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'60 Minutes' Aired Segment on Dealer Reserves

April 5, 2004

NEW YORK--After several postponements, the CBS "60 Minutes" report on dealer reserves aired Sunday, April 4.

Called "The Best Possible Deal?", the piece claimed F&I managers tell customers they'll get them the best deal available on financing and then add percentage points to the rate to keep for themselves, without telling the customer.

Customers of Covington Pike Toyota, the Tennessee dealership being sued for deceptive sales practices, were interviewed and told stories of being charged excessive markups. One customer said she was charged an extra 4 percent, adding $3,700 to the cost of the car. The sales document made it look like she was paying all the interest to the finance company, she said.

"It's telling the customer you're giving them the best available rate and not doing it--that's the essence of the lawsuit," said Jim Andrews, the attorney bringing suit against Covington Pike Toyota.

A representative of UnitedAuto Group, which owns Covington Pike Toyota, said that dealer reserve is an accepted practice and that most customers negotiate every aspect of the transaction, including the finance rate.

The National Automobile Dealers Association offers guidelines for F&I managers in the event that they are contacted by the media about dealer reserves (www.nada.org/talkingpoints).

F&I wants to hear your thoughts on this "60 Minutes" segment and the debate over dealer reserves. Contact Joan Shim, managing editor, at [email protected] or 310/533-2592.

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