One thing most people don’t realize is that auto repair is totally unlicensed and almost-totally unregulated in Oregon — anyone call call themselves a mechanic and open an auto repair shop, no questions asked by anybody, no proof of qualifications or required certifications needed.
The one repair shop law requires anyone who takes money for doing car repairs to give you a written estimate beforehand, and to update the written estimate as more problems are discovered. This law was passed because sleazy repair shops would give consumers a real low-ball estimate to get the car into the shop, disassemble it, and then lower the boom on the consumer once the car couldn’t be driven away.
However, even this law is essentially toothless, because there is no law that requires repair shops to buy an insurance bond to protect consumers. That means that, if you don’t get an estimate, or if your repair guy winds up leaving your car worse off than when you brought it in, you will have to sue for the damages, and there’s nothing saying that he will have any assets you can recover from if you win.
So the key with repair, as with purchases, is to prepare for battle at home, before you step onto the dealer’s lot or go to the repair shop. And if you live in an DEQ emissions-testing area, never buy a car on a weekend or after testing hours on weekdays — your test drive of the car (you do a test drive, right?) should be directly from the dealership to the DEQ test facility, where they will give you a free emissions check. Not a formal test, but a good indication if the car you are thinking about will fail or not.
One thing to always know about purchases at an Oregon car dealer’s lot: There is no 3-day right of rescission for a car purchase or lease, even if you do not yet have final approval of financing
Before You Go To The Dealer
Know the fair purchase price of the car you want. Edmunds and Kelley Blue Book are good resources to compare different cars and make an informed decision about which car (or cars) best suite you and how much you should expect to pay for them. The salesman will likely negotiate based on the sticker price, which may be higher than the fair purchase price.
Do the math. Before going to a dealer, calculate the total maximum price you can afford or want to spend for a vehicle, and then figure out what monthly payments fit that budget. People who go to dealers without such knowledge and negotiate based solely on what they can pay per month usually end up paying more over the life of the loan.
Research your financing options. Often the best rate on a new car is offered by the dealership when the manufacturer is offering special rates. If you are not looking to purchase a new car during a sales event or are looking to purchase a used car, check with your bank or credit union to determine the best rate available to you. Compare those rates to those offered when you visit the dealer. You may be able to pre-qualify with a bank or credit union to lock in a rate before you go to the dealer.
Know your score. Check your credit score before you go to a dealer to make sure you are aware of any shortcomings you may have. You can request your credit report for free once a year by visiting www.annualcreditreport.com, however you have to pay to see your credit score. Knowing your credit score will help you determine if you may be able to qualify for better financing. Learn more about building your credit score.
Choose a dealer that you can trust. Be Informed is an online tool for consumer to search DOJ’s database of consumer complaints to see if other people have contacted our consumer hotline with concerns about a business before they do business with them. Many customers also share their experiences with local businesses, both good and bad, by posting consumer reviews online.
Negotiating The Deal
Remember: Everything is negotiable. Never buy a car in a hurry. Be prepared to take as long as several weeks to find and negotiate the deal you want. Keep in mind that everything is on the table – no matter what the salesperson says. This includes:
· The price of the vehicle you are buying
· The trade-in value of your current vehicle
· Your financing options
· Insurance and service contracts
Do not negotiate on monthly payments alone. Make buying your new car, selling your old car, and financing your new car three separate transactions. This helps you understand exactly what you are paying for each step.
Get the best interest rate. Always ask the dealer if the interest rate being offered is the lowest rate he or she can offer and whether it includes a profit for the dealer. You may be able to pre-qualify with a bank or credit union to lock in a better rate before you go to the dealer.
Don’t lower your monthly payments by opting for a longer loan term. Lowering your monthly payments by adjusting the length of the loan may seem like a good idea at first, but it may cause you to pay thousands of dollars more in interest over the term of the loan. What’s more, vehicles begin to depreciate the moment they leave the lot and continue to do so every year after. The longer the term of the loan, the more likely it is for the value of the car to fall below the amount left on the loan. This creates “negative equity.” If you later decide to sell or trade-in a vehicle for which you owe more than it is worth, you will still be responsible for paying off the negative equity.
