Horizon, Host: Ted Simons

April 4, 2006


Host: Michael Grant

Car Brokers and Dealers


  • A bill supported by car dealerships is working its way through the state legislature. The measure would limit what car brokersówho are hired by consumers to provide buying services and help them avoid car dealership sales officesócan do. Car dealers say the bill is a necessary consumer protection measure. Brokers say they provide a valuable service. We discuss both sides of the issue.
Guests:
  • Bishop Minerva Carcano - United Methodist Church


View Transcript
Michael Grant
Tonight on Horizon, another rally today at the state capitol. This time various group leaders are gathering to encourage the state legislature to lead the nation in finding different solutions to immigration issues. Meanwhile Arizona lawmakers working on a bill for the new way cars are sold through auto brokers. Those stories next on Horizon.

Michael Grant
Good evening, welcome to Horizon, I am Michael Grant. A coalition of local religious leaders gathered at the state capitol lawn for an interfaith prayer service for immigrants and their plight. They agreed state legislature should and could bipartisanly address the complexities of the immigration issue with a positive approach that respects the lives of all people. Six religious leaders were there and also present was Ken Bennett, representative Jim Weiers, and governor Janet Napolitano.

Kirk Smith
We are all people from faith. Some of us from different faiths, but we are all here to pray together for our legislature. That they can tackle this difficult problem in a way that is compassionate and humane. We are very concerned about the sort of attitude of fear and hatred that we see in our country right now and especially in our own state and we are here to make a positive witness about that.

Gerald Kicanas
Our hope is that our state legislators would demand the U.S. Congress and our own Arizona delegation would pass a comprehensive immigration policy that would protect our borders from criminal intent but move beyond have worker rights with an earned pathway to citizenship for people that are here and for a process that would make more expeditious the unification of families. That's our hope today, that we can encourage the legislators to be true leaders, who lead our state by uplifting our hopes and not standing on people's fears.

Deedra Abboud
Our country is found on immigration and people say we are either a Christian nation and our faith tradition says we are supposed to welcome the stranger. We should have laws and they should be humane.

Peter Levi
Goal is to work together. The ideas of compassion and unity and work together to help embrace our community. That all the people coming to the country to work are really undocumented workers. They are not criminals or terrorists. We want to keep the criminals out we want to keep drug traffickers out we want to keep terrorists out. Those want to enhance the country and be a part of the promise of the country and welcome them.

Michael Grant
Joining us is bishop Minerva Carcano of the united Methodist church in downtown Phoenix and Dick White who is president of the Arizona interface network. What was the message you had and the ninth floor as well.

Minerva Carcano
We were trying to hold up the vision that we need immigration reform and leadership in a time of crisis. Leaders who can help us envision a correcting of an immigration policy that is not functioning. That is spoken and needs to be repaired and so we were hoping that we could hold up that vision of a comprehensive reformation of the immigration law.

Michael Grant
Recognizing that, most of the laws are federally based, why do we travel to 1700 west Washington? Why don't we travel to 1200 Pennsylvania Avenue?

Minerva Carcano
Because the immigration laws that are being considered at the federal level are seeping down in a piecemeal way and they are working on it from a piecemeal approach. That is not very helpful.

Michael Grant Let me go to one aspect of that. I think one the bills opposed, that is seeping down so to speak from the house of representatives is legislation being considered by the senate and house that would make it a felony to be in illegal alien or felony trespassing. I notice the reference to inhumane laws. What is inhumane about that law, in your opinion?

Dick White
Well, again, these are coming piecemeal. And breaking down the sense and burner the 44 37 bill and the bill from the house in the federal congress. That passed in December that is causing such concern nationwide, because it is not a balanced comprehensive approach and those are being broken down and passed piecemeal in Arizona. So we have exactly the same thing congress has done in the past. Coming here and into Arizona and part of that is taking an issue that somebody thought was a civil violation and retroactively turning that into a felony.

