Rip-off motors

Duane Overholt is a pleasant-looking fellow, but just be glad that you probably never met him. While working at auto dealers in Florida, he estimates that he ripped off consumers for about $33 million. "And that’s a conservative estimate," he adds.

Overholt says he enjoyed the fruits of his scams, once blowing through $10,000 in a day during a visit to the Cayman Islands, then making back $4,000 by victimizing new car buyers the day he returned.

What do these unscrupulous dealers do to rip you off? How about charging you for the bumpers? A customer in Austin was told that bumpers are optional extras on pickup trucks. While they were at it, the thieves also charged her for clear coat and rust-proofing — two other things she didn’t ask for and didn’t need.

She might have gotten off easily, since a woman in Orlando spent nearly $5,000 on "handling" and other invisible fees, including a useless $895 insurance policy she never agreed to buy.

Many of the rip-off artists, "tin men" for our time, catch their prey through finance charges. A Peoria, Ariz., customer agreed to pay $278 a month for her new car, but the bottom line was raised four separate times after she was out the door, finally settling at $353. In Damon, Texas, Ginger Podojil questioned why she should pay $389 for something called a "dealer services fee," since it applied to benefits she couldn’t possibly use, and she was told that if she didn’t pay the fee she couldn’t have the car.

Dealers are inventive, so the range of "extras" customers get socked for includes roadside service agreements, window tints, rain protection, detailing, undercoating, stain guards (remember Scotchguard?), maintenance and upgrade packages. My friend was recently asked to buy "rain protection" for his Jaguar, and he responded, "Why, doesn’t it have windshield wipers?"

"Etching" deserves special mention. This is a dealer service that inscribes your car’s vehicle identification number on the windshield, supposedly as a theft deterrent. Why a crook who’s probably just going to dump your car after stripping a few parts and going for a joy ride will care about this, I’ve never been able to determine. A VIN number might help reunite you with your car after it’s been found, but federal law requires the VIN number to appear numerous places on the car, anyway.

Bobbie Steffen of Gaston, Ore., says she asked why she was being charged $600 for etching (which costs the dealer about $100), and promptly had the cost reduced to $300. She was told she couldn’t register her car unless it was etched.

Customers are routinely asked to sign blank paperwork, and then the backroom boys go to town tacking on exorbitant charges, fees and higher-than-agreed-to interest rates. "As you move up into management, you learn about the scams," says Overholt. "If you don’t rip off customers, you’ll lose your job."

All of this material is compiled from an enlightening report entitled "Rip-Off Nation: Auto Dealers Swindling of America," available free from Public Citizen at www.autodealerscam.org. We know about these practices because of Public Citizen’s investigation, and because remorseful former con artists like Overholt courageously came forward to rip the lid off.

Americans buy 16 million new cars each year, spending $650 million. And the bad apples really taint the whole barrel. "Although not every dealer is disreputable, it appears there is a widespread fraud going on, particularly on the back end of car deals," says Dateline NBC, which did its own report.

I’m driving the 2004 Toyota Prius hybrid this week. It’s an incredibly different experience, from the starting procedure to the novel key that unlocks the car automatically from your pocket. I’ve been averaging about 45 miles per gallon in mixed driving. More next week …