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Posts published in “Columnists – Ask the Attorney General”

Buying a Car: How to be a Smart Negotiator

A car is a major purchase. If you are planning to buy a car, you need to know what kind of car you want and what you can afford. But it is also a good idea to know something about the car sales process.

Watch out for add-on fees. Recently, we discovered that more than a dozen Houston-area dealers were forcing consumers to purchase unwanted gas or maintenance coupons. Dealers ran print and broadcast ads without mentioning that the purchase of a coupon booklet costing hundreds of dollars would be a condition of the sale of the car. Consumers were not aware of this requirement until the charge appeared on the final bill.

My office filed a lawsuit that persuaded dealers to refund the price of the coupons and discontinue the practice of adding on mandatory costs to advertised prices. We are actively discouraging this practice statewide.

Many car sellers try to get buyers to negotiate the sale on the basis of monthly payments. You are better off negotiating the full price of the car. If you agree to a monthly payment, the dealer may actually end up charging you more for the car in the long run. First negotiate the best possible price for the vehicle. Then figure out the financing.

Beware of diversionary tactics, such as the “four squares.” If the sales person starts to draw out four squares and write numbers in them, he or she may simply be trying to lead you back to working from monthly payments. Keep it simple. The most important number is the total price. After you get a good price, you can look at ways to finance it with the best interest rate and lowest possible monthly payment.

Car dealers can often help you find the best financing, but don’t forget to check with other lenders, such as your own bank, to be sure that you are getting the best deal. Take into account the rate of interest, the duration of the loan, and the bottom-line price of the car when choosing the best terms.

Let’s say you’ve found the car you want for a good price. The dealer has offered a fair price for your trade-in vehicle and financing at a competitive rate of interest, with a monthly payment you can afford. All this had been drawn up on paper. You have read through it carefully, and you are ready to buy. All that is needed is final approval on the financing. The dealer says, “Why don’t you just take it home with you over the weekend. See how you like it!”

You can’t wait… but you should. Don’t ever leave your old car at the dealership and drive away in the new car until all the paperwork is absolutely final. The financing may fall through, the monthly payment could go up and your old car could get sold. This is a tough predicament for the buyer and, believe me, it happens.

Make sure you know whether you are buying or leasing. We have received complaints, often from Spanish-speaking consumers who thought they had signed a contract to buy a car but found out later that they were actually leasing the car. Be sure to read the contract carefully before signing it.

Finally if you want the best deal, have patience and be prepared for several waiting sessions. During your negotiations, the sales associate will more than likely have to “check with his manager.” The longer you wait, the more frustrated you get and the more likely you are to agree to any deal. You might want to bring a magazine to read while you wait. You may also want to bring a calculator so you can check the math for yourself.

The majority of car dealers are honest business people. However, if you encounter questionable business tactics, do not hesitate to contact my office.

POINTS TO REMEMBER
Buying a Car
– Watch out for hidden fees
– Negotiate the final price of the car, not the monthly payment
– Don’t take the new car or leave your old car before the deal is final
– Read the contract carefully and know for sure whether you are leasing or buying
– Be patient, shop around, and see what kind of financing is available apart from the dealer

To complain about a car dealer:
Texas Department of Transportation
Motor Vehicle Division
Dealer Enforcement
P.O. Box 2293
Austin, TX 78768
(800) 687-7846
www.dot.state.tx.us

To complain about a car finance company:
Office of the Consumer Credit Commissioner
2601 North Lamar Blvd.
Austin, TX 78705-4207
(800) 538-1579
www.occc.state.tx.us

Or call the Office of the Attorney General at (800) 621-0508 or (800) 252-8011
www.oag.state.tx.us

Know your tenant rights

My office receives quite a few calls from tenants who have disputes with their landlords. The complaints range from issues of health and safety to non-return of security deposits and lack of peace and quiet.

The most important part of your relationship with your landlord is your rental agreement, which you should always obtain in written form. Be sure to read the lease carefully before you sign it. If you want to change a part of the lease, discuss it with the landlord. He or she may be willing to make changes to the contract.

Texas law provides you with additional protection. The laws states that you have the right to “quiet enjoyment.” If other tenants in your building are disturbing you, you should complain to the landlord. The landlord has a duty to see that you are protected from other tenants wrongful behavior.

Except under certain circumstances, a landlord may not interrupt utilities to a tenant unless the interruption results from bona fide repairs, construction, or an emergency.

You have a right to demand repairs when a condition affects your health and safety. Under Texas law, by renting you the property, the landlord guarantees that the unit will be a fit place to live. The landlord does not have a duty to pay for or make repairs if you or your guests cause an unsafe or unhealthy condition through negligence, carelessness, abuse or accident.