Michael Grant
It may not be too far off the mark here. Let's say we pass a guest worker immigration bill. A piece of federal legislation that says okay, here is a pathway to citizenship if you are already here and here is a way to come in. And the same bill passes and make it a felony if you violate that law. To say, we really want you to follow the law. We want our laws to have teeth and our borders to be secure. Have I turned that felony provision from an inhumane law to a humane law under that hypothetical?

Dick White
We already have federal law, which says it is against the law. It is a civil violation in order to, doesn't, to be present here in the United States. Well, and to change it into a felony is going to make it work? Again, the point, do we really believe in Arizona? For instance, we have an estimated 500,000 undocumented living here. Do we want as soon as the law is in effect; we are going to ferret out 500,000 people out of the neighborhoods and homes.

Michael Grant
No, that is a pathway for those people and you said to the people not yet here. Don't come here illegally. Would that make it humane?

Dick White
We have to look at it at that point.

Michael Grant
Bishop, what do you think of that?

Minerva Carcano
People come here out of despair. They come here because they are needing bread for their family and they need a livelihood for their families. We have a need for those workers and that draws them and somehow we have to do some truth telling that says we need the immigrant workers and be fair and just toward them as well.

Michael Grant
But for example, if I understand it correctly, the interfaith network is also opposing a bill that would impose sanctions on employers to not draw the people here or if they hire illegally, they should be punished for that and majority of Americans support that. Is that also inhumane?

Dick White
No, it sort of has to be. Again, we take it as a balanced comprehensive approach and when you take a piece out and solve it by itself, the chances of it being successful is almost nil and the demand, in this contemplated bill, these employers use a system which by all testimony is incapable of handling the volume and there are already kinds of mistakes that occur with it and we will put it into place.

Michael Grant
Senator Kyl says you can beef the system up though. He agrees with your point, but it as pilot program for long enough.

Dick White
Well, it is due to expire in two years, whether that has the capability. When we have it as a proven place, then it is a reasonable request upon employers. But when it puts them in an untenable situation combined with the fact that we do not allow enough workers to come into the country to match our shrinking demographic. We are short of workers in this country. We have 500,000 new workers that are needed.

Dick White
The system is broken.

Michael Grant
What do the letters cover to the president, the speaker, and the governor?

Minerva Carcano
Our hope that they will lead us and have an impact on Washington as well. In terms of proposing and moving an immigration reform. That would include a guest worker program that would treat workers who are already here in a just and humane way that would give people a pathway to citizenship and reunite families as well.

Michael Grant
Can it also include a provision for border security?

Minerva Carcano
Yes. Most definitely. Because that would benefit all of us and that certainly needs to be a part of it.

Dick White
And it would make your resources much better. We wouldn't have to concentrate on people coming over for work. We could concentrate for other reasons and etcetera.

Michael Grant
Dick White, thank you for joining us and bishop Carcano. Thank you as well.

Michael Grant
Auto purchasers can purchase cars through a sales office or go through a car broker. State law outlines requirements and according to those in the industry, many brokers and working dealerships have good relationships. Besides buying a home, an automobile can often be a very expensive purchase. And negotiations can become complicated and sometimes contentious. A bill working it's way through the state legislature would change what they do. Merry Lucero reports.

Merry Lucero
Sherri Collins is a proud owner of a new Honda. Collins, who is hearing impaired, bought this car through a car broker. She says a previous experience with a car dealership sales office left her feeling run over.

Sherri Collins
I was stuck at the dealership for almost nine hours. I mean literally. Nine hours. With the pressure and what is happening with the process and going back and forth and I didn't understand what is going on. It is my money. How much money am I getting into it? What does the fine print say, the monthly payments and for how long. What is all the little things. Warranty and things like that. Those are the things, you don't know what was involved and that was the--I didn't understand everything. That was the key. And I hate not knowing everything. I am the kind of person who doesn't want to know everything. Then I get frustrated.

Merry Lucero
Going through a broker was the opposite experience.

Sherri Collins
We already knew what we wanted. We called the broker and said what I wanted exactly. I may not get the exact color and he will let us know and asked what we thought. We went to his office. We test-drove it and within two hours or less. We were out. It is so transparent and the stress was just removed.

