Santander to pay $550 million over predatory auto loans
 
Greedy subprime auto lending giant Santander is settling charges filed by 33 state Attorneys General and the District of Columbia, by paying $550 million.

The law enforcement officials charged Santander with engaging in predatory auto lending practices, including:
  • Approving auto loans Santander knew low-income car buyers could not possibly repay, resulting in an astronomical and devastating default rate of over 70%
  • Turning a blind eye to common scams that auto dealers engage in, such as falsifying loan applications to make it appear the used car buyers had far more income than they really had
"Santander profited by approving high-cost loans to disadvantaged auto buyers who were doomed from the start," said California Attorney General Xavier Becerra in a statement.

As part of the settlement, Santander will provide over $99 million in relief to thousands of California consumers who Santander approved for its abusive high-cost loans.

  Subprime auto lender Santander deliberately doomed car buyers to have their vehicles repossessed
 
Consumers with the lowest quality loans who had defaulted as of December 31, 2019, and have not had their cars repossessed, will be allowed to keep their car and have any deficiency balance on the loan (up to a total value of $45 million in deficiency waivers nationwide) waived.

Santander will also waive the deficiency balances for certain defaulted consumers across the country, with approximately $433 million in immediate forgiveness of loans still owned by Santander, and additional deficiency waivers of loans that Santander no longer owns but is required to attempt to buy back.

When consumers default on auto loans, lenders like Santander swoop in and repossess their vehicles, often causing them to lose their jobs. When car buyers lose their only way to get to work, some become homeless. In states like California with huge areas that provide little access to public transportation, losing a vehicle can be a death sentence, particularly for people who are elderly or disabled, or live in rural areas or other parts of the state where they are unable to access health care without a car.

Did you have an auto loan with Santander? Or was your vehicle repossessed by Santander? We're very interested in hearing from you. Please contact CARS, so we can listen to your story and help prevent more people from falling prey to scummy subprime auto lenders.

Read more:

CBS News: Attorney General Becerra Announces Over $550 Million Settlement Against Nation's Largest Subprime Auto Financing Company for Deceptive Auto Loan Practices

Also: HUGELY popular, hilarious, and biting John Oliver video showing how unscrupulous auto dealers and lenders scam car buyers
 
 
Auto dealerships re-open - but is shopping there safe?
May 12, 2020
 
Buying cars at auto dealerships has always been risky. But especially now, when you may be exposed to Covid-19, the risks are even greater. Plus Covid-19 isn't the only health and safety risk you face if you shop at a car dealership.

Many auto dealers don't care enough about their customers' safety to take the simple step of ensuring that FREE safety recall repairs are done to fix deadly safety recall defects.

Auto dealers neglect to get free repairs done to fix killer defects like:
  • bad brakes
  • steering wheels that literally come off in the driver's hands
  • exploding Takata airbags that are like having a hand grenade go off in your face, causing blindness or bleeding to death
  • catching on fire
  • sticking accelerator pedals
So can you trust auto dealers to protect you from Coronavirus? Obviously, the answer is NO.


Even huge auto dealership chains like CarMax and AutoNation sell hazardous vehicles with safety defects that have killed hundreds of people and seriously injured thousands more.

They spend millions in advertising to lure car buyers to their stores, trumpeting that vehicles they offer for sale must pass an "inspection." They list over 100 components that are supposedly inspected. But don't be fooled. They routinely fail to fix components with serious safety recall defects that are likely to kill you or someone you love.

CarMax is the largest retailer of used cars in the U.S. They raked in over $18 billion in revenue last year, and are publicly traded on Wall Street.

CarMax used to hire employees and task them with delivering recalled cars to nearby new car dealerships for free repairs. New car dealers liked to get the work. Auto manufacturers compensate their franchised dealers for performing safety recall repairs, so it's a money-maker for them.

Do Bill and Melinda Gates know that AutoNation deliberately sells consumers dangerous recalled cars with killer safety recall defects?
But then CarMax decided they could make more money by lowballing consumers who traded in recalled vehicles, then selling them rapid-fire for high retail as "CarMax Quality Certified" vehicles without waiting for the free repairs.

AutoNation is also publicly traded on Wall Street and boasts they are a Fortune 500 company with over $21 billion in revenue. Their largest investors include the trust controlled by the Bill and Melinda Gates Foundation.

