Will you make a common mistake?

SCHOFIELD BARRACKS, Hawaii (Dec. 20, 2013) -- So you've made your list and checked it twice, trying to figure out who gets a sparkly necklace and who gets a big bag of rice.

OK, so maybe your idea of holiday shopping doesn't involve a trip to the nearest grocery store, but that doesn't mean you have to rack up the credit card bills in the hunt for the perfect present, either.

According to the National Retail Federation, American consumers are expected to spend $602.1 billion this holiday season, an increase of about 3.9 percent from last year. The retail trade association adds that the 61 days between November-December is the biggest time of year for retailers of all shapes and sizes and can account for as much as 20-40 percent of retailer's annual sales.

Before you get too wrapped up in the gift-giving spirit and succumb to all those tidings of good cheer, curb your spending spree.

According to the most recent U.S. Better Business Bureau statistics, new car dealer complaints are the second most common consumer problem; used car dealer complaints are not far behind as the sixth most common consumer issue.

Unfortunately, Soldiers are frequently victims of dishonest sales associates.

"Service members, veterans and their families are attractive targets for good and bad lenders because they are often young, have a steady income. Many lenders know the UCMJ (Uniform Code of Military Justice) requires you to have good financial practices, and you are easy to find and target for marketing due to your geographic location," said Capt. Sean Mahoney, chief of Legal Assistance, 25th Infantry Division and U.S. Army Garrison-Hawaii.

Below are the most common scams and how to prevent falling into their traps.

Bait and Switch. The bait and switch scam happens when a Soldier responds to an advertisement for a vehicle, price or interest rate that is not really available. The Soldier then ends up buying a different, usually much more expensive, car. If you see an advertisement, even on post, for a deal that sounds too good to be true, it probably is.

Yo-Yo. Yo-yo financing occurs when a Soldier understands his sale is "pending financing," but the dealer does not actually secure financing or lies about financing, and sells the trade-in. This practice usually occurs on a Friday when a Soldier thinks he bought the car, but then gets a call the following week that his "financing fell through." The dealer explains that this can only be fixed with a higher interest rate.

Prior-Wreck. Another tactic occurs when a sales rep does not label a car as a "prior-wreck," and a Soldier buys a car that was previously "totaled" or "salvaged." The dealer does not disclose the prior-wreck, and the Soldier ends up with an unreliable and sometimes dangerous car.

Nondisclosure. Frequently, sales reps do not properly calculate or disclose the correct finance charge, amount financed, payment total, date of payments, and more. The dealer is required by law to physically cover the numbers with you during the transaction.

Possible Solutions. One option, if you feel you have been duped by a sales rep, is to attempt to unwind your contract. First, stop driving the car and keep all paperwork in a safe place (not in the car). Second, see if the dealer will take back the car and return your down payment and trade-in or its value. If the dealer agrees to the unwinding of the contract, you may need to pay the fair rental price for the time you used the car.

Do Your Research. Litigation remedies are available, but filing a lawsuit can be costly and time-consuming. The best way to protect yourself is to do your research before you even go to the dealership.

Research the price of the car. Research how much car insurance you will need to pay. Call the dealership first to negotiate, even if it offers to pick you up or send a taxi. Once you are at the dealership, it has the upper hand.

Get Preapproved for a Loan. Find a bank that will get you a preapproved loan before you go to the dealership. You will get a better interest rate, and you will stick to the amount that was preapproved. If you have to finance at the dealership, do not drive away with the car until the entire financing process is complete.

Take a Battle Buddy. Bring a noncommissioned officer or someone who is "smart" on cars to the dealership. Dealers prey on young buyers with little experience and even less credit.

Do an Independent Inspection. Have your own mechanic do an inspection on a used car. To avoid being sold a prior-wreck, also do a car facts check to get the history of the car.

Read the Entire Contract. Make sure the dealer goes over every single number in the contract and make sure you understand the calculations. Ensure the dealer puts all promises in writing.

"As Soldiers, our battle drills teach us to plan for, detect and react to threats," Mahoney said. "Service members and their families need to approach buying an automobile with the same thoughtful planning, as the auto buying landscape is filled with lenders looking to make an extra buck off of customers who they know possess a steady income.

"Knowing the strategies the lenders employ to deceive you will better prepare you to identify these tactics and then how to react to protect yourself," Mahoney warns.

If you think you have been the victim of one of these deceptive practices or want more information before making a similar purchase, schedule an appointment to meet with a legal assistance attorney at USAG-HI Consolidated Legal Center located at 278 Aleshire Ave., Building 2037, Schofield Barracks. Call 808-655-0663.

(Editor's note: Suter is the judge advocate at USAG-HI Consolidated Legal Center. Pacheco is a staff writer for the Hawaii Army Weekly, U.S. Army Garrison-Hawaii)

Page last updated Tue December 24th, 2013 at 00:00