"Bait, switch" -- Understanding some auto selling practices
By , 460th Space Wing Legal Office
/ Published December 19, 2007
BUCKLEY AIR FORCE BASE, Colo. -- The "bait and switch" takes many forms, such as false advertising, low-balling or falsifying information so beware of this practice when purchasing and financing a car.
Many consumers may respond to a specific advertisement but will not get the car on the credit terms that were advertised. If this happens, locating the ad is the quickest way to develop the case and show the "bait and switch." The victim should also check if the state has a false advertising statute. This will supplement other claims and usually allows for statutory damages.
Other times, the "bait and switch" may be on the price of a trade-in -- a practice called "low-balling." After a deal is struck, the dealer suddenly realizes the trade-in was overvalued, and he needs more money to close the deal. The finance managers will then sell additional products with the car. These sales techniques are designed to sell finance-related products whether the consumer wants them or not.
Another type of "bait and switch" is where the consumer thinks he or she is entering into a legitimate transaction, but the dealer is instead falsifying information about the credit side of the deal. The dealer does this so that the dealer can sell the credit contract for more money to an assignee. Sometimes, the assignee will be involved in the falsifications. A good example of this is Knapp v. Americancredit Financial Services, where the summary judgment opinion details how the finance company was helping the dealer falsify documents to make the consumer appear more credit-worthy.
For legal assistance contact the 460th Space Wing Legal Office at 720-847-6444.