Consumer Watch: Lying For a Car Loan

By Amanda Taylor, NEWS 9 Consumer Watch Team

NORMAN, Oklahoma -- Kelsey Zeltwanger's new car is almost as basic as you can get. She knew it didn't have all the bells and whistles when she bought it from Lindsey Street Motors in Norman, but that is not what the finance manager at the dealership told her to say to the bank that loaned her the money.

Zeltwanger said the manager told her if the loan company called she should exaggerate the car's features, her income and the length of time she had lived in her home.

"Why do they want me to lie? Why do they want me to do this?" Zeltwanger asked the NEWS 9 Consumer Watch Team. "It just doesn't make sense to me."

But it made sense to Ken Whitehead, the deputy director for the state's Used Motor Vehicle Commission.

"It allows the dealer to make a much larger profit on the vehicle because based on options on a vehicle, you can have a value increase of $2,000 to $3,000," Whitehead said.

Zeltwanger's 2009 Chevy Aveo had 50,000 miles on it. She paid about $12,000 for it. Even if the car had additional features, the value is $11,055, according to The Kelley Blue Book. A basic model like hers is $10,255.

Zeltwanger blamed her inexperience for the price she paid.

"If someone is in that position, I don't want them to get screwed over as bad as I did," she said.

Jay Williams, the owner of Lindsey Street Motors, said even with added features, the dealership did not make any additional profit off the deal. Williams admitted the dealership told Zeltwanger to lie to the loan company, in order to get a loan she might not qualify for otherwise.

The practice is apparently common in the auto industry, but the Used Motor Vehicle Commission said it doesn't take the chance.

"Depending on the level of loss, the bank could go to the federal government on bank fraud because it could be criminal if they lose over a large number of deals," said Whitehead. "At the very least, it could be a civil suit because they were lied to when they loaned the money."

Zeltwanger's lender never called to verify the features on her car, so she hasn't had to lie.

Lindsey Street Motors promised to take care of Zeltwanger if there are any repercussions from the finance manager's advice.