Buy Here Pay Here-Questionable Auto Loans

As an Oregon Consumer Lawyer I regularly represent Oregonians who are ripped off by car dealers.  I regularly receive calls from consumers who has issues with Auto lenders.  These issues can relate to the interest rate being charged, yo-yo scams, issues with the financing disclosures, or dealers trying to make consumers provide false information in order to obtain financing.  Sometimes, in their effort to get the car off of the lot, dealers will flagrantly violate the various laws that apply to them.  Other times, the dealer's conduct is legal, but morally questionable.

I have seen this as a growing issue in Oregon.  I am not alone with my concerns.  It appears there is a national trend in providing questionable auto-loans to consumers.  These questionable loans are sometimes written with very high interest rates (29% APR) and for extremely long terms (7 years).  What this means is consumers buying an $8,000.00 car may end up paying almost $15,000.00 for the car after the interest is added into the price of the cars.


The dealer's justify the high interest and lengthy terms of the loan by asserting that the consumer is a huge credit risk.  Most of the consumers that obtain these loans have horrible credit and are likely to default on the loan.  I have litigated cases where the dealers have stated that my client's credit was terrible and that my clients were fortunate enough to have someone like the dealer take the chance to finance the vehicle. 

From the consumer's perspective, these loans set them up for failure.   The high interest rate for lengthy terms sets the consumer up for failure.  The dealer knows that most people need a car for transportation.  Vehicles are almost necessities in many cities.  Additionally, the dealer already knows the consumer has issues with paying creditors, because the consumer has terrible credit.  Despite that, the dealer piles on more debt in an effort to get the car off of the lot.  Then when the foreseeable missed payment happens then the dealer repossesses the car and can re-sell it to another customer.   

 The dealer makes money on the transaction by: 1) getting to keep the trade-in or down payment the consumer made on the car and, 2) keeping the interest on the loan from payments already made on the loan before missing a payment, 3) sometimes dealers will attempt to re-finance the purchased vehicle or agree to take the vehicle back if the consumer purchases another vehicle from the lot (this usually re-starts the cycle), 4) the dealer gets to re-sell the purchased vehicle to another consumer and make money on that transaction. 

Additionally, the dealer's risk is much more manageable than the dealer leads people to believe. Dealer's can place devices in the vehicles that allows the dealer to track the vehicle.  If a consumer misses a payment then the device can shut the vehicle down until a payment is made.  If the consumer fails to make a payment the dealer uses the device to locate the vehicle and repossess it.   I believe these devices are one thing that is allowing these bad loans to become more prevalent. 

The Comedian Jon Oliver recently did a great piece on Auto Lending and how these sub-prime loans are affecting consumers.  The piece has some shocking statistics and stories of people being ripped off by Auto Lenders.  

If you or someone you know has been ripped off or scammed by an Auto Dealer, please call Jeremiah Ross.  Please call Ross Law LLC at 503.224.1658 .   Please remember there are some reputable and honest car dealers, and just because you have a questionable loan that does not mean the dealer broke any laws or you have a case against them.