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American Morning
Interview with Rob Gentile
Aired June 25, 2002 - 07:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: You car buyers out there, some potentially bad news for you. Chances are you could have paid, overpaid for that new car or truck in your driveway, and you are not alone. Now, some states are suing car dealerships over hidden fees that cost consumers thousands of dollars for extras they don't know that they were buying or they don't want.
So how can you avoid getting ripped off? We have Rob Gentile from "Consumer Reports" with us here to help buyers beware -- Rob, good morning.
ROB GENTILE, "CONSUMER REPORTS": Good morning -- thank you.
KAGAN: You know, there are a lot of smug people out there this morning going, you know, I comparison shopped. I did all of that. I got a great price on my car. And they might not know that they were still ripped off at the car dealership.
GENTILE: Absolutely. Actually part of the key deal really to prevent getting ripped off is it actually occurs before you even stop foot into the dealer showroom.
KAGAN: Which is what?
GENTILE: Essentially, you know, be prepared. Make sure you do your research, determine what kind of options you want on your car, not only settle for the options, but also for the deal extras or dealer add-ons, and determine what you are comfortable in paying if you are interested in them.
KAGAN: And get familiar with that before you go into the dealership, and then it kind of becomes a whole other world...
GENTILE: Absolutely.
KAGAN: ... once you are there. We have some dos and don'ts that we put together to help the folks that are out there looking for a car or perhaps just got a car. First of all, dealer extras, they are overpriced. What's an example of something like that?
GENTILE: For example, I think one of the key and most popular items are extended warranties. Typically once you have settled on the price of the car, car dealers will ask you whether you are interested in buying extra protection. And this is warranty coverage. KAGAN: This happens not just with a car. This is when you are buying a new stereo or appliances, and they make it sound like, you know, in about six months, the thing is going to break, and you are going to want this. Do you really need it if you are buying something new?
GENTILE: Not necessarily. "Consumer Reports" actually always recommends that you generally focus on a reliable vehicle instead.
KAGAN: Ah.
GENTILE: Choose something that's reliable.
KAGAN: There is a novel concept.
GENTILE: Absolutely.
KAGAN: Just pick a good car.
GENTILE: And then you may not need that extended warranty if you do something like that. Also basic, you know, manufacturer warranties are becoming much more generous over time as well.
KAGAN: So but again, look into that before you go to the dealership and look into the car.
GENTILE: Right.
KAGAN: All right. We've talked about extended warranties. Let's move on to the next one, etching. Confession here, when I bought my car about three or four years ago, I fell for this one hook, line and sinker. They just made it sound like, well, if your car is ripped off, you are going to have this thing etched in your window, and it's going to help find your car.
GENTILE: Yes.
KAGAN: Yes. Bad idea.
GENTILE: Well, you actually you have -- even if it something that you might be, you know, considering, this option is there as well. There are actually many cases and many self-do-it, you know, do-it-yourself kits that you can purchase for under $100. It allows you to do the same thing for much less.
KAGAN: What do they usually charge for that?
GENTILE: It can be anywhere from a couple of a hundred dollars, I have see it up to $1,000.
(CROSSTALK)
KAGAN: Really? They hit me up for a couple of hundred dollars. You know what? My car also got ripped off after that. It didn't help find it. So stay away from the etching. Chemical protection, what is this? To protect the paint? GENTILE: Both to protect the exterior of the vehicle, the undercarriage, the paint, as well as the interior in terms of fabric protection.
KAGAN: Well, why wouldn't you want that? The kids are spilling apple juice in the back seat, or maybe you are in an area where they put salt on the roads. Why wouldn't you want that extra protection?
GENTILE: Generally you don't need it, because the manufacturer already includes a lot of the protection, both exterior and interior already. But ultimately if you do want that extra protection, again, there are many after-market products where it is a lot less -- for a lot less.
KAGAN: And you mentioned this, this goes back to your original point of go and be prepared. Comparison shop and haggle. Are you talking about the overall price?
GENTILE: Both. Actually the overall price as well as any of the dealer extras that you may be interested in.
KAGAN: You might want some of those extras.
GENTILE: Sure.
KAGAN: Just don't go pay the hundreds of thousands of dollars that they are trying to get for it.
GENTILE: We always recognize never settle on that first price you get. Always shop around and get at least two or three different quotes, both for the price of the car, as well as for financing and dealer extras.
KAGAN: Negotiate total purchase price. And this was a big one that I learned by reading your article, don't go in and say this is what I can afford a month. I want a car. I can afford $350 a month. Why is that a mistake?
GENTILE: Probably the biggest line people fall for actually.
KAGAN: Right.
GENTILE: And never answer how much do you want to pay per month? Instead, focus on the total price. The reason for doing that is that you end up negotiating a much better deal, because a monthly payment can be structured to suit your, you know, what you are able to afford, but it may not be your best possible deal.
KAGAN: Because and the numbers you used in the article, you might go in there and say, OK, I can afford 350 a month tops.
GENTILE: Right.
KAGAN: But it's possible you could have gotten that car for 270 a month. They go in the back room and like, you see the guy out front? He will pay up to 350. And so they pack it with extras. GENTILE: Exactly. That 350 may actually be based on the full MSRP in some cases, so their sticker price.
KAGAN: So they can see a sucker coming a mile away with that. And double check the contract. You might think that you have made all of the choices that you want, but when you see all the fine print and all of the numbers and everything, they really might have stuck some extras in there.
GENTILE: Absolutely. Like in any other contract, you always need to examine the contract thoroughly before you sign and before you put a down payment for that vehicle. We always recommend is ask for an itemized list of the purchase contract and review each item individually and ask for any clarifications if necessary.
KAGAN: Overall, why does it have to be so hard? It's not like that when you go buy a carton of milk at the market, or you know, even sometimes with a big purchase item like a house. Why is it that just the car industry in general, why does it have to be such a difficult purchase?
GENTILE: Yes, actually it doesn't have to be, and in many cases, it isn't, and really, if the consumer is prepared ahead of time. Again, the key is really going and doing your research and being prepared even before you step foot into that dealer showroom. Learn what the dealer paid and negotiate from there.
KAGAN: Just quickly, if someone is watching this morning, and they just bought a car, and they are like, oh, shoot, they got me there. Is there anything that they can do at this point?
GENTILE: Well, there is always buyer recourse, and depending, you'd have to check your local, you know, the state you are buying the vehicle in. But in many cases, you can void a contract for a period of up to three days if it comes to that point. But ultimately is make sure you thoroughly, you know, review the contract and don't settle or sign for anything until you are comfortable.
KAGAN: Absolutely. Rob Gentile from "Consumer Reports," thanks for helping us be smarter buyers out there.
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