At first, AutoNation announced they would guarantee that all their vehicles were recall-free. But when Trump was elected, faced with competitive pressure from CarMax for investor dollars, they gave up and started selling dangerous recalled vehicles too.

The kicker: If you are injured or killed, or harm someone else because of an unrepaired safety recall defect, the dealers will blame YOU for buying a dangerous car from them.

Learn more:

CBS News: CarMax Accused of Selling Unsafe Vehicles

CBS This Morning: AutoNation Accused of Selling Recalled Cars

CARS tips: How to get a good deal on a nice, safe used car without the risks of buying from a dealer
 
 
Profiles in GREED:
Multi-billion $$ mega-dealers AutoNation, Penske, and Group One Grab
At least $144 million from Paycheck Protection Plan
Trump Administration Aided Giant Corporations in Exploiting Loophole
AutoNation, the nation's largest retailer of new vehicles, boasts that it's a "Fortune 500" company with 26,000 employees and stores in over 300 locations in 18 states. In 2019, AutoNation raked in over $21 billion in revenue.

The corporate behemoth is also publicly traded on Wall Street. According to Barrons, "Bill Gates remains AutoNation's largest shareholder. Through shares held by the [Bill and Melinda Gates Foundation] trust and 18.4 million AutoNation shares that Cascade owns, the co-founder of Microsoft (MSFT) still has total ownership of 19.3 AutoNation shares, a 21.6% stake."
 
  AutoNation grabbed at least $77 million that was supposed to help small businesses survive during the Covid-19 lockdown
 
Penske Automotive, another giant auto dealership chain publicly traded on Wall Street, hauled in over $22.8 billion last year.

Group One Auto's annual revenue was $12 billion.

So how did AutoNation, Penske, and Group One grab at least $144 million from the U.S. Treasury's Paycheck Protection Program (PPP), while struggling businesses like restaurants, beauty parlors, nail salons, print shops, booksellers, self-employed people, and other small businesses tried in vain to access relief that was supposedly going to help them keep the wolves from their doors?

The PPP was supposed to be limited to businesses with fewer than 500 employees. But AutoNation, Penske, and Group One exploited a loophole provided by the Trump Administration's Small Business Administration for mega-businesses with franchises in multiple locations, allowing them to each file for relief separately, even when they are all owned by the same conglomerate.

  If you're a small business owner, did Autonation grab your PPP cash before you could?
 
The National Automobile Dealers Association (NADA) tutored its mega-dealer members on how to exploit the loophole, instructing them how to get around the 500-employee limit. The key to evading that limit was for the auto manufacturers to get a "franchise identifier code" from the Small Business Administration, so their dealerships could all masquerade as "small businesses" even when in reality they are enormous.

The NADA also engaged in various machinations to make sure all their dealer members, regardless their size, could apply for the taxpayer funds. The NADA brags that when the CARS Act was first passed, only about 25% of the U.S. auto manufacturers had obtained the coveted codes from the Small Business Administration. However, "in response to strong urging from NADA, all [the auto manufacturers] without codes quickly applied for them. And again in response to NADA's advocacy, the SBA has now granted all of those applications."

Basically, the NADA is trumpeting the fact that huge auto dealership chains exerted their influence with the Trump Administration, to get the SBA to expedite providing those handy "franchise identifier codes" in time to scarf up at least $144 million of taxpayer dollars before day care centers, ice cream parlors, pet sitting services, bakeries, or other mom and pop stores desperate for cash even had a chance.

Here are the NADA's tips:

The 500 Employee Size Limit in the Paycheck Protection Program Section of the CARES Act: How Does It Apply To Dealers?

In fact, AutoNation may have snatched even more. According to the Washington Post, "Documents show the company may have received even more money, a total of $95 million, spread across dozens of locations, an amount that would be more than triple the amount any company is known to have received through the fund." The article notes that "AutoNation disputes the $95 million figure."

AutoNation sells dangerous recalled used cars without repairing safety defects like exploding Takata airbags. Stephanie Erdmann was blinded in one eye by this life-threatening defect.
While AutoNation claims it has returned $77 million in taxpayer funds it scooped up from the PPP, without an independent audit of the program, they can hardly be believed. For weeks, while other corporations like Shake Shak and Ruth's Chris SteakHouse, facing a firestorm of protests, surrendered their ill-gotten millions. Meanwhile, ignoring the plight of small businesses and laid-off workers, AutoNation callously clung to the vast sums they seized from taxpayers -- until they were contacted by reporters from the Washington Post.

