Ever wonder why the deck is stacked in favor of the car dealer? Payola!

October 2017 Fourteen teams of National Independent Automobile Dealers Association’s (NIADA) dealers and industry partners took to Capitol Hill and met with more than 110 members of the Senate and House of Representatives.


NIADA wants:

TO GUT the Consumer Financial Protection Bureau;

REPEAL the CFPB’s arbitration rule (a measure that has already passed the House and is awaiting a vote in the Senate); and,

FIGHT THE BAN on sales of unsafe recalled vehicles.

CFPB has been the representative of YOU the CONSUMER and Banks and Car Dealers are angry that such a watchdog agency exists. They are targeting the CFPB to have Congress stop funding this important agency.

ARBITRATION  – CFPB has written a rule banning arbitration provisions in car sales contracts to address the problem of YOU being forced to give up your right to have your day in court – and have disputes resolved by arbitration companies. These arbitration companies are bought and paid for by the Car Dealers and Banks. Arbitration is bad for consumers.

UNSAFE VEHICLES  – Consumer groups are demanding safety recalls be completed before you buy a used vehicle. NIADA wants to continue selling unsafe vehicles to consumers with NO DISCLOSURE.

While you are busy with your everyday life, these Banks and Car Dealers are donating money to your legislators to pass laws that hurt you. Let your Representative know you support the CFPB and are against any effort to get rid of the little protection we consumers have.

How Much “Interest” Am I Being Charged For My Lease?

Calculating the Money Factor Rate

You need the following information to calculate the Money Factor on your lease:

Total Rent Charge

Lease Term in Months

Adjusted Cap Cost


The formula is: (Rent Charge/Lease Term)/(Adjusted Cap Cost + Residual)

 Assume that a dealer shows you a lease contract with the following information:

Total Rent Charge = $5,000

Lease Term in Months = 48 months

Adjusted Cap Cost = $31,000

Residual = $14,000


Money Factor = (Rent Charge/Lease Term)/(Adjusted Cap Cost + Residual)

Money Factor = (5,000/48)/(31,000 + 14,000)

Money Factor = .00231


To determine the equivalent Interest Rate = Money Factor * 2400

Interest Rate = .00231 * 2400

Interest Rate = 5.544%

Truth In Lending

You have the right to have the dealer disclose to you in writing, ALL of the finance terms of your purchase BEFORE you agree to buy a car – and then you are able to walk out with the written disclosure and compare financing rates. Then you may return to purchase the car.

The Truth in Lending Act

15 USC §1601

(a) Informed use of credit The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him….

More Dirty Dealer Tricks – Not Getting the Advertised Price

I am posting this because this issue has come up several times in the last week.

The scam works like this: You go into a dealership and pick out a car you are interested in. The salesperson soon realizes you do not know the car is an advertised special. So, as soon as she realizes it, she goes onto the computer and changes the price to match she is quoting you.

The law states you are entitled to the sales price even if you are unaware of the advertised price. To protect yourself, ask the dealer if the car is being advertised and at what price. Then Google® the VIN and check for yourself and/or go to the dealer’s website and look up the car.

Also, a good place to check is Craigslist® as Craigslist® ads seem to disappear almost immediately.

Remember- the dealer cannot charge you more than the advertised price because she says “You do not qualify” because of your credit. They do this to add bank fees, etc.


Good luck.