SEPTEMBER 15, 1999
Tart 2: "Buying a Car
Legal service available to all members and staff
By Gayle Patterson
Lisa needed a car. She had just got a
job in another town 20 miles from where
she lived. She had been unemployed for
eight months. The old car she had been
driving was falling apart and the engine
was shot. It would never be reliable for a
40-mile daily commute, and she wanted
to be sure she would be able to favorably
impress her new employer by being at
work every day on time, without excuses.
She knew that her credit rating was
poor. Lisa couldn't afford a new car, and
thought she wasn't quite ready to buy
yet. One sunny Sunday Lisa decided to
go to Fast Freddie's Used Car Lot in the
town where she lived, not to buy be
cause she had no idea what kind of car
she wanted but to look around. Be
sides, her driver's license had lapsed and
she wanted to get it renewed first.
Lisa went to Fast Freddie's alone, and
was impressed when Freddie himself, a
friendly soft-spoken guy not at all the
image of a high-pressure salesman. He
took a lot of time with her to find out
why she needed a car, and what she
needed. He found out that her credit was
in shambles, but he agreed with her that,
with her new job all that was behind her.
Besides, Fast Freddie would give credit to
anyone the law allowed, and she looked
like a law abiding citizen to him.
Freddie knew just the car she needed.
Lisa saw it and loved it. It was shiny red
and when he raised the hood, even though
she didn't know what she should be look
ing for, she noticed the engine was very
clean. That must mean the engine had
been well taken care of by its previous
owner, didn't it?
He would give her a special low price
on the car just because she was such a
nice person. Lisa explained that she wasn't
ready to buy just then, she only had $600
dollars in cash. Freddie told her not to
wait. He expected that the shiny red car,
which anyone could see was such an un
usual value, would be sold to someone
else before the day was over. Freddie in
vited her to sit in his little cubicle and
he would explain to her how she could
buy the car right now, before someone
else bought it. He had her fill out lots of
paperwork; talking to her continually as
she tried to read the documents. The
blanks in one document were not filled
in. Freddie suggested Lisa sign them any
way, because as soon as he "checked the
computer" to make sure she qualified for
their special financing package, and as
soon as she brought in the title to her
old vehicle which she wanted to trade in,
all the blanks would be filled in and all
her paperwork would be completed then.
He could not tell her at that moment
what her interest rate would be, or her
monthly payments, or how much she
would get for her old car, but the com
pleted contract, Freddie said, would ac
curately reflect the verbal agreements
they had made. And, oh yes, Freddie said,
she would certainly want to get credit
life and disability insurance to pay for
the car if something happened to her.
Additionally, because they were sell
ing the car to her at such a low price, she
had to sign documents that said she was
buying the car "As Is," but she could ig
nore that because Freddie stood behind
every car he sold and they would take
care of any problems she had for 90 days,
even though they didn't legally have to.
She could even write them a post-dated
check, and they would hold the check
until the money was actually in her bank
account. Four hours after going on the
car lot "just to look," Lisa drove the shiny
red car home. She felt so lucky.
Two weeks later, Lisa got her completed
paperwork in the mail. She was shocked.
The $300 a month payment she thought
they had agreed on was now $560. The
interest rate on the $8,000 she had fi
nanced was a whopping 45. Also, they
had credited her with only $500 on her
trade-in. She was sure her old car was
worth at least four times that much.
Worse yet, she had already been late for
work twice because her red car had bro
ken down. Her boyfriend told her it was
because the transmission was shot. She
was worried.
Well, she would go to Freddies' imme
diately. Freddie would certainly cancel
the contract and give her money back
when she told him about the transmis
sion. He was so understanding. Lisa took
the car back to Freddie's and complained
bitterly about the car.
Freddie refused to repair the car, say
ing it would cost too much. Besides,
didn't she see the big block letters saying
she bought "AS IS" in her sales contract?
Lisa reminded him of his verbal promise
to make all necessary repairs within 90
days of the sale. Freddie said, "What
promise?" She also said she thought the
interest rate was too high. Too bad,
Freddie said, we can charge any interest
rate we like.
Lisa then tried to take the shiny red
car back home. Freddie refused to give
her the keys. He said he had just found
out that she did not qualify for financ
ing because she didn't have a valid driver's
license. "Read your credit application,"
he said. "You lied to us. You said you
were a licensed driver. We won't give you
the car, and we're going to cancel your
credit insurance too." Lisa demanded her
$2,600 down payment back. Freddie said,
"No way, and you still owe me $8,000
under the contract." Lisa threatened to
put a "stop payment" on the check.
Freddie said if you do, I can have you
arrested, and I'll sue you. Lisa really got
upset and started yelling at Freddie.