This is not the only way AutoNation is exploiting loopholes provided to auto dealers by the Trump Administration.

AutoNation is also jeopardizing public safety by deliberately selling its customers hazardous vehicles without repairing deadly safety recall defects first.

When Trump was elected, AutoNation's CEO Mike Jackson announced AutoNation was reversing its policy of guaranteeing a recall-free car, and commenced selling dangerous deathtrap vehicles -- including vehicles AutoNation knows cannot be repaired for prolonged periods, due to severe shortages of replacement parts.

Last fall, researchers for USPIRG Education Fund, the Consumers for Auto Reliability and Safety Foundation, and Frontier Group found that more than 1 in every 9 vehicles AutoNation offered for sale at 28 dealerships in 12 states, among 2,400 vehicles surveyed, had at least one unrepaired safety recall. Typical defects: catching on fire, faulty brakes, loss of steering, sticking accelerator pedals, and explosive Takata airbags that are ticking time bombs that spew shrapnel into drivers' and passengers' faces and necks, causing serious injuries including blindness and bleeding to death.

Read more:

Washington Post: AutoNation, a Fortune 500 company worth billions, says it received nearly $80 million in SBA funds

Automotive News: AutoNation retreats on used car recall policy

Also: Unsafe Used Cars for Sale: Unrepaired recalled vehicles for sale at AutoNation dealerships
 


Are car dealers exposing people to coronavirus?
March 23, 2020
 
Lara Gass died in a car fire Tuesday morning, March 18, 2014, on northbound Interstate 81 after a chain reaction wreck during icy conditions.
Many car dealers engage in reckless practices that put lives at risk. Like selling new or used vehicles without bothering to get the FREE safety recall defects fixed first. Tragically, some people have been seriously injured or killed by car dealers who sold them cars, trucks, or SUVs with deadly defects.

So it’s only reasonable to ask: Are auto dealers also exposing car buyers and their families to the coronavirus? Some car dealers are attempting to reassure prospective car buyers, who are understandably concerned about the coronavirus pandemic, not to worry. For example, AutoNation claims on Twitter that it ”can service and then sanitize your vehicle with Clorox® Total 360®.” The use of the term “sanitize” implies that there’s nothing to worry about.

Stephanie Erdman's life 'changed forever' when she lost part of her vision after a minor accident in her 2002 model Honda.
But how can anyone trust AutoNation, when their then-CEO told the whole world — right after Pres. Trump was elected — they were going to rev up their sales of seriously defective recalled used cars? Especially vehicles where there are no replacement parts available, so if you buy one of their “cream puffs,” there’s no way you can get it fixed, for weeks or months. Meanwhile, you are left to ride around in a potential deathtrap.

Last fall, Researchers found that more than 1 in 9 vehicles AutoNation was offering for sale at various stores across the nation had at least one unrepaired safety recall defect. Like faulty brakes, catching on fire, loss of steering, accelerator pedals that stick, stalling in traffic, hoods that fly up and obscure the driver’s vision, and many vehicles with ticking time bomb Takata airbags that explode like having a hand grenade go off in your car, causing devastating injuries such as blindness or bleeding to death.

If a huge car dealership chain that rakes in billions of dollars a year, is a Fortune 500 company, and touts Bill Gates as its biggest investor, will stoop to deliberately selling vehicles that grossly defective and unsafe, can you trust them to protect you from an unseen threat like coronavirus? Do you want to bet your life on it?
 
 
 
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Buyer Beware! Auto dealers use
forced arbitration
to get away with cheating customers
Even when car dealers flagrantly violate consumer protection laws, you may not be able to get justice. That's because almost 100% of car dealers stick "forced arbitration" clauses into their contracts. If they cheat you, and you try to take them to court, they can just laugh at you. That's because they can get your case kicked into arbitration -- a secret, rigged process that favors big, corrupt lawbreakers. The dealer often gets to choose the arbitration firm, and even the arbitrator who hears your case. Unlike judges, arbitrators are perfectly free to ignore the law.

Dealers claim that arbitration is quick. But Jon Perz in San Diego had to wait over 8 years in "arbitration limbo" before he finally got justice, after Mossy Toyota sold him an unsafe car. CARS produced a short video exposing what happened. More than 1.3 million people have watched our video on YouTube:
See the billboard CARS displayed
right next to Mossy Toyota's car lot,
and read more about how Jon finally won.

 
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