Over the past two days, we’ve discussed Vehicle Identification Numbers and the practice of VIN etching. VIN etching uses an acidic paste and a stencil in order to etch the Vehicle Identification Number onto a car’s windshield and windows. The value of VIN etching as a theft deterrent doesn’t appear to be backed up by statistics, but car dealerships routinely incorporate fees for VIN etching into new car purchases. Conceivably, charging customers for this is a way to increase car dealers’ profits at the time of the sale.
Car dealerships handle VIN etching in a number of different ways. For example, a car dealer might offer it as an option, similar to a car alarm, and charge for it. Alternately, a car dealer might include it as a line item on the bill of sale, implying that VIN etching is required. When this happens, only the savviest consumers understand that they can opt-out. In fact, ConsumerReports.org lists VIN etching in “Buying Unnecessary Extras” under their “10 Common Car-Buying Mistakes.” [LINK TO http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/at-the-dealership/common-car-buying-mistakes/index.htm ]. ConsumerReports.org says, “If you decide you want VIN etching, you can buy a kit to do it yourself for less than $25, instead of the $200 that some dealerships charge.”
Other times, however, a car dealership might disguise VIN etching as a warranty. That is alleged in the class action lawsuit, Seekamp vs. It’s Huge, Inc. (U.S. District Court, Northern District of New York, Case No. 09-cv-00018-LEK-DRH). The suit alleges that Fuccillo Hyundai in Schenectady, New York, sold Seekamp a $295 warranty for VIN etching service. Allegedly, Seekamp was told that, if her vehicle was stolen and then judged to be unrecoverable or a total loss, the warranty would provide her with $2,000 toward buying a replacement car. Seekamp says that she was told that all of the dealership’s vehicles come with VIN etching, and that she was required to purchase the warranty as part of the sale.
The class action lawsuit makes the argument that the New York State Insurance Department considers these services to be insurance policies, and that the law says sellers must be licensed to sell insurance in New York. The car dealership allegedly sold the insurance through a company that wasn’t licensed to sell insurance in New York, and that to get around this law, the dealership told buyers that the service was a “warranty.” For more information about the class action, visit http://lemberglaw.com/class-action-fraud.php.