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NADA rebuffs '60 Minutes' exposé

November 22, 2010
The National Automobile Dealers Association charged that an April 4 "60 Minutes" segment on dealer reserves implied that deceptive practices are pervasive in the automotiveretail industry. "The actions of a very small minority of dealers do not characterize our profession,"  the NADA said in a statement about the CBSTV show. "The '60 Minutes' piece was unbalanced, painting dealer reserves as a deceptive and pervasive industry practice. Dealer reserve is not only a widely accepted industry practice, it is fair compensation for a retail service dealers provide to our customers. In fact, dealers provide a competitive marketplace for loans and offer our customers the best route to a low cost loan. "Because auto dealers work with large numbers of customers, we have access to multiple financing sources with low wholesale rates otherwise unavailable to our customers. Even so, we encourage car buyers to shop around to ensure they're getting the best loan for their needs. " '60 Minutes' referred to unnamed studies that show deceptive practices. These studies are neither accurate nor balanced. One, the Cohen study, was actually paid for by plaintiffs at the behest of trial attorneys who were suing dealers, hardly an unbiased effort. "The overwhelming majority of the 1 million people we employ are honest, hardworking individuals characterized by integrity and dedicated to satisfying their customers. National customer satisfaction surveys reflect that reality, giving dealerships overwhelmingly high marks. However, like any business, there is room for improvement, and we're taking steps in that direction. We're educating consumers by providing a step-by-step guide to vehicle financing at dealerships nationwide. "We've called for disclosure that the finance rate is negotiable and that dealers may retain a portion of the financing arrangement. And we're training dealers to do a better job of explaining the finance process to the customer. Every day, dealers across the country provide affordable, convenient financing to car buyers of all backgrounds within a highly competitive marketplace. Although improvements can be made, dealer financing will continue to benefit consumers. "To malign all dealers with one broad stroke, based on the actions of a few, is unfair to your viewers and our industry."