New York Dealership to Pay $298,000 After Scamming Customers With Phony VIN Etching

Matt Posky
by Matt Posky

Like all companies, auto dealerships are in the business of making money and dealer-installed options are frequently a good way to markup a vehicle’s final price. While that’s great for shops, new cars don’t really need rustproofing or fabric protection. Of course, that doesn’t keep salesmen from occasionally tacking those services on for a few hundred dollars extra though.

One optional extra you actually may want to take advantage of is VIN etching. While this is something you can do at home for cheap, most dealers will gladly do it for a significantly larger fee. But it doesn’t do you any good if the store doesn’t actually follow through with the service and charges you for it anyway — which is exactly what happened at a Nissan dealership in New York.

Nissan of New Rochelle was caught charging customers for an unwanted VIN etching service that they frequently didn’t even apply to cars. Now the dealer has agreed to pay nearly 300 customers more than a quarter of a million dollars in restitution and issue a public apology for its shady practices.

For the sake of clarity, VIN etching itself isn’t a scam. Engraving a vehicle’s identification number onto the windshield makes those portions of a car less appetizing to thieves hoping to resell them. It’s far from foolproof but VIN etching is recommended by plenty of police and auto insurance agencies as a way to protect against auto theft. Some insurance companies will even offer a discount to the comprehensive portion of your car insurance (or waive your insurance deductibles) if your car is protected by VIN etching.

However, the New York dealership wasn’t providing the service, which it called the “Total Loss Protection Guarantee.” According to Automotive News, investigators found that Nissan of New Rochelle did not bother to etch the VIN onto the vehicle’s windows at all. On some vehicles, the dealer put stickers with registration numbers on the inside the doorjamb where no one could see it, providing no effective theft deterrent. For other vehicles, the dealership provided no stickers or decals whatsoever.

Hundreds of consumers purchased the etching service. The charges ranged from $215 to more than $5,000 and were frequently tacked onto the final sales price without the knowledge or consent of the customers.

Buyers were also promised a guaranteed credit of $3,000 or $5,000 toward the purchase of a new vehicle if theirs was stolen. But numerous conditions in the fine print made the proposed credit essentially useless. One such limitation specified that the dealership could not offer the money if it eliminated the dealership’s profit on the sale.

“There will be an apology letter directly from me to the individuals,” Dealership owner Anthony Panarella told Automotive News.

Panarella said Nissan of New Rochelle had a “less-than-stellar reputation” when he purchased it in 2014. He said he should have vetted the veteran employees better and was forced to fire four as a result of the scam. “This [fraud] was something inherited,” Panarella explained. “I’m 38 years old. When I bought the store I was 35. I was green.”

“I didn’t know anything was going on until there was a problem,” he said. “Things don’t get to our level until the horse is already out of the barn.”

Panarella claimed he immediately cooperated with the investigation when the attorney general’s office notified him of the problem roughly 18 months ago.

With the investigation over, Nissan of New Rochelle has agreed to refund $276,127 to 298 consumers charged for the fraudulent Total Loss Protection. An additional $22,084 in penalties will go to the state of New York.

“Consumers should not have to worry that they are being scammed into adding on bogus products and services when they purchase a car,” New York Attorney General Eric Schneiderman said in a statement. “Buying a car is already a major investment for many families, and tacking on thousands of dollars extra can become a significant financial burden.”

[Image: Kzenon/ Bigstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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4 of 34 comments
  • Maintainer Maintainer on Aug 18, 2017

    “I’m 38 years old. When I bought the store I was 35. I was green.” This brings back some memories. When I was at a Chevy store (1998-99) the SM made us (salesmen) etch the VINs on all the cars, mini vans and most trucks. Sometimes with hilarious results. I was green then too. I knew I made a mistake leaving a Toyota store for Chevy.

  • Dwford Dwford on Aug 18, 2017

    VIN etching is one of those overly expensive, minimal value "services" dealers offer. It's basically a one time fee insurance policy. Most dealers that "offer" it put it on every car automatically, then automatically charge the customer whatever their fee is by having it preprinted on the purchase contract. Most customers just gloss over it and pay without asking, and only the smart ones demand that the fee be waived. Does the VIN etching insurance policy pay out if your vehicle is stolen and not recovered? Yes. But what are the chances of that happening? Not great. In all the years I sold cars, I helped exactly ONE customer get their money from the VIN etch insurance. It was a pain and took weeks, but eventually they did get their money.

    • See 1 previous
    • White Shadow White Shadow on Aug 19, 2017

      @Erikstrawn 30 minutes? Have you ever seen VIN etching? You can do the whole car in less than 10 minutes.

  • Tassos Most people here who think it is a good idea have NO idea how much such a conversion costs. Hint: MORE than buying an entire new car.
  • Zipper69 Current radio ads blare "your local Chrysler, Dodge, Jeep, Ram dealer" and the facias read the same. Is the honeymoon with FIAT over now the 500 and big 500 have stopped selling?
  • Kjhkjlhkjhkljh kljhjkhjklhkjh hmmm get rid of the garbage engine in my chevy, and the garbage under class action lawsuit transmission? sounds good to me
  • ToolGuy Personally I have no idea what anyone in this video is talking about, perhaps someone can explain it to me.
  • ToolGuy Friendly reminder of two indisputable facts: A) Winners buy new vehicles (only losers buy used), and B) New vehicle buyers are geniuses (their vehicle choices prove it):