Vehicles

Auto Issues – Tips for Consumers:

Buying a car is exciting. It is likely to be the second largest purchase a consumer will make. The car buying experience is unique because it allows you to negotiate the price you are willing to pay for a car. You can't negotiate the price of your groceries, or most other consumer goods, so consumers don't have a lot of experience doing this. Car salesmen do this for a living, and are very good at getting you to pay what they want you to pay. But having some basic knowledge of the negotiation process can help you the next time you are in the market for a car.

Buying a New Car

MSRP and Invoice Price. When buying a new car, you want to know the "Manufacturer's Suggested Retail Price," called the "MSRP." The dealer makes a fair profit at this price. This price must include all destination charges. The MSRP will be posted on all new cars. Theother price you want to know is the dealer's "invoice price." Invoice prices are often posted on the dealer's webpage. You can also find them by going to the National Auto Dealers Association "NADA" webpage at www.nada.com, or Kelly Blue Book, www.kbb.com. The invoice price is the price the dealer is actually "billed" by the manufacturer for the car. But this does not mean the dealer will not make money by selling the car at this price. Depending on the arrangements the dealer has with the manufacturer, the dealer may get bonuses and incentive payments from the manufacturer based on the dealer's performance.

Document Fees

What's Included in the Price? The advertised price of a car must include all dealer fees and charges except for title, licensing, and registration fees actually paid to the State of Alaska. All "document fees," "preparation fees," or any other fees charged by the dealer are essentially overhead of the dealer, and must be included in the advertised price of the vehicle. Once you make an offer that is below the advertised price, be careful – now the dealer can add these fees back in. The best way to ensure that you will not pay for any hidden fees, or be surprised by the final price, is to negotiate for a "drive it away" price that includes all fees. That way you will know exactly what you have bargained for.

Old Stock and Last Year's Model

You may see advertisements from dealers that offer vehicles at prices far below the MSRP, and even below invoice price. There can be several reasons for this. For older stock and prior model years, the manufacturer may give the dealer special incentives to sell older models, allowing the dealer to make big price reductions. Also, the dealer has an incentive to sell old stock to may room for new stock. But there is a catch for consumers. Even though the vehicle may be new, when you buy a prior model year the car is already a year older, and has less value. As soon as you title the car in your name, you now have a used vehicle that is two years old instead of one. This affects the value of the car when you try to sell it later.

Buying a Used Car

The best advice you can get on buying a used car is "buyer beware." There are very few laws that protect consumers when buying a used car, especially when the car is sold "as is." "As is" means exactly that. Alaska law does require every dealer to disclose to you the accident and repair history as reported by the prior owner of a vehicle it has taken on trade. But this does not guarantee the prior owner was truthful. There are some services, like Carfax®, that can provide you with some vehicle history. But the best way to be sure of the condition of the vehicle is to have it checked out by a qualified mechanic before you buy it. Once you are satisfied the car is in good mechanical condition, you can focus on price. Check out www.nada.com or www.kbb.com for used car values.

Cooling Off Period?

No. There is no automatic two or three day cooling off period that allows consumers in Alaska to return a car once you have completed the purchase. Once you buy it, it's yours.

There are several restrictions on motor vehicle dealers when it comes to advertising a vehicle. For more information please read the Alaska Motor Vehicle Dealer Practices - AS 45.25.400 - AS 45.25.990

Repairs

Every repair shop must give you a written estimate of the repair. Before the shop can charge more, it must obtain your permission for the additional cost. The shop can do this with a phone call – it does not have to be in writing. So be careful when talking to the repair shop, and make sure you understand what you are agreeing to. For more information read the Alaska Automobile Repair Act - AS 45.45.130 - 45.45.240.

Alaska's Marine Products and ATV Lemon Law

The Alaska Legislature passed a new law in 2009 that gives consumers the right to demand a refund or replacement of a boat, snow machine, or ATV if it has a problem that cannot be fixed within a year of purchase. This new "Lemon Law" is found in the Alaska Statutes at Sec. 45.27.190 - .220. The new law is similar to the motor vehicle lemon law. It applies to a new boat, outboard marine gasoline motor, boat package (boat equipped with a gasoline motor), all terrain vehicle, and a snow machine. The law does not cover any watercraft designed to be powered only by an occupant's energy (i.e. kayak, canoe).

If during the warranty or within one year of the date of delivery, the manufacturer or dealer is unable to fix a problem after a reasonable number of attempts (presumed to be three), the manufacturer must refund the purchase price or replace the product. To take advantage of this law, the consumer must give written notice to the manufacturer and dealer by certified mail within 60 days after the end of the warranty or 60 days after the one year anniversary of the date of purchase.

Alaska Law:

Federal Trade Commission Links