National Independent Automobile Dealers CEO Shares Thoughts On Curbstoning
Posted on Thu, Dec 08, 2011
No one wants to get ripped off when they buy a used car. Countless individuals are getting ripped off by curbstoners everyday, and it’s not just the unsuspecting car buyer who gets the short end of the stick. Licensed car dealers also feel the brunt of this illegal and unscrupulous activity.
We caught up with the National Independent Automobile Dealers Association’s (NIADA) Chief Executive Officer, Mike Linn, and asked him a few questions about Curbstoning and what could be done to stop it.
Q: What is the NIADA’s stance on Curbstoning?
A: Curbstoning is a major problem for our members all over the country. It’s an even greater problem for consumers as well as each individual state in regards to a loss of sales tax revenue. The licensed dealer is missing legitimate sales and the consumer is left with no one to turn to in the case of a problem with the vehicle. It can also create a major problem with vehicle titles.
Q: What types of vehicle title problems occur as a result of Curbstoning?
A: A lot of the consumer complaints I get are complaints where liens are not paid. Therefore, it’s not a clean title. Without a clean title, the state will not register the vehicle.
Q: How does Curbstoning affect your members?
A: Lost sales! About 1/3 of all used vehicles sold in the United States each year are sold between individuals. The majority of these sales are related to Curbstoning. That equates to about 13 million vehicles each year…sales our legitimate dealers are missing! The balance of annual sales are split pretty evenly between independent and franchise dealers, so all dealers are affected.
Q: In your view, has Curbstoning activity increased or decreased in recent years? Why do you think that is?
A: I don’t know that Curbstoning is decreasing, but sales between individuals (casual sales) is going down and has been on a downward trend over the last few years. NIADA has had a major campaign going on for several years whereby we are advising consumers that buying from private individuals is not a safe proposition. You don’t know who you are buying from, you have no idea of the true condition of the vehicle and you have no recourse if there is a problem. Always buy from a licensed motor vehicle dealer!
Q: Do you think there’s a need for a national policy on Curbstoning?
A: A national policy is not going to help unless resources are dedicated to enforce such a policy.
Q: What changes in state or local legislation would be most helpful in preventing curbstoners from harming your members?
A: In almost every state, there are regulations which state that if an individual sells 5 or more vehicles per year, they must apply to the state for a dealer’s license. In some states, the number of sales is less than 5 per year. The problem is the enforcement of these regulations by the state. Some states are better than others, but overall, the problem with enforcement is state budgetary constraints. I’ve seen states enforce their regulations against curbstoners, but when taken to court, in many states, the violation comes with no fine or penalty to the curbstoner. States that have beefed-up their fines and penalties are beginning to cut down on the amount of infractions. All states need to follow suit!