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-   -   BBB Arbitration Agreement for new car purchase? (http://www.early-retirement.org/forums/f28/bbb-arbitration-agreement-for-new-car-purchase-57103.html)

ERD50 07-26-2011 12:13 PM

BBB Arbitration Agreement for new car purchase?
 
Question on these Arbitration Agreements - I've negotiated two car purchases for the family this year, had not bought a car at a dealer for ~ 11 years prior. The car we bought last January, towards the end of signing papers, the guy hands me this paper saying I agree to arbitration with the BBB, and I pay the first $100 in fees. I say "Why would I sign this?", he says everyone signs it, blah-blah, I say he can't use that line anymore, and I would need my lawyer to look at it first, and he backs down, but acted like I was from outer-space for questioning this.

So since he backed down, I forgot about this on our recent purchase. So we get to the end, and (different dealer) he hands me that same form. I decline, but he's playing hard - boss won't let them sell the car w/o it, blah-blah. If I don't sign, I can walk away. Well, as you know this is a bad time for negotiating on cars - the Japan earthquake has dried up inventory, the car DD wanted was between 2011 being out of stock and 2012 just coming in (bad for us to negotiate all around), but awkward for us to wait. So I caved and signed. Sigh.

On principal, I don't want to sign away my rights, esp when the arbitration firm is chosen by the other party (and I assume they pay dues to belong to BBB?). I do plan on asking up front before the next purchase. It's unlikely I would ever need to sue a dealer, never had the need before, but signing away my rights makes me gristle. I know we do it with most brokers/NYSE, I don't like that either, but do I have a choice?

I found this write up in another credit union newsletter:

Quote:

Auto Contracts Requiring Mandatory Binding Arbitration Limit Consumer Rights - Corning Credit Union - StraightTalk

Ask a dealership in advance if they require a mandatory binding arbitration agreement. If they require one, and if you don't want to sign it, tell the dealer your decision, and stick to it. If the dealership wants your business badly enough, they won't make you sign the agreement.
They make the interesting point that dealers fought against arbitration agreements with the manufacturers. Goose/gander?

Anyhow, anyone had experience with this? How easy to say upfront that you won't sign? Any problems with the BBB being biased?

-ERD50

MasterBlaster 07-26-2011 12:26 PM

Look at it from their point of view.

This is what we have come to. Everybody sues, so the lawyers run things now.

I suspect that whatever profit they stand to make on your deal is dwarfed by very expensive potential litigation.

They may not want your business without an arbitration agreement.

ERD50 07-26-2011 03:55 PM

Oh, I understand it from their point. What I don't understand is why everyone would be so agreeable to sign away their rights, for nothing in return.

I looked back in my older folders, and I didn't see any such agreement for the cars I bought ~ 11 years ago, and as I said, I declined to sign it for one in January of this year, and they sold the car to me.

I'm trying to find out how common these agreements are, and how successful people are at declining them. It's a little hard to google, as the BBB seems to be involved in the 'Lemon Laws' in many states.

edit/add: I just tried the google terms [ new car "arbitration agreement" ] and I seem to be getting better hits.

-ERD50

Texas Proud 07-26-2011 04:58 PM

I would have said 'thank you very much' and gotten up to leave...

When I have talked about price etc., I always say that I will not pay any fees that are not required by law... period... you either put it in the sales price or not, but don't spring it on me at the last minute "Oh, BTW we have a $399 make ready fee and it is mandatory"...

I think the article you linked said it best.... it protects them and not you... IOW, the likelyhood of a big loss in arbitration is slim... they might have to buy the car back, but that would probably happen in any other situation.... and it costs them less to handle an arbitration than a court appearance...


How does you state lemon law read? Does it bar this manadatory arbitration? Or are you now stuck no matter what???

Pete44 07-26-2011 10:25 PM

The Better Business Bureau is worse than useless as a source of honest information for consumers. The BBB is there to protect BUSINESS, not the consumer. Want your business to get a high rating from the BBB? Just join.

ERD50 07-26-2011 10:44 PM

Quote:

Originally Posted by Texas Proud (Post 1092778)
I would have said 'thank you very much' and gotten up to leave...

I essentially did that in January, and I got the car. This time there were factors that made it a bit more difficult for me to just walk away at that point, and I figured the odds of actually needing any sort of arbitration was very low, so I bit the bullet. But I plan to avoid it next time.


Quote:

How does you state lemon law read? Does it bar this manadatory arbitration? Or are you now stuck no matter what???
Lemon Law falls under a different process altogether. There is an arbitration process, but you can go to court after if not satisfied.

-ERD50

Texas Proud 07-27-2011 09:32 AM

Quote:

Originally Posted by ERD50 (Post 1092925)
I essentially did that in January, and I got the car. This time there were factors that made it a bit more difficult for me to just walk away at that point, and I figured the odds of actually needing any sort of arbitration was very low, so I bit the bullet. But I plan to avoid it next time.




Lemon Law falls under a different process altogether. There is an arbitration process, but you can go to court after if not satisfied.

-ERD50


I agree that the likelyhood of needing to do something is very very small... so you are right that it is a 'who cares' matter... I just don't like to be tied down if I can avoid it... and to me it shows an attitude of the dealership that they are willing to screw you than the limitation of the arbitration... I can not see any scenario where I would be taking them to court with all the cost etc.

Good to know that lemon laws do not fall under this... to me that is the real protection... if you get a lemon, you want to be able to get something back on it...

So, in the end it is probably a non-issue....

packrat44 07-27-2011 04:34 PM

Quote:

Originally Posted by ERD50 (Post 1092651)
I say "Why would I sign this?", he says everyone signs it, blah-blah, I say he can't use that line anymore, and I would need my lawyer to look at it first, and he backs down, but acted like I was from outer-space for questioning this.

-ERD50

When looking to purchase a new Honda Accord EX last month I told the saleman I wanted a manual transmission. He told me nobody buys manual transmissions. I told him I did not appreciate being called a nobody and purchased from another dealership for more than $3k under MSRP.


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