Freddie called the police. The police made
Lisa leave. As she walked home, she
promised herself that the first thing she
would do is call a lawyer.
If a contract to sell a car says you are buying the car "As Is," you have no right
to expect repairs from the seller, even if the car breaks down a half a block after
you drive it off the car lot. Oregon does not have a "lemon law" for used cars,
only for new ones. So, no matter how defective the used car you bought may be,
you can not hold the used car lot responsible unless you have a warranty agree
ment. Many times used car dealers will charge you hundreds of dollars extra if
you want a warranty. This will increase your monthly payments.
In Lisa's case, Freddie indeed kept the cost of the car at $300 a month, but by
the time she agreed to purchase credit insurance and other "financial services,"
her desired monthly payment almost doubled. The interest Lisa was charged was
scandalously high, but not illegal.
If she had not signed a contract with blanks or if she had not gone alone to
purchase the car, she might have had a witness to the blanks, and also someone
who could have reminded her she had only come to look, not buy, and her emo
tions would not have driven her into this unfortunate transaction.
T Decide what you want to buy before you go to a car lot. Know the year,
VJ' make, and model of the car, and what you are willing to pay for it before
you set foot on a car lot.
Go to the library and ask for the latest Consumer Reports Used Car Buying
Guide. This Guide will help you decide whether to buy a used car or invest
in repairs of your old car. It will tell you where to shop and how. It gives you a
checklist you can take with you. Other Consumer Reports publications will help
you choose the best used car in your price range.
Do not step on a car lot until you are in a financial position to buy. It is
V2r best to be pre-approved for your car loan from a bank or credit union.
JT If a car dealer will not tell you their interest rate up front, walk out the
door. Even though "low monthly payments" may be promised, finance
charges are not trivial. A five-year, $20,000 car loan at 9 will cost almost
$5,000 in interest. You can imagine the interest costs at 45.
Do not buy cars over the Internet. Most of the computer-based used car
sites are just classified ads broken down geographically. Cars should not
be purchased without being driven and mechanically inspected first. If you do
not do this, you will lose many of your legal rights to complain if the car does
not work.
Do not use credit cards to buy a car. The credit limits are too low to get a
good car, and interest rates are too high. Some people tend to buy more
"financing services" and other things they do not need when they use a charge
card.
Do not go alone to buy a car, and do not take children with you. Alone
you are vulnerable to sales pitches and runaway emotions. With children,
you are distracted.
Legal Services offices are all over the state. You can call your nearest office
for assistance with a consumer problem. Be sure and tell them you are a Grand
Ronde member when you call. If you need assistance your nearest office cannot
give you, call the main office of Grand Ronde Legal Services in McMinnville.
PROTECT YOURSELF. BE A WISE CONSUMER.
ALBANY OFFICE
541-926-8678
800-817-4605
BEND OFFICE
541-385-6944
800-678-6944
GRANTS PASS
OFFICE
541-476-1058
HILLSBORO OFFICE
503-648-7163
NEWPORT OFFICE
541-265-5305
800-222-3884
MCMINNVILLE OFFICE
503-472-9561
800-781-8500
OREGON CITY OFFICE
503-655-2518
PORTLAND OFFICE
503-224-4086
PENDLETON OFFICE
541-276-6685
800-843-1115
ROSEBURG OFFICE
541-673-1181
WOODBURN OFFICE
503-981-5291
Fundus camera
Continued from front page
helping people maintain vision and
a high standard of living, by early
diagnosis and routine exams.
Tom Austin, health director for the
Center said, though grateful to re
ceive the opportunity to better serve
clinic clients "...there's no rejoicing
in the community because we have
a diabetes grant. Diabetes is genetic,
it's not a disease and it's not curable."
The grant, written by staff mem
ber Bob McElderry, is closing the dis
tance between the diabetes and its
victims. McElderry says of the Fun
dus Camera, "I understand it has
been able to detect a few cases, one
of them in a fairly young person
that other wise wouldn't have been
detected in a long time. That's what
I get out of it, that's my reward."
Strong in Body and Spirit
Question: What is it?
Answer: Hopefully we all feel strong
in body and spirit when we are liv
ing in a healthy way. "Strong in
Body and Spirit" is also the title of a
pilot program that helps people learn
prevention and control of diabetes.
This project, designed by Native
Americans, aims to impact the entire
community by training people how
to eat less sugar, less fat, exercise
more, and maintain these healthy
lifestyle habits. Anyone who has dia
betes or is at high risk for diabetes is
invited to participate in the five ses
sion course. Sessions are slated to
begin in October. Watch for more
information next month or contact
Marline Groshong, RN and Diabe
tes Coordinator.