Like all companies, auto dealerships are in the business of making money and dealer-installed options are frequently a good way to markup a vehicle’s final price. While that’s great for shops, new cars don’t really need rustproofing or fabric protection. Of course, that doesn’t keep salesmen from occasionally tacking those services on for a few hundred dollars extra though.
One optional extra you actually may want to take advantage of is VIN etching. While this is something you can do at home for cheap, most dealers will gladly do it for a significantly larger fee. But it doesn’t do you any good if the store doesn’t actually follow through with the service and charges you for it anyway — which is exactly what happened at a Nissan dealership in New York.
Nissan of New Rochelle was caught charging customers for an unwanted VIN etching service that they frequently didn’t even apply to cars. Now the dealer has agreed to pay nearly 300 customers more than a quarter of a million dollars in restitution and issue a public apology for its shady practices.
For the sake of clarity, VIN etching itself isn’t a scam. Engraving a vehicle’s identification number onto the windshield makes those portions of a car less appetizing to thieves hoping to resell them. It’s far from foolproof but VIN etching is recommended by plenty of police and auto insurance agencies as a way to protect against auto theft. Some insurance companies will even offer a discount to the comprehensive portion of your car insurance (or waive your insurance deductibles) if your car is protected by VIN etching.
However, the New York dealership wasn’t providing the service, which it called the “Total Loss Protection Guarantee.” According to Automotive News, investigators found that Nissan of New Rochelle did not bother to etch the VIN onto the vehicle’s windows at all. On some vehicles, the dealer put stickers with registration numbers on the inside the doorjamb where no one could see it, providing no effective theft deterrent. For other vehicles, the dealership provided no stickers or decals whatsoever.
Hundreds of consumers purchased the etching service. The charges ranged from $215 to more than $5,000 and were frequently tacked onto the final sales price without the knowledge or consent of the customers.
Buyers were also promised a guaranteed credit of $3,000 or $5,000 toward the purchase of a new vehicle if theirs was stolen. But numerous conditions in the fine print made the proposed credit essentially useless. One such limitation specified that the dealership could not offer the money if it eliminated the dealership’s profit on the sale.
“There will be an apology letter directly from me to the individuals,” Dealership owner Anthony Panarella told Automotive News.
Panarella said Nissan of New Rochelle had a “less-than-stellar reputation” when he purchased it in 2014. He said he should have vetted the veteran employees better and was forced to fire four as a result of the scam. “This [fraud] was something inherited,” Panarella explained. “I’m 38 years old. When I bought the store I was 35. I was green.”
“I didn’t know anything was going on until there was a problem,” he said. “Things don’t get to our level until the horse is already out of the barn.”
Panarella claimed he immediately cooperated with the investigation when the attorney general’s office notified him of the problem roughly 18 months ago.
With the investigation over, Nissan of New Rochelle has agreed to refund $276,127 to 298 consumers charged for the fraudulent Total Loss Protection. An additional $22,084 in penalties will go to the state of New York.
“Consumers should not have to worry that they are being scammed into adding on bogus products and services when they purchase a car,” New York Attorney General Eric Schneiderman said in a statement. “Buying a car is already a major investment for many families, and tacking on thousands of dollars extra can become a significant financial burden.”
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