Evening star., 1948-11-14
Full Airing Needed

The charges of unfair practices mace
against some undesignated automobile
dealers in Washington and elsewhere by
Chairman Macy of House investigating
subcommittee are so serious that notnlng
short of a thoroughgoing public inquiry
should be made. The charges, as they stand,
damage the reputation of the automotve
industry as whole.
Mr.. Macy said his group had found some
dealers in the District who have made
every effort to deal fairly and honestly
with the public" But, he declared, cross
section check of local dealers had revealed
others who have taken the public for an
"unconscionable" ride in respect to trade
In allowances and extra-equipped new cars.
Even allowing for error in Mr.. Macys
estimates of $4000,000 in overcharges IN
the Washington Metropolitan Area during
the past seven months and OF $3.50, 100000
in the country at large, the picture is dis
turbing one. Reputable dealers will be as
interested in ridding the trade OF unethical
practices as is the car-buying public. AND
the reputable dealers themselves have eVl-
denced concern over the activities OF some
firms, especially in the used-car field. Many
of the dealers have adopted conditional
sale contract to curb the so-called gray
market in new cars.
It would be unfair to compare trade-ln
allowances today with those which pre-
vailed before the war, when used cars were
a glut on the market. Many dealers took
a beating on trade-ins in those days, in
order to sell new cars. Most of the old
established dealers today contend that at
least 20 per cent markup on trade-ins is
necessary to cover reconditioning and pro-
vide a reasonable profit on resale. Mr..
Macy's subcommittee agrees that 20 or
Is per cent margin Is not excessive But
the chairman asserts his investigation dis
closed that the average markup was 43 per
cent and that in some cases it ranged as
high as 500 per cent. Such prohteering is
unconscionable. Thus, with the market
pendulum swinging in direction opposite
to that of the prewar era, 1t seems that
some of the customers are taking the beat
ing nowadays-not the dealers.
AS for the alleged extra" racket, 1t is
true that many new cars today are coming
to the dealers-and thence to the public
equipped with accessories listed by the fac
tories as optional Most buyers are so
glad to get their new cars that they are
willing to accept the extras without qulo-
bling. AS consequence, a lot of accessories
have been sold in this way that might not
have been disposed of so readily In normal
times. Not all new cars are loaded with
unwanted extras, however, nor do all deal
ers insist on including them as condition
of sale.
The Macy subcommittee does not accuse
offending dealers of violating any law, nor
Is it clear how legislation could deal with
the problem. If the situation is anywhere
near as bad as the chairman charges, how
ever full airing is in order. Only through
such an airing can the offenders be ex-
posed and the good name of the reputable
dealers cleared The dealer who engenders
the ill will of his customers today will have
plenty of regrets when cars become more
plentiful and dealer competition once more
operates in favor of the purchaser.