Car Dealer Arbitration Agreements ?????

[Bruce Dorsi]

Slightly off topic, but this practice may spread to your area soon!


I purchased a new Toyota vehicle yesterday.  ..... Well, at leat least I thought I did.

The vehicle was in the showroom and already prepped.  We agreed on the price, signed the sales contract, and shook hands with the salesman.

The vehicle was removed from the showroom and a customer rep explained all the controls and features of the vehicle, and handed my wife the keys.  ......All we had to do was pay for it.

We were handed off to another employee who processed the registration and licensensing forms.   ......I was given a bunch of forms to sign, which is not unusual.

Along with the licensing documents, I had to sign a statement confirming the 14 miles displayed on the odometer, and another statement stating that the dealer owed no additional equipment on the vehicle.  They also required proof of an existing insurance policy.  ....No problem!

The next document handed to me for my signature was an arbitration agreement, wherein I would forfeit any and all future claims against the dealer in a court of law, for any matter or dispute pertaining to the sale of this vehicle.   .....The agreement stipulated that binding arbitration was the only remedy I could pursue if any claims arise in the future regarding this vehicle purchase, and I would waive a trial by judge or jury.

The arbitration agreement further stated that the arbitrator would be selected by the dealer, and conducted on the dealer's premises, and costs would be paid as dictated by the arbitrator.   .......  (Hmmmm!!  Who do you suppose would have their interests best represented?)

Although I am opposed to frivolous lawsuits, and  class-action suits, I could see that signing this arbitration agreement was not in my best interest.  

When I declined to sign the arbitration agreement, the dealer informed me that they would not sell me the vehicle unless I signed the agreement.

I refused again to sign the agreement, and again I was told they would not give me the car unless I signed.    ......As I walked out of his office, my wife responded by leaving the keys on his desk, because she knew I would not sign.

When I told the salesman that the sale was cancelled, he thought I was joking, until he saw the steam coming out of my ears!    He quickly ran for his manager, who assured me that this was the dealer's policy, and that I was the first person who ever objected to the agreement.  ....When I asked if he or the salesman would sign such an agreement, both said they had never read it.

I thanked the salesman for his time with me, and told him that if this matter was resolved to my satisfaction, that I would still purchase the vehicle.  If not, then they wanted the vehicle more than me!  ..... I was told someone would contact me in the next few days, so we left.

When we arrived home, I phoned a respected friend to hear his opinion of the arbitration agreement.   ......Could I be the ONLY azzhole on Earth?

My friend Googled "car dealer arbitration agreement" and found some interesting reading.  ...He passed on this link to me:   http://www.commondreams.org/scriptfiles/views03/1206-09.htm
which may be helpful to some of you.

Has anyone else encountred this issue, and what was the outcome?

I apologize for being long-winded, but I wanted to relay the events accurately.

[1FATGMC]

And one more reason to be added to my list why I'll never buy a new car again (of course from your link it looks like they try and do the same thing with used cars).

I bought my last new vehicle about 12 years ago in Phoenix.  What a stressful experience.  I was paying cash, but all they wanted to talk about was monthly payments.  It took me forever to get them to tell me what amount I needed to actually pay for the vehicle and take it home.  Also all the promises of changes to the vehicle (big one was to replace the rear window with a slider -- this was a pickup) slowly got removed and I had to fight tooth and nail to get them to do what was suppose to be part of the deal.

The salesman would promise any thing and then after you agreed he would go talk to the sales manager who would change and delete things from the salesman's promises and then you would start another go around.  The good cop/bad cop thing.  I finally got rid of the sales person and would only talk to the manager to cut the games out.

I can't imagine someone saying that shopping for a new vehicle is fun.

You did the right thing in my book,

Sum

[Bruce Dorsi]

I learn something new everyday!   .....



More info available at:

http://www.autoissues.org/arbitration.htm

http://www.autoissues.org/top_ten_tips.htm

http://www.autoissues.org/arbitration_faq.htm

[MrMopar64]

Good Info....... Thanks!!  
Gald to hear they didn't get ya

MM64  

[phat46]

Good stuff to know, my wife and I are currently car shopping. this will be the first question I ask the sales guy from now on!

[Rayvyn]

Slightly off topic, but this practice may spread to your area soon!
Has anyone else encountred this issue, and what was the outcome?

I apologize for being long-winded, but I wanted to relay the events accurately.

Hey Bruce, I went through the exact same thing when I bought my Silverado in December. The same binding agreement. It releases the dealership from any and all claims against them as a representative of the product they sell. It's their way of getting around the numerous lemon laws.
I compare it to what alot of retail stores are doing now. If something breaks on a product you purchased from them, you have to deal with the manufacturer instead of just taking it back to the stores. The car dealers are getting the same way. That agreement is a common practice here in Florida.
It's a shame that a respresentative of a company, as what a car dealer is, will not be held responsible for breakdowns, failures, and shoddy parts and engineering on the cars they are selling. You can see the dealers have alot of faith in the products they're offering. NOT!!
They badger you with info about how great the car is, yet want nothing to do with it after it rolls out the door.

