It's the time of year when the pundits look ahead, which is why now is an opportune time for a list of resolutions for the used car industry to improve the used car buying experience for consumers.
Drop the use of certified pre-owned by non-franchise dealers. This comes about in light of Volkswagen adopting a certified pre-owned program for non-VW vehicles it dealers sell. A better name would be Warrantied Used Vehicles because the average consumer thinks any vehicle called certified pre-owned is backed up by a manufacturer warranty. That's not the case with any vehicle sold by a dealership that does not have a relationship with a vehicle manufacturer (i.e. a Dodge being sold at a Toyota dealership).
Revamp the Buy-Here, Pay-Here industry. It really shudders for me to admit this but California is on the right track with its regulated changes to the Buy-Here, Pay-Here industry, which serves the lower-income and uncreditworthy segments of society. The state made changes to the law for better consumer protection on how payments can be made and when cars can be repossessed. Also, wisely, no limits were put in place on interest rates that can be charged. It's nice to see the free market was not tampered with by government regulation.
More transparency in auto loans. A report by the The Center for Responsible Lending finds that dealers routinely charge consumers 1% or 2% higher on loans than necessary. That costs consumers billions of dollars a year in higher payments. Dealers will be averse to cutting back this profit center but it's the right thing to do to let customers know what they qualify for truthfully.
Consumers need to be better informed. Caveat emptor has been around since the Roman days. Consumers need to be better researched on all aspects of buying a used car - not just the price. They need to take time to be better informed on finance rates, warranties, reliability and similar issues. All they have to gain is saving money and buying reliable transportation.
Clean up those sales listings. Probably nothing is more frustrating to a consumer than searching for a used car, finding a car of interest through an online search, and then discovering the car is no longer available. It's a form of bait-and-switch for many dealers and, frankly, in some cases, it's just bad website maintenance by other dealers.
Federal salvage title laws need to be passed. I'm not for big government but something needs to be done to make the salvage title laws consistent from state to state. Used cars are more and more an interstate commerce item. After Hurricane Sandy, used car dealers brought in vehicles from as far away as California to the Northeast to replenish supplies wiped out by the storm. The problem is California salvage laws are much different from states in the Northeast. Consumers were open to potential fraud on a wide scale because what's a salvage vehicle in one state may be acceptable for sale in another. This will help consumers avoid being targeted by scam artists.
Better used car recall compliance. This is more for consumers but something needs to be done about the fact that a fair share of consumers ignore recall notices. They are in place for a reason and the work needs to be done for safety reasons. An effective system needs to be put in place that rewards consumers for getting the work done in a timely manner. Also, consumers buying a used car should be able to find out easily, say by simply entering a vehicle identification number or VIN, to see if a used car has been subject to recall. The info is available at sites like CarFax.com and AutoCheck.com but the information should be free.
An end to curbstoners. Curbstoners are folks who pretend to be private sellers but who are actually dishonest used car dealers who want to avoid complying with state and federal used car laws. They can be found advertising on sites like craigslist. By working outside the law they afford absolutely no consumer protections. Federal and state authorities have to commit to cracking down on them.
That's my list of used car resolutions for 2013. Do you have any you want to add? Feel free to comment.