By on August 17, 2017

car salesman in car dealership with key, Image: Kzenon/Bigstock

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]

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34 Comments on “New York Dealership to Pay $298,000 After Scamming Customers With Phony VIN Etching...”

  • avatar

    “I didn’t know anything was going on until there was a problem”

    Panarella sounds like an Italian name, but he still could be related to Sgt Schultz…

  • avatar
    SCE to AUX

    “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.”

    I guess not everybody reads their bill of sale.

  • avatar

    Always good to see the stock photos on TTAC.

  • avatar

    “Need more vetting of Italians. Another dealer SCAM in my home state. Unbelievable. Demanding @SCOTUS uphold travel ban against Italy!!”


  • avatar
    dash riprock

    “One such limitation specified that the dealership could not offer the money if it eliminated the dealership’s profit on the sale.”

    Best small print ever.

    • 0 avatar
      Land Ark

      I actually had a physical reaction to that line when I read it.

      Thank you for protecting us, car dealerships, from the terrible things that would happen if we bought direct from the manufacturer.

  • avatar
    Steve Lynch

    Manufacturers have little to no control over their dealers. However in this case Nissan had a tremendous opportunity to get a better operator but instead approved this idiot to buy the store so they must share the blame.

  • avatar

    Nissan. The new Mitsubishi.

  • avatar
    Felix Hoenikker

    Isn’t a similar scam still being carried out in the US Southeast by the Toyota distributor? Just when US consumers were starting to get some measure of consumer protection against this type of fraud, we get a fraud in Washington (not mentioning any names here) who would love to eliminate the hard won progress made over the last decade.
    Not to be political, but the sooner we impeach, the sooner we can get the neo Nazis and fraudsters out of the limelight.

    • 0 avatar

      What a load of crap. We had neo-nazis and fraudsters well before Trump was elected, they are not new on the scene. (Don’t you remember Skokie? Did you call for the impeachment of Jimmy Carter because of that? Do you think dealers have only this year started to run scams and previously they had been scrupulously honest?) I for one fully support President Trump. What we need to do is get rid of as many leftists as possible.

      • 0 avatar

        Well, maybe, but I would prefer actual enforcement of the rule of law. This would involve the arrest and trial of, well, most of the “swamp”. I notice this is not happening and the swamp gets to go on lying, sowing division, killing people, and most importantly, making money.

        Hang ’em high.

    • 0 avatar

      Neo Nazis? You mean Antifa?

    • 0 avatar

      Anyone can name a dealer operated by a Nazi? It appears that ripping off customers is now equated to mass executions in the deranged minds of Anarchist lefties.

    • 0 avatar

      You’re going to impeach him based on what crime? If you like mob rule and summary justice, go to the Middle East or Somalia.

    • 0 avatar

      Clearly, voters in the majority of the states didn’t agree with the decade of progress you refer to.

      • 0 avatar
        30-mile fetch

        Clearly, a majority of white supremacists and the swamp creature they carry upon their shoulders don’t either. But the majority of voters don’t care for either of them. Clearly.

  • avatar

    Its sleezy Nissan, Honda, Jeep etc dealers that have me sticking with Acura, Benz, Lexus and Infiniti for vehicles they seem treat people far better at least in my area.

  • avatar

    Statewide I bet it’s just the tip of the iceberg. I bet most dealerships see what they can get away with on an individual customer basis.

  • avatar
    tod stiles

    The I didn’t know what was happening defense? FFS, really? Well I guess if we could do away with all the pest-like lawyers and regulations this kind of thing wouldn’t happen.

    Oh and let’s not forget to lower the tax rate for people like this. They’d probably be handing customers cash from their own pockets after hiring all those new people.

  • avatar

    I gave up and completely refuse to go into a car showroom. They are about the lowest of the low. Solution? My family has had a terrific mechanic named Emilio for over 25 years. When I feel I need a new car he looks out for one and always comes through. You have one honest man dealing with another honest man. If they put cars on Amazon, though, I might be tempted.

  • avatar

    I love a happy story. Thanks for sharing.

  • avatar

    Or tries to charge you for it already being on the car to begin with. When I bought my 2004 Mitsubishi Lancer Sportback Ralliart (the longest vehicle name ever!), I noticed when I test-drove it that it had the VIN etching. I didn’t buy that day, but as I always attempt to do, went home to think it over and talk to the big boss about the purchase. Went back a few days later to make the deal (this was in 2010 and small wagons weren’t exactly flying off the lots. It was lost in a sea of pick-up trucks and SUVs), the dealer had added a line item for the VIN etching (several hundred dollars, if I recall). After the salesman made his pitch about how great VIN etching is and how they’re so proud of providing that service (which I never asked for), I politely told him that the charge was BS as the etching was on the car when I test drove it. They removed the charge…

  • avatar

    “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.

  • avatar

    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.

    • 0 avatar

      I imagine the reason the dealership is in trouble is they pay intern technicians $10 per car for 30 minutes of work to etch the VIN. They do it on every car and push the upsell. The interns quickly figured out that nobody checked to see if they were actually doing the work.
      They were mostly right, only the customers checked to see if the VINs were there.

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