Are dealers misbehaving, or are complaints ancient history?

Jim Henry is a special correspondent for Automotive NewsJim Henry is a special correspondent for Automotive News
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Dealers and their advocates acknowledge that there are some problem dealerships. But some industry insiders are convinced there's an element of urban legend in some of the complaints that come up at public forums about payment packing, "yo-yo financing" and the like.

Last week Michael Benoit, a Washington, D.C.-area lawyer who represents car dealers, told an Automotive News F&I Week panel that, to his knowledge, one anecdotal complaint against dealers that came up last year at a Federal Trade Commission roundtable discussion has been making the rounds for "more than 30 years."

FTC attorney Carole Reynolds responded, "I don't think the problems that we have seen are necessarily 30 years, or something that happened 30 years ago. So I just need to come back on that point." Reynolds, senior attorney, FTC Division of Financial Practices, was another F&I Week panelist.

Benoit said, "You're absolutely right, Carole."

Nevertheless, the feeling persists among some dealers and their advocates that except for a few rotten apples, some common complaints against dealers are twice-told tales and largely out of date among reputable new-car dealers.

The FTC and the new Consumer Financial Protection Bureau have said repeatedly that if and when they make rules for auto lending, they will make decisions based on data, not on anecdotal evidence.

Meanwhile, both sides are skeptical.

You can reach Jim Henry at autonews@crain.com.

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