“They Try to Take You for What You Don’t Have”

The phone rang. Another call from J.D. Byrider Sales, the used-car dealership in Louisville where Kenneth Duncan had gone to buy himself some cheap, dependable transportation.

Duncan, a low-paid nursing assistant and hospital secretary, says the woman told him: “If you don’t pay, we’ll come and get your car.”

“Come and get it?” Duncan said. “You’ve already got it.”

Duncan was already vehicle-less, he explains in a lawsuit, because the dealership had taken his trade-in, signed him to loan of almost $10,000, and then put him in not one but two clunkers: first a ’93 Grand Am, which wouldn’t start because its engine was shot, then a ’92 Oldsmobile Achieva, a replacement car that drooled a “brown, sticky substance” from under its motor and stalled so often the dealer sent a tow truck to haul it away at 11:30 at night.

According to his lawsuit, Duncan spent about three months in limbo, fending off the dealership’s collectors and fruitlessly calling to see when he could get his car back.

Finally, the suit says, the Achieva was returned to him, but the car was still a mess—it wouldn’t start, bolts were missing, oil and antifreeze were leaking, its onboard computer was lying on the passenger-side floor.

Once again, the dealership had the car hauled away. Duncan decided to fight back. He’s pushing a lawsuit that accuses J.D. Byrider of a “pattern and practice” of selling overpriced lemons and then refusing to fix them when customers invoke their service contracts.

“People like me, we don’t have a lot to begin with—if we did, we wouldn’t have to go to those car lots,” he says. “They try to take you for what you don’t have.”

Duncan’s adversary in his legal battle is no mom-and-pop gravel sales lot. It claims 90 employees, sells 300 cars a month, and is a member of the burgeoning J.D. Byrider network, which bills itself as North America’s largest used-car franchise. The national chain says it has grown to some 130 locations and sold more than 300,000 vehicles by serving the fastest-growing segment of the used-car industry—“people with less-than-perfect credit who need good cars to get on with their lives.”

Not so long ago, corporate America dismissed the used-car industry as a gritty hodgepodge of small-time operators tucked away amid pawnshops and liquor stores. But over the past decade, the industry has begun to win a place in the financial mainstream—and commenced, slowly but inevitably, to embrace the American economy’s “Bigger is Better” imperative of centralized ownership and chain-driven conformity.

Market consolidation hasn’t necessarily translated into changes in the way people get treated when they go to buy a used car. J.D. Byrider, for example, has been the target of class-action lawsuits in Ohio and Kentucky, a citizens group protest in Arizona (see “Fighting back”) and, in Louisville, a flurry of complaints to the Kentucky attorney general’s office.

One class action alleged that a cluster of J.D. Byrider franchises in Kentucky, Ohio, and Indiana hid exorbitant interest rates by charging higher base prices for automobiles sold on credit than for ones sold for cash. The lawsuit, which involved nearly 5,000 customers, was eventually settled for a modest sum, $180,000. J.D. Byrider denied any improper practices.

Kenneth Duncan’s attorney, Ellen Friedman, says she’s handled a handful of cases against the Louisville Byrider franchise, but she’s turned away many more. “Over the last three years, it’s in the hundreds,” she says. “The number of calls that I get from people with complaints is overwhelming.”

J.D. Byrider’s corporate spokesman did not return repeated calls from Southern Exposure seeking comment. In public statements, the company says it sells quality vehicles and that it treats its customers with respect. Its salespeople, it says, are “skilled at satisfying the needs of our customers.”

The costs are high—as much as 25 percent interest to finance a J.D. Byrider car or truck—but the company says that’s the price that people must pay in order to make a new start.

When a new J.D. Byrider announced its opening in Kanawha City, W.Va., this spring, franchise co-owner Bill Minsker told the Charleston Gazette: “Will people pay more? Probably. Will people have higher interest rates? Probably. But at least they’ll get something to drive.”

Minsker said J.D. Byrider helps customers clean up their credit and “get back on track establishing their freedom.”

Marc Maguire, spokesman for the Louisville J.D. Byrider franchise, declined to comment on Duncan’s lawsuit. But he says he’s willing to listen to customers’ complaints “and do what’s right.”

Maguire notes that 40 percent of his customers are return buyers or referrals from other buyers—evidence, he says, that “believe it or not, we’ve got a lot of happy customers.”

Not everyone’s happy, though. Complaints on file with the Kentucky attorney general’s office allege that the Louisville franchise and Byrider’s captive finance company, CarNow Acceptance Corp. (CNAC), engage in a variety of unseemly practices, such as selling overpriced cars that quickly break down, slipping in hidden charges, and harassing late payers with abusive collection calls.

One Louisville customer, Pamela Rankins, sent the attorney general’s office a copy of a letter she wrote to CNAC, pleading for an end to collection calls that she said were threatening and, in one instance, profane. “I’m well aware of my debt to you,” she said, “but I also have rights.”

Another complaint came in from a 19-year-old ex-employee, Wesley Hopper, who bought a 1995 Ford Thunderbird while he was still working at the Louisville dealership. He told the attorney general that Byrider gouged him by hiking the price of his car well above its true value, and selling him a $1,095 repair warranty that he claimed was “slipped onto the papers without my authorization.”

The total cost of the deal: $8,295.

It didn’t take long, he said, before he realized the car was worth much less. “I have had the car appraised twice,” Hopper wrote. “It is worth no more than $1,200, if it is in good condition.”

But its condition was anything but good, he said. It wouldn’t start for two weeks, and he had it hauled to a garage for repairs—none of which was covered by the $ 1,000-plus warranty. When he told Byrider the transmission was about to go, he said, he was told he’d have to pay a $200 deductible before it could be fixed.

All he wanted, Hopper wrote, was to return the car and get back what he’d put into the deal—including his $700 down payment.

“Every phone call or conversation I have had with anyone at either J.D. Byrider or their finance company (CNAC),” Hopper wrote, “is filled with rudeness, sarcasm, and a direct unwillingess to help in any way.”

In response, CNAC wrote the attorney general’s office that it “would like to apologize for any inconvenience that we have caused,” but added that the case was now a “legal matter” and Hopper should contact its attorney.

CNAC’s attorney, Joe Chanda, didn’t return a phone call from Southern Exposure. After an initial telephone interview with the magazine, franchise spokesman Maguire passed word through an employee that he didn’t want to discuss the topic further.