A dwelling must be equipped with security devices such as window latches and keyed dead bolt locks on exterior doors. These devices must be installed at the landlord’s expense. If such devices are missing or are defective, you have the right to request their installation or repair. The landlord must also provide smoke detectors.

If the landlord won’t make repairs needed to protect your health, safety or security, and you follow the procedures required by law, you may be entitled to end the lease or have the problem repaired and deduct the cost of the repair from the rent. You could also file suit to force the landlord to make the repairs.

Send the landlord a certified letter outlining the needed repairs. Be sure that your rent is current when the notice is received.

Your landlord should make a diligent effort to repair the problem within a reasonable time. The law presumes seven days to be a reasonable time. If the landlord has not made a diligent effort to complete the repair within seven days and you did not have the first notice letter delivered to your landlord via certified mail, return receipt requested, or via registered mail, you will need to send a second notice letter.

If you receive a notice to vacate from your landlord, you do not have to move out of the unit by the date indicated in the notice. If you decide to stay, the landlord can then file an eviction suit with a local justice of the peace.

The landlord still cannot remove the tenant or the tenant’s property without a court order, except in the case of abandonment or when exercising a landlord’s lien. For example for non-payment of rent. After the landlord files the eviction suit, the court clerk will send the eviction citation to the Constable’s office for service to the tenant.

If you receive a citation, you should review it carefully. It will outline your rights. You will then have the opportunity to go before the justice of the peace to tell your side of the story. You do not need an attorney present, but it may be advisable for you to consult with one. If you lose, you still have the right to appeal the decision.

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POINTS TO REMEMBER

Tenant Rights

Read the Attorney General’s brochure, Overview of Tenant Rights

www.oag.state.tx.us

The Austin Tenants’ Council and the State Bar of Texas provide additional information on tenants’ rights, including brochures. You can contact those organizations as follows:

Austin Tenants’ Council
1619 E. Cesar Chavez Street
Austin, TX 78702
(512) 474-1961
www.housing-rights.org

State Bar of Texas
P.O. Box 12487
Austin, TX 78711
(800) 204-2222
www.texasbar.com

Information on this and other topics is available on the Attorney General’s Web site at www.oag.state.tx.us.

Is a Credit Counseling Service Right for You?

Good credit is an essential aspect of life in today’s world. Your credit history shows how responsible you have been in paying your bills. It helps determine the amount of credit available to you as well as the interest rate you will pay.

Unfortunately, we are not always able to maintain a good credit rating due to hardship, such as unemployment. As a result, an increasing number of consumers are turning to credit counseling agencies for assistance. What is credit counseling? Credit counseling is advice offered by a non-profit or for-profit organization that is designed to get you out of debt, often with the aid of a debt repayment plan.

Typical debt repayment plans require you to make a monthly deposit to the credit counseling agency, which will then pay off your creditors according to a payment schedule set by your credit counselor.

Bear in mind that as part of the repayment plan, you may have to agree not to apply for or use new credit while you are participating in the program. When considering whether to use a credit counseling service, ask for an estimate of how long the repayment plan will take. The majority of successful plans require you to make regular payments for at least 48 months. Be sure to find out exactly how much money each service will cost you. Payment costs and requirements vary widely from agency to agency.

Some credit counseling agencies are free or charge a small amount for credit management, while others charge a monthly fee that can add up over time. Be aware that some credit counseling agencies are funded partly by creditors. While a debt repayment plan can reduce the stress associated with dealing with your creditors, you must remain an active participant in your repayment plan. You are responsible for reviewing your monthly statements from your creditors to verify that they have been paid and that other provisions of your plan have been satisfied. You are also responsible for paying debts not included in the repayment plan.

Participating in a repayment plan will not erase your bad credit. Accurate negative information about your credit history can stay in your credit file for up to seven years. In addition, your creditors will report information on accounts that are in the credit management process, which may lower your credit score in the short run.

Debt repayment plans usually only cover unsecured debt. Your car loan and home mortgage are considered secured debts and might not be included. You will have to continue to make payments directly to these creditors. The reason these kinds of loans are considered secured is that a vehicle can be repossessed or your home foreclosed on if payments are not made. If you are experiencing difficulty in making your car or house payment, contact the creditor immediately.

Consumers should also be careful when considering loan consolidation as a way to pay off creditors. Some companies claim they can guarantee a loan for a fee paid in advance. The fee may be as much as several hundred dollars. If someone guarantees or strongly suggests that they can get a loan or credit for you, remember that it’s against the law for them to request or accept payment until you actually get the loan or credit. Legitimate lenders never guarantee or imply that you are likely to get a loan or credit card before you apply, especially if you have bad credit, no credit or a bankruptcy on your record.

Credit counseling services can provide a means for consumers to get out of debt, but they are not for everyone. You should understand that a debt repayment plan is a methodical, long-term solution to debt management.