Morristown, NJ

3 NJ Car Dealerships Reach $400k Settlement Over Consumer Protection Violations

Morristown Minute

As prices rise nationally, 3 NJ dealerships caught up-charging customers for used vehicles.

Open Road Auto Group, Glen Motors, and Lynnes Dealership came to a settlement with DCA over allegations of illegal and deceptive practices used to up-charge customers for used cars.

Acting Attorney General Platkin and the Division of Consumer Affairs today (5/20/2022) announced separate settlements totaling nearly $400,000 with three car dealerships for alleged consumer protection violations.

The alleged violations included:

  • failing to disclose prior accident history
  • deceptive advertising
  • failing to honor vehicle warranties
  • failing to list vehicle prices on sales documents
  • charging consumers for certain fees twice
  • failing to itemize aftermarket products or dealer-installed options
  • failing to obtain consumer signatures on all sales documents
  • accepting incomplete credit applications from prospective buyers

In addition to paying civil monetary penalties, the dealerships agreed to refrain from engaging in any unfair or deceptive acts or practices, comply with all state and federal laws, and resolve consumer complaints.

“Dodging illegal practices should be the last thing New Jerseyans have to worry about as they search for a vehicle in this challenging market,” said Acting Attorney General Platkin. “These settlements demonstrate our commitment to protect consumers and ensure transparency in the state’s auto market.”
“In addition to providing relief to affected consumers, these settlements make clear that we will not tolerate car dealerships that disregard our laws and regulations.” – Acting Director of the Division of Consumer Affairs Cari Fais

Open Road Auto Group, which operates fifteen locations around New Jersey, agreed to a $300,000 settlement to resolve allegations of:

  • failing to disclose prior accident history
  • using deceptive advertising
  • failing to honor vehicle warranties.

Under the terms of the settlement, Open Road Auto Group, among other things, agreed to:

  • disclose the total cost, the down payment, trade-in, or rebate, if any, plus the total scheduled periodic payments in advertisements
  • include a statement that “prices include all costs to be paid by the consumer, except for licensing costs, registration fees, and taxes,” in the advertisement of new or used vehicles
  • disclose if a motor vehicle has been previously damaged and if substantial repair or bodywork has been performed on it
  • refrain from charging customers for work done or parts supplied in excess of any estimate, without oral or written consent from the customer
  • accurately disclose the purchase price of any dealer-installed options
  • refrain from misrepresenting to consumers that aftermarket merchandise, such as service contracts and window etch, are mandatory
  • itemize all aftermarket merchandise on leases, sales documents, and contracts
  • refrain from charging consumers separately for a “destination charge” on any advertised motor vehicle when the cost is already included in the advertised price
  • provide consumers with an opportunity to review all lease documents prior to signing.

Open Road Auto Group also agreed to provide a $100 service credit coupon towards service, maintenance, or repair for all consumers who purchased a vehicle in 2017 and were charged a wash and detail fee.

Additionally, the company will enter binding arbitration through the Division’s Alternative Dispute Resolution (ADR) Unit to resolve all pending complaints from affected consumers and any additional consumer complaints received by the Division for a period of three years.

Glen Motors Inc, located in Fair Lawn, agreed to a $90,000 settlement—which includes $66,088.98 in civil penalties—to resolve allegations that included:

  • failing to list the price of motor vehicles on its sales documents
  • failing to itemize aftermarket products or dealer-installed options
  • failing to obtain consumer signatures on all sales documents.

Under the terms of the settlement, Glen Motors Inc., among other things, agreed to:

  • itemize all aftermarket products on the leases, sales documents, and aftermarket contracts
  • provide an aftermarket contract containing a clear statement of the full total price, including an itemization of the aftermarket products
  • refrain from charging for aftermarket products that are not reflected in the leases, sales documents, or aftermarket contracts
  • provide a full and accurate copy of all leases, sales documents, and aftermarket contracts signed by the consumer
  • not misrepresent to consumers that dealer-installed options or aftermarket products are mandatory when such is not the case
  • itemize all pre-delivery services in writing on the sales document
  • refrain from adding or charging for aftermarket products or dealer-installed options without the consumers’ written authorization
  • honor all advertised motor vehicle prices, terms, and conditions
  • obtain the consumers’ signatures on all aftermarket contracts, leases, retail buyer’s orders, sales documents, and any other document that requires the consumers’ signatures

Glen Motors Inc. also agreed to enter binding arbitration through the Division’s ADR Unit to resolve all pending complaints from affected consumers and any additional consumer complaints received by the Division for a period of two years.

A portion of the settlement amount will be suspended and automatically vacated provided the company complies with the terms of the agreement over a two-year period.

Finally, the Division also announced a settlement with several Lynnes dealerships—Lynnes Nissan City, Inc, Lynnes Hyundai, LLC, and Lynnes Subaru, Inc.—all located in Bloomfield.

Lynnes agreed to a $46,381 settlement—which includes $33,500 in civil penalties to resolve allegations that included

  • charging consumers for certain fees twice
  • accepting incomplete credit applications from prospective buyers
  • failing to list vehicle prices on sales documents.

Under the terms of the Consent Order with the Division, Lynnes, among other things, agreed to:

  • comply with all applicable state and/or federal laws, rules, and regulations, including the Consumer Fraud Act, the Motor Vehicle Advertising Regulations, and the Automotive Sales Practices Regulations
  • itemize all aftermarket merchandise and dealer-installed options in the sales documents and aftermarket contract
  • include the trade-in value of a vehicle on all sales documents
  • not engage in a “bait and switch” by refusing to show, display, sell, or lease vehicles at the advertised price
  • accurately disclose the sale price of the vehicle on the sales documents
  • refrain from signing any aftermarket contract, lease, sales document, or other documents on behalf of a consumer or affixing a consumer’s signature to any document.

Lynnes also agreed to enter binding arbitration through the Division’s ADR Unit to resolve all pending complaints and to arbitrate, if necessary, any additional consumer complaints received by the Division for a period of three years.

A portion of the settlement amount will be suspended and automatically vacated provided the company complies with the terms of the agreement.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 to receive a complaint form by mail.

Meanwhile, the cost of purchasing a new or used vehicle has skyrocketed around the country.

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

By June of 2020, the United States saw its largest increase in cost for used vehicles. This price hike coincided with a global microchip shortage that restricted the new car supply and led to fewer people trading in their used cars. This diminished the new and used car supply and increased demand causing the price of used cars to soar.

The higher prices are further fueled by increased labor and production costs, as well as global supply chain delays. New and used car prices are expected to continue to increase throughout 2022.

However, J.D. Power forecasts that used-vehicle prices will drop by late 2022 and into 2023.

So if you’re looking to buy a new or used car, it may be beneficial to wait for next year when prices are expected to drop.

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