Merry Lucero
Collins found her broker through her triple a membership.

Jim Prueter
They will come into us and stay they are interested in one, two, three different vehicles and we will arrange to have them test drive the vehicles. They can go to their office. We will virtually meet them anywhere. We don't go to the dealer. If they want to drive a couple of two or three different cars and make the decision what they like, they can.

Jim Prueter
We handle the same trade in that you get anywhere except we will only sell you the types of things you want.

Merry Lucero
Car dealers on the other hand, say going through a broker can leave them missing important information when a new car is titled and delivered.

Bobbi Sparrow
Delivery is very important. I think what people are thinking about is all the intricate technology that is involved now and you have navigation and you have on star and the telephone systems that work within the vehicles and the dealers have hours and hours of training and people need hours and hours of training to understand the system and they are spending a lot of money on the systems. We need to explain them and use them properly and then you are talking about safety. On star, you are talking about safety features within the vehicle. Air bags. Where do we place the children? They go through all the training to make sure the consumer is protected.

Merry Lucero
So they are backing a bill to enforce that brokers who usually receive a fee for their service. Not title register or deliver vehicles directly to the consumer.

Merry Lucero
Some other major provisions of the bill may require a deposit be made to the dealership where the vehicle is located and it be delivered at the dealership or the customer's home or place of business. The broker's fee would be fully disclosed.

Bobbi Sparrow
If a broker or credit union or anyone is getting a fee. They will understand what the fees are and what they are spending for a broker deal. We think a lot of consumers don't understand what is rolled into the final place.

Merry Lucero
Triple A said it is more about dealership profits.

Jim Prueter
We can't think of why the legislature, why the senate would go along with this. To legislate competition out of the mark of place is absurd. There are zero complaints at the attorney general's office. Can't be said about the car dealers. Lots of complaints there.

Sherri Collins
It is a program available for us and it is an awesome choice. The customer has a choice. But for me, this was the best experience for me and I felt like I was getting the best service.

Michael Grant
Here now to talk about the car broker bill is senator Thayer Verschoor who voted against it in the senate committee and the representative Gary Pierce was invited and he did try to get here and he is tied up in some budget stuff and had to bail out.

Thayer Verschoor
It is the time of year. It is where we get into the budgets and I know he is involved deeply in that.

Michael Grant
Well, you showed up and you are opposed to the measure and we will have to try to work through this. And the folks in there outlined a few of the things and said they are trying to fix with this. And with this bill, is that consistent with the testimony you heard.

Thayer Verschoor
That is pretty consistent with the testimony I heard.

Thayer Verschoor
And I think that part, the part that is compelling for me and my position on the bill. Michael, I am a pretty simple guy and pretty much a free market proponent and what we have here is a bill that is fixing a problem that the dealers can fix on their own. In other words, all the things that they outlined that the bill can do. The dealers can do without any legislation at all and the question you have to ask is if the dealers don't want brokers doing business the way they are doing it. All the dealer has to do is that's the way we are going to do business. Bottom line, brokers cannot get a car from the manufacturer.

Michael Grant
They have to get it from the dealership.

Michael Grant
You made the comment to me that after listening to the testimony on this, you almost thought it was more like a war between out of state car dealers and in state.

Thayer Verschoor
That's why it came down to, seems to me, most of the dealers that were at the committee hearing were the folks that have invested locally here and live here. They are part of Arizona and that was one of their arguments is that we are the local dealers here and we have invested heavily in our communities. Which is true. These people have been great members of the community and have been helpful and that is probably one of their biggest arguments in favor of the legislation. I don't know that makes good policy.

Michael Grant
How long have car brokers been around? I mean, I just quite honestly, very recently became aware of them and they have been around longer than that.

Thayer Verschoor
From what I can understand, they have been around the valley for at least five years and probably in the last couple of years, it is becoming a more and more popular for the consumer out there to use a broker rather than going directly to the dealer and as you stated why. A lot of the consumers would prefer not to have to go down to the dealership. Things that, you go and look at a new car and here is the factory price and here are the add ons the dealership adds on and they will say you don't have to take those. He testified and tried negotiating those things off your car and see how successful you are.

