The Employee - Friends Discount that Costs You Money
We're seeing it more and more often. Consumers who end up with a lemon and then find out that there may not be much they can do about it because they were tricked by the dealer into giving up their court rights without realizing it...in exchange for a couple of bucks being saved.
The dealer wants to sell you that new car. If they don't sell, they don't make money. Pure and simple. The hang up? They just can't get you to buy at their normal price. So what to do...
"Well how about we throw in an employee discount?"
"But I'm not an employee," you say. No problem. The dealer says they can give you a discount based on one of their own employees. Sounds too good to pass up? Remember what your mother told you: there's no such thing as a free lunch.
To get you a lower price on that new car, and get you to buy it, what's really happening can be a royal ripoff.
We've heard of one salesman who was "harvesting data" from dealer employee records so he could write up deals based on other employees' discount numbers and sell more cars, make more money, and never tell the co workers he was using their discounts.
We've heard of another finance man at a Chrysler dealership who opened a desk drawer and said "here's a guy who retired, we'll use his discount number."
Why should you care? Suppose that new car turns out to be a lemon.
What they aren't telling you is that by taking the employee discount you may get stuck with the employee discount rules. Those rules contain a "railroad" clause that says that if you have any dispute about that new car, you can't go to court. You can't sue them. You can't make them pay your attorney costs either.
In short, you get railroaded. You lose your rights. Kaput. Stuck. Ripped off. Shafted.
You got a beef? The only thing you can do is go ask their secret arbitrator what they might do for you. Oh yeah, did I mention who pays for the secret arbitration? Well, it isn't you. Why does that matter? Well if the secret arbitrator gets paid by the manufacturer, who do you think they are going to favor? Well, it isn't you.
So there you go. That employee discount can save you a hundred bucks or more, sure, but it can end up costing you thousands and thousands of dollars. Chrysler wins. You lose. Oh, but they aren't done with you!
Now when you go to trade it in, what do you think the dealer's going to say? "Negative equity" Now that lemon car is going to cost you thousands of more dollars to get rid of since you gave up all your legal rights just to save a few bucks. They get you going and coming if you don't watch out.
The moral of the story? If you aren't entitled to an employee discount in the first place, don't fall for the scam when the dealer says they can set you up with one, because that's exactly what they are doing, setting you up.
If the dealer offers to give you a "friend" discount of an employee, don't fall for that either. We've seen some of these "friends and family" discounts that are only $150 or so. Believe us, that discount isn't worth it. For a puny $150 or so, you can get stuck big time.
But it isn't completely hopeless. You can still sue the dealer for stealing your Lemon Law rights! If you've been ripped off, contact us. We sue car dealers for sales fraud, too. We do it every day.