Honda fined 24 Million

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VNTS

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on the news, guess they got bagged for corruption on financing, overcharging 200-250$ per customer with racial profiling.

http://money.cnn.com/2015/07/14/news/companies/honda-lending-discrimination/index.html

Honda seems to do these illegal practices, in the 90's their VP of marketing and NE dealerships were convicted of illegal kickbacks for allocations, basically dealers were giving kickbacks to US honda to get cars and passing the costs to suckers stupid enough to pay the illegal mark ups.
 
Hmm wonder if there's any correlation to price charged and credit rating. Better credit ratings get better loan rates so perhaps this is a similar situation.
 
I think this has much more to do with credit than it does with discrimination. Dealers attempt to mark up interest rates on every deal they can. The customers with better credit tend to also be better negotiators. The buyers with poor credit are more focused on whether or not they can get approved for a loan and do not focus as much on the terms of the loan. At least that seemed to be the case a few years ago when I was in the car business.
 
I might buy that until you throw the Asian demographic in.
 
Originally Posted By: fisher83
I think this has much more to do with credit than it does with discrimination. Dealers attempt to mark up interest rates on every deal they can. The customers with better credit tend to also be better negotiators. The buyers with poor credit are more focused on whether or not they can get approved for a loan and do not focus as much on the terms of the loan. At least that seemed to be the case a few years ago when I was in the car business.


That's how it was when I was in the business too. I sold Hondas at two Honda dealerships. People with bad credit were called by management and staff credit criminals. Typically they only cared about getting an approval and driving. Their rate didn't matter, what mattered was getting into a car. They typically were financed outside of Honda thru banks that specialized in financing people with bad credit. Trust me they were in arrears with just about everyone. Typically they weren't good negotiators. To say Honda is discriminating is wrong, VW Nissan, Kia, GM, Ford etc. dealerships did the exact same thing.

People with good credit got good rates, unless they were stupid. Most knew their credit score, shopped rates, and then told the F&I manager they'd finance with the dealership only if the dealer could beat the rates the customers got on their own.
 
It's hard for me to go along with a tale that their entire network of dealers, who were allowed to mark up rates, routinely and consistently turned the screws on some racial profiles vs. others. For one thing, I don't think that any organization could pull that off without someone singing (disgruntled employee, etc). Second, I'm not sure what they have to gain from it from a business perspective.
 
Honda agreed to the settlement so there is something to the allegation. Honda thought it was worth while to pay up and not go to trial.
Because another dealer or manufacturer does it is not an excuse.
 
Originally Posted By: thrace
Honda agreed to the settlement so there is something to the allegation. Honda thought it was worth while to pay up and not go to trial.
Because another dealer or manufacturer does it is not an excuse.


Good point, then the other mfgs. should be called out as well. It would be a great way to generate revenue for Uncle Sam.
 
Has anybody ever heard of a dealership that wont charge you more money if they get the chance? They got the nickname stealerships for a reason.
 
Up here in the Midwest every stealership SWEARS the transport/rail fee (cost to get the car there from port) is a MUST pay line item.

Now there are those here who swear that NO, you don't have to pay that and it is illegal charge. Truth be told, I've never seen it erased for anyone, ever. Not even in a lose-lose way such as saying " ok $0 transport fee but price goes up by that same amount". Not even that switchero. Flat out "you must pay the transport fee" and it must be a separate line item.

Perhaps it works in other states. But not up here, must be a sellers market here. You'd never end up with a new car by refusing to pay it. Never.
 
Originally Posted By: SumpChump
Now there are those here who swear that NO, you don't have to pay that and it is illegal charge. Truth be told, I've never seen it erased for anyone, ever. Not even in a lose-lose way such as saying " ok $0 transport fee but price goes up by that same amount". Not even that switchero. Flat out "you must pay the transport fee" and it must be a separate line item.


When I buy vehicles, I don't pay a documentation fee, even though that $399 is already hard-coded into the paperwork. I tell them, I'm not paying you to do the paperwork to sell me the vehicle. "But sir, I can't take that off; it's right here on the form!"

They have to go back to their manager to get his agreement to lower the price by $399, so they can then charge me the $399 doc fee. "Whatever floats your boat!"

I guess it depends on how hungry they are for a sale.
 
