Vulnerable New Yorkers Would be Disproportionately Hurt By Auto Dealers’ Effort to Sideline Brokers
Buying a vehicle is one of the biggest purchases many New Yorkers make in a given year – for some, perhaps in a lifetime. Auto ownership enables individuals to access critical services, attend school, commute to work and generally improve their overall quality of life.
But the process of buying a car presents significant challenges for far too many people. The experience at a traditional auto dealership can be intimidating, filled with confusing data, long wait times and high-pressure sales tactics. For those who come from immigrant communities, have special needs, or don’t speak English well, these challenges are nearly insurmountable.
That’s where an auto broker comes in. A broker serves as the go-between for buyers and dealers. They enable customers to find the best possible deal and conveniently and comfortably locate and purchase or lease a reliable, affordable vehicle that best fits their needs, delivering it right to their front door.
Customers clearly enjoy the freedom of choice and ease that brokers offer. But unfortunately, not all dealers appreciate the benefits brokers provide. A group of wealthy and well-connected dealers and their labor union allies are pushing a bill in Albany that would effectively kill competition and put the brokers out of business.
Since 2014, the dealers and their supporters have contributed more than $2.4 million to elected officials on both sides of the aisle as well as statewide leaders – including Gov. Andrew Cuomo and state Attorney General Letitia James – in a greedy effort to secure a monopoly on car sales that, combined with the current pandemic-induced vehicle shortage, will drive up costs for consumers and marginalize those who rely on brokers to purchase a reliable, affordable vehicle.
As brokers, we provide a critical service to consumers who might feel too intimidated, confused, or pressured by the traditional dealership experience, perhaps due to language barriers, disabilities, gender discrimination, religious observances, or other challenges.
Many of our clients are members of vulnerable communities who will be disenfranchised if they are unable to access our services. Others are hardworking New Yorkers who simply have neither the time nor the inclination to haggle with car dealers, who engage in well documented tactics designed to maximize their profits by duping consumers into spending as much as possible.
Critics of brokers suggest we need to be reined in to combat fraudulent practices. The reality is that thanks to legislation passed three years ago, all brokers are required to be licensed by the state, paying $450 every two years to remain in good standing with the state Department of Motor Vehicles (DMV). Brokers are also required to obtain a $100,000 surety bond, which further protects customers from fraud or misrepresentation.
In addition, few – if any – complaints and fraud allegations have been lodged about unscrupulous brokers with state oversight agencies, while in 2020, 2,561 complaints were filed by consumers against dealers with the state attorney general’s office.
The bill the dealers are pushing, S4332a, would add so many additional requirements and regulations onto New York’s brokers in the name of combatting this supposed widespread fraud that many would be forced to simply close their doors for good.
For example, the measure prevents brokers from being paid for their services and raises the amount of a broker’s surety bond to $250,000, which is two-and-a-half times the amount required for dealers. It also mandates brokers to solicit three bids from dealers on behalf of each customer and creates a private right of action for dealers to enforce the broker law in the courts.
These are just some of the new and onerous requirements to which brokers would be subjected if S4322a is signed into law, placing unnecessary restrictions on these small business owners in a clear effort to prohibit them from operating altogether.
Small businesses are, as Gov. Andrew Cuomo has repeatedly said, the backbone of New York’s economy. The hundreds of brokers operating across the state – many of whom are minority business owners – are contributing to the post-pandemic economic comeback. To eliminate their jobs at this critical time would be counterproductive and hurt the wide array of businesses to which they refer clients – from body shops to detailers and more.
New York’s auto brokers provide consumers with options when they want to buy a vehicle and strive to make their experience as easy and comfortable as possible. It is both unscrupulous and immoral to deny consumers the freedom of choice to make these significant investments. We call on the Senate to reject S4332a, which has passed the Assembly, and stop this harmful, anti-consumer and anti-small business bill in its tracks.
David Friedman has been a broker for three decades; he owns and operates Duo Leasing in Brooklyn. Jeritza Mejia in 2018 founded Inwood Group, an all-woman operated auto sales and financial services company, in Upper Manhattan.