Beware the “numbers game.” Do not assume salespeople are your friends – no matter how friendly they may be. Their job is to sell you a car. Most are paid on a commission basis, so the more you spend the more money they make. This includes the person who goes through your financing options and final paperwork with you. They also get commission for selling additional products such as service contracts, add-ons and other services like credit life insurance. Many of these products have a very high profits margin.
Avoid the numbers game by making sure you understand the total cost of the vehicle and services being offered. If you just negotiate based on monthly payments, it is even easier to get tricked into paying more than you need to.
The Attorney General offers the following adivce to avoid losing at the numbers game:
· Take notes. Once you have agreed on a price with a dealer, make written notes of what the agreement is and stay alert. Make sure to include the cost of each item.
· Bring a calculator. Some dealers will try to change the deal later without you noticing. Compare the agreed-upon prices with the prices listed in the purchase agreement and make sure they add up to the same price before you sign anything. For example, you may think that you are getting a great deal on your trade-in, but in exchange the dealer may have increased your interest rate.
· Take someone with you. They can take notes while you ask questions. Two people are less likely to miss something.
· Do not believe a salesperson that tells you that additional products or services are free or included in the cost of the car. Pay close attention to the purchase agreement to verify there are no hidden charges or fees before you sign it.
· Be cautious about purchasing aftermarket add-ons or treatments offered by the dealer. Examine the cost and need for such extras and whether you can afford it. Some add-ons are unnecessary, or are significantly overpriced, and may greatly increase the price or cost of your overall financing.
· Ask to take a copy of the purchase agreement home with you. It is well within your rights to keep a copy of every document you sign – in its entirety.
Closing The Deal
At any point in the negotiations, be prepared to walk away. You have no obligation to sign a contract … especially if it is not on the same terms you thought you agreed on. After you have agreed on a deal with the sales department, you will be taken by the salesperson to the finance and insurance representative. If you are told that he or she will fill out the paperwork, watch out – in some dealerships the finance and insurance representative will try to change your agreement without you catching on.
Be very careful what you sign. Make sure that all promises made by the salesperson or dealership are in writing. If a contract has terms substantially different from what the salesperson initially promised, do not sign the contract unless you are willing to accept the new terms.
Take your time. Do not let anyone rush you to sign paperwork without reviewing the terms of the agreement. Read all documents and understand all terms before you commit to them.
Do not lie. Do not allow false information on any forms and beware a salesperson who suggests putting false information, such as a higher income or a larger down payment, on your finance application. While financing may be approved, the payments may be difficult for you to make. If something goes wrong, you will be held accountable for the false information.
Do not sign a blank contract or application. Do not sign anything that contains blank spaces – especially on any contracts or credit applications. Draw a line through all blanks on documents you sign.
Stick to the plan. Unless you have done comparison shopping with an insurance agent, try to resist buying life or disability insurance from a dealer. You cannot be required to buy other products, in order to finance or purchase a vehicle. Beware of a salesperson that tells you that you cannot be financed unless you purchase these products.
Get an expert opinion. If you are purchasing a used vehicle, have a trusted mechanic inspect the vehicle before you buy. This may cost around $100 or more, but could save you thousands in the long run.
Free DEQ Emissions Test. A used vehicle in good condition will still fail an emissions test if the exhaust sensors have been tampered with or disabled. If you visit a DEQ Clean Air Station during a test drive and ask for a “voluntary” test, you can receive a free emissions test before you close the deal.
Processing the paperwork. Dealers may charge up to $75.00 for processing your paperwork with DMV. Dealers may charge up to $100.00 for electronically processing your paperwork with DMV and providing you with a license plate at the time of sale. These are not government mandated fees, and are also negotiable prices. However, a dealer can refuse to sell you a vehicle if you do not want to pay either $75.00 or $100.00, the same as if you and the dealer do not agree on the price of any other term, such as the price of the vehicle.
You do not have to pay sales tax on any vehicle purchased in Oregon. If you are buying a car in another state, make sure the dealer fills out paperwork for Oregon residents so that you do not have to pay sales tax.