I did the same thing you did. Luckily I read every piece of paper they threw at me, because the agreement was slipped into the middle of the pile. Most folks get excited when they're signing for a new car and don't look at everything they should be paying attention to. The dealers know this and have perfected this routine.
I refused to sign the agreement also. The reason I got the truck without signing it, was because the finance mgr. slipped up and had me sign the title transfer paperwork before the agreement. When I refused and he started to argue, I tossed the keys down, and demanded my keys back. They had already taken the tags off my original truck and transferred them to the new one. The manager got involved and said they couldn't sell the vehicle unless I signed the agreement, and I fired back that they had already put my name on the title transfer sheet and signed it, and if I didn't get the vehicle, then I would call the Florida Dept of Highway Safety (which runs their DMV) and let them know they would be selling a USED vehicle as a new one, which constitutes fraud. I also showed them my Federal LEO credentials for emphasis.
Things changed immediately after that. I bought the truck and the agreement mysteriously disappeared.
How quickly things changed

[Crosley.In.AZ]

you gotta watch them.  I've not seen them arbitration agreements here yet.



here in AZ the dealers are trying to outlaw the car buying services Like credit unions or Costco offer.  With a buying service you pick the car & options you want , then get the reduced price up front ...... None of the bargining BS with the sales rep or manager.

Another thing to watch is the dealer having you fill out a credit application even IF you are writing a cheque for the vehicle or you have your own finance deal set with a credit union or bank.

The dealer gets points for a credit app if they use it or not... they sure squeel when you say NO on filling out the credit app!

[DrJ]

Doctors have been using those "not my fault" agreements for years, and if you want that hole in your body sewn up before you bleed out, you sign them... Right?

Yes, it's wrong.
I think the Doctors started it though.

That's why I buy everything on Visa and when the store says that's our policy I say I'm having Visa cancel payment and then I'll have the money and the piece of crap prduct, and then the store gives in. I have done this while standing right under signs that say "No refunds, Exchange or store credit only".
Cars?
I don't know, only signed for one new car in my life and that was four months ago and the Dealer only handled the delivery, not the sale since we bought it through Wife's work, Honda R & D.

[SKR8PN]

I think you  are correct about the doctors starting this.........
If I remember.......I signed one of those as they wheeled me into the operating room after I had my heart attack  I was flat on my back,wired for sound and had oxygen on me...............I gotta wonder just how well that would hold up in a court of law  

And I can understand WHY some of these car dealers would go for you signing an agreement like that  
Me thinks me will continue to rebuild old hunks of junk and drive them till the wheels fall off  

[DrJ]

....I gotta wonder just how well that would hold up in a court of law  
...

I don't know about other States, or if they even changed it here in California, but State law says you can't sign away rights given by the State by law.
For instance, the State says you (hourly empoyees?) have to be given a 1/2 hour lunch break after 5 hours of work, period.
You CAN NOT sign this away, the employer can't ask you to or have you sign an agreement waiving the break, otherwise all of them would!
I don't know about other States or if all dealers are trying to get away with this, but I bet these "agreements" aren't worth the paper they're printed on if you have a legitimate claim against any business.
Seems to me, they could try forcing you to waive your Factory Guarantee too...
Let's see, customer waives the seat belt and air bag installation and will never sue if the wheels fall off regardless of  Federal requirements...
I don't think you can sign away what is guaranted by law. What you need to do is KNOW what your State law guarantees you in business transactions.
Yes, I used to sell new and used cars..
Oldsmobiles and GMC trucks in '67 and '68

[donsrods]

Buying a new or used car off of a lot kind of makes me feel like I need a shower after it is over. Last new car I bought was in '86, and have had no car payments in all those years. I just prefer to buy a used one from a private owner and pay cash for it.

I actually stood up in the middle of one closing on a new car, leaned over the desk and told the salesman " I get so d### tired of you guys ripping me off", and walked out. They called the next day trying tp patch things up, but I never went back.

This agreement you mention stinks. As one member mentioned, when you are closing you are excited and just want to get out of there, so you blindly sign anything they put in front of you. Glad you were smart enough to catch their little trick.

What is the old joke........"how do you know when a car salesman is lying?  His mouth is moving."  Our Marina has a division where they sell boats, and it is no different there. People come in for their first service and tell us these promises our salespeople have made to them, and we say " HE TOLD YOU WHAT???"  Then we have to deal with an unhappy customer who feels they were cheated.

I know there are many honest salespeople ( I was one of them for years) but these snake oil salespeople give the rest of them a bad name.


Don

[Uncle Bob]

Good for you Bruce.  You're a responsible consumer.  I've never been a car salesman or dealer, but I've long been perplexed by the typical consumer whine we hear about "The dealer made me................".  Sorry, it's a person's own ignorance and emotion that's the root problem.  The dealer is certainly capitalizing on that, but only if the buyer allows it.  I liked your comment, "If not, then they wanted the vehicle more than me!".  My version, that I've had the opportunity to use a couple times, is "You need my money more than I need your car".  There are always other options out there.  (Well, maybe not if you're one of those folks vying for a Ferrari Enzo, but then again......)

 As your comments and some of the others indicate, the dealers are doing this because of a long history of law suits where attorneys sue any and every party within a hairs breadth of a situation.  As consumers we're part of the problem because we don't object to the courtroom lotto mentality that is far too prevalent.  

Again, congrats on showing responsibility for yourself and not making yourself a "victim".  My money's on you getting what you want before this is all done.

[Crosley.In.AZ]

I read through some of the links Bruce posted....  LOTS of information there.


One item that really burns my b*tt is all the add-on crap they want to sell .  The life insurance, gap insurance, over priced alarm systems, over priced extended warranty.....

We bought some acreage up in Taylor AZ........ the volume of paperwork to sign just on  land with no buildings on it  is unreal!

[reborn55]

great info--thanks for sharing with us.