Altima deal was 'bad bargain,' but Nissan dealer disclosed terms, court rules

While a Wallingford, Conn., Nissan dealership engaged in the “shamelessly admitted practice” of inflating the sales price of a new vehicle to offset a discount it gave for a trade-in, the practice didn’t violate the Truth in Lending Act, a federal judge in New Haven has ruled.

“Although the purchase of the car was without a doubt a bad bargain -- a price $7,172.80 above the manufacturer’s suggested price -- these were the figures disclosed on the [buyer’s] itemization of amount financed, and they represent a true and accurate description of the terms of her credit arrangement,” U.S. District Judge Charles Haight Jr., said in dismissing buyer Marisol Morales’ lawsuit against Barberino Nissan last month.

The dealership “may have proffered a bad bargain, but it did not do so by distorting a credit arrangement,” he added.

While rejecting the TILA claim, the judge said Morales can refile her pricing-related consumer protection claims under Connecticut law in state court.

Her lawyer, Daniel Blinn of Rocky Hill, Conn., said the Morales case and a similar case by another client against the dealership will be filed in state court. “The remedies under the state statute are actually broader,” he said.

Dealership lawyer Nicole Chomiak of Cheshire, Conn., said she couldn’t comment on the case.

201,000 miles

Here’s what happened, according to the judge’s decision.

In December 2014 Morales bought a new 2015 Altima at Barberino Nissan. At the time, the store was advertising a $3,500 discount for trade-ins regardless of their actual value. A condition of the program was that the buyer couldn’t negotiate the price of the vehicle.

The manufacturer’s suggested retail price listed on the Altima’s Monroney sticker was $24,150. The dealership, though, offered Morales a cash price of $31,323, which included, as was the store’s custom, an upcharge in the amount it credited for the trade-in, in this case the advertised $3,500. Morales’ trade-in vehicle was a 2001 Toyota Camry, which had about 201,000 miles and “whose actual value approached $0,” the decision said.

Morales purchased the Altima, financing $29,280.23 at a rate of 14.95 percent. The assessed finance charge was $15,517.45. She later became dissatisfied with the deal and went to federal court.

Her suit accused the dealership of violating the Truth in Lending Act by, among other things, failing to accurately itemize the amount financed in light of the fact that the cash price had been inflated to recoup the trade-in discount.

The suit also alleged a failure to accurately disclose the finance charge under TILA, as well as improper and deceptive practices under Connecticut’s consumer protection law.

Barberino Nissan denied the allegations, arguing that it had properly disclosed the finance charge and that in terms of pricing, it charges an “identical” amount whether selling a vehicle for cash or credit.

‘Disclosed amount’

The judge sided with the dealership, finding no factual basis for a Truth in Lending Act claim. “In such a situation, the finance charge requirement of TILA, ‘a disclosure statute, not a fair pricing law,’ is not applicable,” he held.

“Despite its program crediting customers $3,500 for all trade-in vehicles, Barberino readily acknowledges its policy, which it applied as to Morales’s purchase, to include in its initial cash price offer for the car the amount it credits to the customer for the trade-in,” the decision said.

“In short, Barberino’s trade-in program policy, which it applied to Morales, was to deduct a $3,500 purported trade-in value only from a non-negotiable cash price offer that included a $3,500 upcharge,” the decision continued. “In other words, Barberino effectively credits customers like Morales $0 for their trade-ins despite advertising that it would offer them a $3,500 credit.”

Morales also asserted there were inaccuracies in the itemization of amount financed but the judge said he didn’t identify any such factual errors.

“The contract stated that she would be financing $29,280.23 and she in fact did finance $29,280.23 and owed as much ultimately to the lender,” the judge said. “For the purposes of TILA, it is of no moment that the disclosed price included the $3,500 value of her trade-in car despite the store’s advertised trade-in program.”

He continued: “Although that price was inflated in light of the store’s practice of, in essence, erasing the benefit it purported to offer through its advertised trade-in program, it was a disclosed amount.”

You can reach Eric Freedman at

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