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WASHINGTON, Dec. 2, 1999 -- Six Philadelphia automobile
dealerships have signed agreements with the Federal Trade Commission to
end alleged practices of omitting or burying in fine print key cost
information in their vehicle lease and credit ads.
The settlement agreements, signed by Dunphy
Nissan, Inc., Norristown Automobile Co., Inc., Northeast
Auto Outlet, Inc., Pacifico Ardmore, Inc., Pacifico Ford,
Inc. and Marty Sussman Organization, Inc. will require these
dealerships and their owners to include clear and accurate cost
disclosures in their lease and credit ads to help consumers to make an
informed decision.
These agreements come shortly after a
$40,000 civil penalty was assessed against Suntrup Buick-Pontiac-GMC
Truck, Inc.; Suntrup Ford, Inc.; and Thomas Suntrup -- the
first such penalty for order violations obtained against an individual
auto dealer.
These settlements also follow closely the
settlement of Mazda Motor Corporation of America for allegedly
failing to comply with a Commission order and 24 similar state orders
requiring clear and conspicuous disclosure of advertised lease terms.
The Mazda settlement included the largest civil penalty ever assessed by
the FTC and required the company to pay a total of $5.25 million to the
Commission and the states.
"These enforcement actions represent
one more step in the FTC's continuing effort to clean up automobile
lease and credit advertising," Bureau of Consumer Protection
Director Jodie Bernstein said when today's agreement was
announced.
"Although much of the auto industry
has greatly improved their ads as a result of prior Commission
enforcement actions, the Philadelphia area dealers have not. They will
now, and consumers will have clear and accurate credit and lease
information in compliance with the law."
Consumer Education Information
on Vehicle Leasing
With the announcement of the action in this
matter, the FTC also reminds consumers of its educational material
available on the subject of vehicle leasing, all of which is
available on its web site at www.ftc.gov
or by calling the Consumer Response Center at 1-877-FTC-HELP.
This material includes the Consumer Alert "Look Before
You Lease," that contains detailed information on the difference
between leasing and buying a vehicle, factors to consider when
deciding whether leasing is the right option for you, and tips
to follow during the leasing process. Among these tips are:
Shop as if you are buying a vehicle.
Negotiate all the lease terms, including the price of the vehicle.
Lowering the lease price will help reduce your monthly payments. In
addition, get all the terms in writing;
Learn the language of leasing. The Alert
contains the definition of a wide range of terms, including: open-
and closed-end lease, lease inception fee, capitalized cost, and
capitalized cost reduction;
Ask whether extra charges will be
assessed for excessive mileage, wear and tear, disposition, or early
lease termination, and find out the amount of these charges. Check
out penalties for an early return, and expect to pay a substantial
charge if you give up the vehicle before the end of your lease;
Before you sign the deal, take a copy of
the contract home and review it carefully - away from any dealer
pressure. Be alert for any charges that were not disclosed at the
dealership, such as conveyance, disposition and preparation fees.
In addition, the Alert contains a worksheet
on Consumer Leasing Act disclosures to help consumers understand what
their total costs are likely to be with regard to a particular lease
arrangement. It also reminds consumers that federal law requires lessors
to provide lease cost information before the lease is signed. |
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