of the Consumers for Auto Reliability and Safety, a nonprofit auto-industry consumer watchdog based in Sacramento. 'But the bigger the flag, the worse their practices.'"

Read more: http://www.parade.com/news/2010/07/11-red-white-and-scammed.html

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USA Today
June 11, 2010
By Paul Wiseman

Auto dealers could see new financial regulations
"'Don't let the manager ... keep you from being able to read the documents, telling you just to
"sign here," ' says Rosemary Shahan, president of Consumers for Auto Reliability and Safety in
Sacramento. 'Take the filled-out forms and go sit down and ... pore over them. You may find that you
negotiated a good deal verbally, but what is in writing could be very different. ... If they switched the
terms on you, walk away.'"

Read more: http://www.usatoday.com/money/autos/2010-06-11-financialreg11_ST_N.htm

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Consumer Reports
How to avoid hidden traps in dealer-financed auto loans
June 11, 2010

"As Congress debates whether dealer-assisted financing should be regulated by a new consumer
financial protection agency, there’s still much you as a prospective car buyer can do to protect yourself
against predatory dealer practices.
Rosemary Shahan, president of California-based Consumers for Auto Reliability and Safety
(CARS), advocates avoiding dealer-arranged financing entirely."

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CNN Money
Financial Watchdog: More disclosures, fewer hidden fees
May 18, 2010
By Jennifer Liberto

"'Yo-yo loans are illegal but nobody's policing it,' said Rosemary Shahan, president of
Consumers for Auto Reliability and Safety. 'It's up to state officials, but ask your state attorney general
how many times he's brought a case against an auto dealer.'"

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Los Angeles Times -- Tribune News Services
This report was also printed in Stars and Stripes
May 14, 2010
By Janet Hook and Jim Puzzanghera

Financial reform pits car dealers against military
"'It's a fact that military personnel love their cars,'" Holly Petreaus said in a conference call with
reporters this week. 'Sadly, many of them end up paying far more for them than they should.' "
Consumer advocates also oppose the auto dealer exemption. Rosemary Shahan, president of
Consumers for Auto Reliability and Safety, a Sacramento, Calif., nonprofit advocacy group, said auto
dealers pack financing contracts with costly items such as extended warranties and insurance to cover
loan payments if the vehicle is wrecked. 'Even very sophisticated consumers get ripped off,' she said."

Read more:
http://www.stripes.com/news/financial-reform-pits-car-dealers-against-military-1.102677

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Huffington Post
May 12, 2010
by Gary Rivlin

More Special "Loopholes"? The Pentagon Versus the Car Dealers
"'The Obama administration gets it,' Shahan said. 'They know you can't regulate auto lending
without regulating the dealers. The dealers control the flow of money and the terms.' To Shahan's way
of thinking, the Pentagon gets it as well. That's what makes this so potentially interesting a political
fight. The Department of Defense has thrown its considerable heft behind those insisting that
automobile purchases and dealer-assisted financing need to be part of any comprehensive financial
reform package.
'What the car dealers do the military is disgraceful,' Shahan said.
Talking with Shahan means learning a whole new vocabulary. In the New York Times, I wrote
about a soldier at Fort Hood who fell victim to what consumer advocates call the 'yo-yo deal.'"

Read more:
http://www.huffingtonpost.com/gary-rivlin/the-pentagon-versus-the-c_b_574406.html

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New York Times
May 12, 2010
A Proposal to End Shady Car Dealers
By Gary Rivlin

"Even the Pentagon has weighed in, insisting that automobile purchases and dealer-assisted
financing should be part of any new financial legislation because low-income military people are
victimized in large numbers by shady car dealers that set up shop just outside many bases.
Officials say distractions caused by these bad auto deals could affect the readiness of the armed
forces...
For Matthew Garcia, a 25-year-old Army specialist stationed at Fort Hood in Texas, a car deal
gone sour has been “one more giant thing to worry about” as he prepares for a deployment to
Afghanistan as early as June.
Consumer advocates call it the “yo-yo deal.” In September, Mr. Garcia found a 2005 Dodge
Neon he liked at a used car lot near the barbershops, tattoo parlors and check cashing stores that
invariably line the main roads just outside any military base.
He agreed to a deal in which he would pay 19.9 percent interest on a $12,000 loan and signed
what he believed was a binding contract. He drove off. But several days later the salesman summoned
him back to the lot, Mr. Garcia said, to tell him the financing had fallen through.
He had signed only a conditional contract, he was told. If he wanted to keep the car, he would
need to put up an additional $2,500 in cash. Mr. Garcia refused, but by that time someone had blocked
his car so he could not leave. He said the dealership would not return his $1,500 down payment."
(Note: CARS contributed to this report, included putting the reporter in touch with Sgt. Garcia.)

Read more: http://www.nytimes.com/2010/05/12/business/12dealers.html

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Denver Post
Auto dealers fight regulatory reform bill
May 10, 2010
by Michael Riley

"But auto dealers are among the biggest originators of consumer credit in America, and the
exemption would blast a hole in the idea that sweeping regulatory reform should include some of the
most basic instruments connecting consumers to global finance — credit cards, auto loans and home
mortgages among them.
'Their practices have gone from bad to worse in these harsh economic times,' said Rosemary
Shahan, president of Consumers for Auto Reliability and Safety.
'They're telling you they're getting you the best possible rate, which is a joke. This is how they
make most of the money these days, through the financing,' Shahan said of new- and used-car
dealerships.
The Center for Responsible Lending recently issued a report calculating that the additional loan
markup by new- and used-car dealers cost consumers $20 billion in 2007 — and cost $318 million to
consumers in Colorado alone.
A new consumer regulator could require auto dealers to disclose the size of the markup or limit
it to a set fee. 'They tell you this loan is the best you can do,' said Shahan. 'It's not.' "

Read more: http://online.indianagazette.com/articles/2010/05/10/news/doc4be8d500934a1724074057.txt

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Car dealers may not win haggle with Feds
Delaware News Journal
May 30, 2010
By Jonathan Starkey

"'You can't police auto lending without policing car dealers who are the ones that negotiate the
terms of the loan,' said Rosemary Shahan, president of Consumers for Auto Reliability and
Safety. 'They have tremendous power in that transaction.'"

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National Public Radio
December 9, 2009
By John Ydstie

Bill Exempts Auto Dealers from Agency Oversight
"But consumer advocates argue that the dealer's role in financing vehicles is about as passive as
a truck ad. 'Auto dealers are very active players,' says Rosemary Shahan, a consumer advocate and
longtime auto industry critic. 'They have a huge influence over the kind of loan that most people get
when they buy a car.'
In about 80 percent of auto sales, car dealers are not lending their own money; they're arranging
loans for their customers with banks or finance companies. But the deals bring in huge profits for
dealers, Shahan says, and there are a lot of ways for them to make money in the process.
'You fill out a credit application, and a dealer submits it to a lender. And what they're not telling
you is they get a kickback in exchange for raising the interest rate on your loan,' she says."

Read more: http://www.npr.org/templates/story/story.php?storyId=121224829