Other LanguagesHere is another important lesson to remember when buying a car – beware of “packing” or “loading.” “Packing” or “loading” payments is a practice used in the auto industry to get consumers to pay for additional products, such as warranties or service contracts by hiding the costs, or not revealing that consumers were not required to purchase these additional items.
On Aug. 20, the Oregon State Attorney General reached a settlement agreement of $100,000 with a Salem car dealership. Investigative staff found that the company was “packing” contracts with aftermarket products in almost every car sold. Customers were not told they didn’t have to purchase the products with the car. The company hid the extra costs under a program entitled “Pride of Ownership.” Customers were charged for service warranties, security products, insurance and a gas-saving device called a Vortex Fuel Maximizer (which ultimately proves useless).
"We cannot over emphasize the importance of carefully reading the contract before signing for the purchase of an automobile," Oregon Attorney General Hardy Myers said. "Consumers should understand exactly what they are buying and for how much and make sure that no additional products were added to the price without their authorization."
Here are some tips to avoid a “packed” payment on your next car purchase:
- Beware of the dealer who tries to focus on monthly payments. Payment quotes can be manipulated to hide the costs of extra terms and services.
- Listen for key phrases, “It’s included!” or “It’s provided at no extra charge!”
- Check the purchase agreement and loan documents carefully to make sure that only the products you agreed to buy are included.
- Obtain an amortization schedule. Make sure payments quoted aren’t higher than what is needed to cover the purchase price of the vehicle and products you have agreed to buy.
For more helpful information on buying cars, visit /ConsumerIssues/Cars.aspx.