Yep, sellers market up here in the semi-rural parts. (Cities of 40-50k with 1 dealership of each make and competing dealership 1&1/2 to 3 hours away)

However the trade off in going to a bigger city with more dealers of the same manufacturer is that they are busier and tend to be more arses/pull little changes in documents after the fact. Or do revenge pings on credit which are your job to miraculously uncover to begin the prosecution.
 
What is it with Honda and underhanded dealings? Remember it was Rick Hendrick who got in a boodle of trouble by trying to keep a NH Acura dealer away from inventory to sell. Yet Honda is one of the best loved carmakers ever.Goes to show that doing the "wrong thing" has nothing to do with customer satisfaction.What they don't know...wont hurt them...
 
Originally Posted By: VNTS
on the news, guess they got bagged for corruption on financing, overcharging 200-250$ per customer with racial profiling.

http://money.cnn.com/2015/07/14/news/companies/honda-lending-discrimination/index.html

Honda seems to do these illegal practices, in the 90's their VP of marketing and NE dealerships were convicted of illegal kickbacks for allocations, basically dealers were giving kickbacks to US Honda to get cars and passing the costs to suckers stupid enough to pay the illegal mark ups.

Honda company didn't do these illegal things. Some of the Honda executives took bribes from dealers to allocate more hot selling cars in the 80's and 90's.

Those executives had millions dollars kickback hidden in attic, Honda as company didn't get a penny from those kickbacks.

Dealers are independent business, they can mark up any products by any amount and it is allowed by Federal and States laws. Remember, MSRP is "Manufacture Suggest Retail Price". Actually, manufacture is not allowed to demand dealers to not add markup(s) on any product, be it a vehicle or part.
 
American Honda Corp. didn't pay any penalty, the $24 million is paid to a fund for car buyers who were overcharged, and $1 million for a consumer-education effort.

The Wall Street Journal article is more balance than CNN.

http://www.wsj.com/articles/honda-financ...ions-1436902348

Quote:
"Bill Fox, chairman of the National Automobile Dealers Association said the Honda settlement “will hamstring the ability of thousands of consumers to negotiate lower interest rates with their local auto dealership. This enforcement action artificially constrains the right of consumers to benefit from interest rate reductions of up to 1% of the APR on their next auto loan.”"
 
Exactly,

I could care less if they called it a blue moon charge. I agree on the bottom line figure. How they adjusted all the numbers above the bottom line is of little consequence to me.

If I say I'll write a 20K check for that car out the door, that's what it means.

If they try to add on other fees, they get one chance to correct their "honest mistake" or I'm out the door, without a car.

And as others have said, go in with financing pre-approved and it's hard to get ripped off.

Originally Posted By: Hokiefyd
Originally Posted By: SumpChump
Now there are those here who swear that NO, you don't have to pay that and it is illegal charge. Truth be told, I've never seen it erased for anyone, ever. Not even in a lose-lose way such as saying " ok $0 transport fee but price goes up by that same amount". Not even that switchero. Flat out "you must pay the transport fee" and it must be a separate line item.


When I buy vehicles, I don't pay a documentation fee, even though that $399 is already hard-coded into the paperwork. I tell them, I'm not paying you to do the paperwork to sell me the vehicle. "But sir, I can't take that off; it's right here on the form!"

They have to go back to their manager to get his agreement to lower the price by $399, so they can then charge me the $399 doc fee. "Whatever floats your boat!"

I guess it depends on how hungry they are for a sale.
 
People with bad credit only care about the payment and getting a car.

Dealers play this game all the time. When I ordered my truck they said they would give me a loan at 1.99% or 0% and I wouldn't get a rebate. Since I don't plan on keeping the loan that long I went for the 1.99% and $500 rebate.

When I took delivery all of a sudden it was 2.99% and I told the finance guy no thanks, I'll just get a loan threw a bank I do a lot of business with instead. He called back 10 minutes later and magically I was back at 1.99...
 
Originally Posted By: hattaresguy
People with bad credit only care about the payment and getting a car.

Dealers play this game all the time. When I ordered my truck they said they would give me a loan at 1.99% or 0% and I wouldn't get a rebate. Since I don't plan on keeping the loan that long I went for the 1.99% and $500 rebate.

When I took delivery all of a sudden it was 2.99% and I told the finance guy no thanks, I'll just get a loan threw a bank I do a lot of business with instead. He called back 10 minutes later and magically I was back at 1.99...

Smart move, or mention paying cash and you'll really send him into a tailspin.
 
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