Thayer Verschoor
The brokers provided a person can come in without all the options on there. They can get the car without the options.

Michael Grant
Going back to the point of instate or out of state. They have to be licensed and go to a California dealership and say; I have someone looking for a 2006 ford and acquire it that way.

Michael Grant
Is it going to work that way?

Thayer Verschoor
It works both ways and I know the dealers with the advent of Internet sales and they can sell their cars anywhere in the country now, a dealership can. I think again, what it boils down to is here, we have got. I am not going to say it is totally in state. Versus out of state.

Thayer Verschoor
Ok But it is about some dealers don't want to do business with the brokers the way they want to do business and some are more than willing to do it that way.

Thayer Verschoor
From what I can gather, the dealers that are dealing with the brokers are using the fleet sales departments in the dealerships that are willing to do it.

Michael Grant
Let me pick up a point that was made on the tape there. In defense of the need for legislation. Basically said and this has to do with forcing the point of sale to the dealership. We dispense valuable information about safety features of the car and various other operational techniques that are important to the purchase. You find any merit in that argument?

Thayer Verschoor
I find a little merit in that because basically, what was brought up during the committee was that there has not been one complaint filed on these brokers and from the consumers out there who purchase cars these ways. About them not knowing and understanding the options.

Thayer Verschoor
Privately I talked to folks who work at the dealerships and deal with the brokers and they told me most of the brokers are former employees of dealerships and understand.

Michael Grant
They have a car background.

Thayer Verschoor
And I think if we were getting a lot of complaints or any complaints and in fact during testimony, the dealerships said there are no complaints, and there have been no complaints.

Michael Grant
Who is the regulatory agency here?

Thayer Verschoor
They have to get a broker's license and that is one of the things I asked during the committee hearing, I asked the motor vehicles department. One of the accusations is that the brokers were going down and getting the title, and licenses for the car and motor vehicle said absolutely brokers aren't allowed to do that. They go get the license and they are allowed to do business and the dealers are the ones who basically work with them and do all these things that some of the dealers don't like.

Michael Grant
There was reference and triple A was on the tape. And I think also, there are a variety of financial institutions such as credit unions and those kind of things that use brokers as an additional service for their depositors or members.

Thayer Verschoor
Yes, there are several of the credit unions who do use brokers and have contracts with brokers and unfortunately I believe one of the things the they are saying, they are not trying to put them out of business. One of the credit unions employed had over 45 locations with brokers in those locations are ending their contracts so basically there is going to be 45 individuals here by the end of May.

Michael Grant
Even if the bill doesn't pass.

Thayer Verschoor
That relationship is being terminated and the impetus was stated because the gill is going forward.

Michael Grant
The reason why the dealer wants to force it so additional things can be sold to the buyer. Do you share that suspicion.

Thayer Verschoor
I share that suspicion because anyone who is in marketing knows. You want to get the customer in front of you and talk about the options available.

Thayer Verschoor
There is merit to the fact that there are services that are available at the dealership. I think there is some merit in that and they can do that any way and the bottom line again goes back to the consumer and what the consumer wants and if they wanted that experience. They would go to the dealership and deal directly with the dealership and they are.

Thayer Verschoor
If a dealer doesn't want to sell or give a car to a broker. If they want the broker to bring the customer in, the dealer can demand that.

Michael Grant
Thank you for the information. You can see transcripts about Horizon. You can see it at az-PBS.org and click on Horizon and follow the links.

Nadine Arroyo
population in many Arizona counties is growing rapidly that means the process for which judges are put in office could change. Judicial merit selection. Supporters and opponent resist debating the process again. Does the process work? Should Arizona counties avoid it? Join us as we look at merit selection Wednesday at seven on Horizon.

Michael Grant
And then on Thursday. Governor Napolitano will join us for her monthly visit. Thank you for joining us this evening. I am Michael grant. Have a great one. Good night.

Announcer
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