In Oregon, you can take a new or used car home before financing is approved. This practice is called “spot delivery” and is designed to lock you in to a purchase. If you are tempted to do this, take a moment to read up on the Yo Yo Scam before you drive off the lot in a car without approved financing. There is no 3-day right of rescission for a car purchase or lease, even if you do not yet have final approval of financing. However, if you cannot get financed at the exact same terms for which you signed an agreement, or if the financing is not completed within 14 days, you must bring the car back to the dealer and the dealer must give you back your trade-in vehicle and down payment.
Choosing an Auto Mechanic
Oregon consumers can follow a few basic guidelines when looking for an affordable, reliable auto mechanic.
Do your research. Ask friends and family for references, and look for a garage that services your specific make and model. Edmunds.com provides free, third party automotive information, tools and services for consumers.
You can also search Be Informed, DOJ’s online tool, to find out whether other consumers expressed concern about a particular mechanic. Many customers also share their experiences with local businesses, both good and bad, by posting consumer reviews online.
Check credentials. Look for indications of being certified by nationally recognized organizations such as the Automotive Service Excellence (ASE), or AAA approval. Although these endorsements do not always guarantee a mechanic is honest or does good work, it is an indication that the mechanic meets basic standards of knowledge and competence in motor vehicle repair.
Know your warranties. Ask if the repair shop offers a repair warranty on parts and labor, or if the parts come with a warranty.
Know your rights. Under Oregon law, vehicle repair shops must provide consumers with a written estimate for vehicle repair costs, and receive the owner’s approval based upon the written estimate, prior to repairing or tearing down their motor vehicle.
If you believe a mechanic has performed work on your vehicle without your authorization, or if you have any other grievance against an Oregon mechanic, file a complaint with the Attorney General’s Consumer Hotline or call 1-877-877-9392.
Credit Scores & Credit Reports
When it comes to your finances, your credit score (also known as FICO score) is very important. The higher your credit score, the more likely you are to have banks competing to offer you lower and lower interest rates when you apply for a loan. A bad credit score can make it very difficult to even qualify for a loan, let alone a low interest rate. Potential landlords, insurance companies, and utility providers such as cell phone carriers may also take your credit score into consideration before renting to, or doing business with you.
Several types of data are factored into your credit score. In general this data is grouped into five categories – each accounting for a certain percentage of what is factored into your credit score:
- Payment history – paying your bills regularly and on time will have a huge impact on your score.
- Amounts owed – the amount of debt you owe vs. the amount you have been approved to borrow from (your debt to credit ratio).
- Length of credit history – the length of time you have held your accounts. The longer you have held a line of credit the better.
- New credit – the number of recently opened accounts or credit inquiries. Opening new accounts can cause your score to drop slightly. Maintaining your accounts in good standing for a longer period of time will increase your score.
- Types of credit used – your score will be higher if you are able to responsibly juggle a variety of different types of accounts including credit cards, installment loans (like a car loan), mortgages and retail accounts.
Even for people with poor credit, improving your FICO score is possible, but you must be vigilant. Always pay your bills on time, pay down your debts and keep tabs on your credit report.
Credit reports. Check your credit report to make sure you are aware of what your shortcomings may be or to spot any inaccuracies that may be on it. You can request your credit report for free from each of three reporting bureaus every year by visiting www.annualcreditreport.com, however you will have to pay to see your credit score. There are other companies that offer credit reports, but will require you to buy a product or service before you can access your report.
Correcting errors on your report. Consumers have the right to challenge incorrect information contained in their reports. If you suspect an error your credit report, contact the credit reporting agency in writing and tell them what information you think is inaccurate. Submit paper copies (not originals) of any documents that support your position. If you do so, the credit reporting agency must investigate its accuracy. You may also dispute the information in question with your creditor. Notify your creditor in writing that you wish to dispute an item and be sure to include copies (again, not originals) of any supporting documentation. In either case, if the error is confirmed it must be removed from your credit report.
Identity theft. If you notice something strange on your credit report and suspect that you may have been a victim of identity theft, please contact the Department of Consumer and Business Services. More information is available on this site on how to protect your sensitive information and prevent identity theft from happening in the first place.