Dealership Tells Customer Abitration Is Awesome For Corporations

Sean writes: “The wife and I were purchasing a car this weekend. After the typical pulling of teeth to get a price quote over email, we headed into the dealership on Saturday to finalize the deal. We were finally ushered into the finance guy’s office, pitched the warranty, gap insurance, etc., and got to the contract itself. I looked over the agreement and saw the ‘binding arbitration’ clause. Knowing it wasn’t a battle I could win, nor an issue I could avoid by shopping elsewhere, I let it go with a simple, “I don’t like the binding arbitration clause.” To my surprise, he responded, “Arbitration is the best thing invented for corporations!”

I looked at him incredulously. “Absolutely!” I responded. “For corporations. The consumer is stripped of their rights and forced into a process that rules against them over 90% of the time.”

He counters with decreased legal fees and other selling points, and then hits me with the killer, “If you get an unbiased arbiter, it’s the ideal solution.”

Do you agree now he’s just asking for it?

“There’s the issue,” I replied. “The consumer doesn’t get an unbiased arbiter. The arbiter is chosen by the corporation, and those who don’t give the corporation the ruling they want are not chosen again.”

He went back to the unbiased point again. He apparently wasn’t going to be able to see it from the consumer’s side, so I gave up.

But at that point I knew…had it just been me in that dealership, I’d have walked. But my wife has to put up with a lot of my arguments of principle, and this one would have cost her a shiny new vehicle.

(bonus: The first time he made the ‘unbiased’ argument, he couldn’t remember the word ‘unbiased’. I had to prompt him.)

– Sean

Ha! At least he was telling the truth. “Best thing invented for corporations.” Maybe he thought if he sounded excited about it you would be swayed?

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9 Reasons To Ban Mandatory Binding Arbitration


Edit Your Comment

  1. WhirlyBird says:

    Arbitration is evil, and the OP is whipped. Here’s wishing them all the best of luck with their car deal.

  2. so, umm… did he sign the document? if he did, then, what’s the point the article? why am i even posting this comment?

  3. Buran says:

    You are a great example of why this crap continues: you sit there and you tell them why you hate it … and then you SIGN ANYWAY.

    You should have walked. It’s not like thousands of other dealerships around the country don’t also sell shiny new vehicles.

  4. Snarkysnake says:

    By taking that “shiny new vehicle” home, you made it harder for every other customer that objects to their constitutional rights being stripped away to get that arbitration clause struck.You rewarded that slimy dealer for slipping that in there at the end by NOT walking .Thanks.

    Arbitration math:

    If you had went to another dealer and bought the same car without the arbitration agreement,you would have possibly paid more. Simple enough. But…If you ever have a dispute with this dealer, your odds of winning in their rigged court are far less than 5 out of a hundred.Personally , I like my odds better at a dealer that has no Arbitration Clause…

  5. DeeJayQueue says:

    @Buran: And as a consumerist reader you should already know that they ALL have arbitration clauses in the financing agreements. Plus you try telling your wife that she can’t have a new car because of a principle, based on something that might happen down the road.

  6. lostalaska says:

    “Arbitration is the best thing invented for corporations!” …for corporations indeed *sigh*

  7. B says:

    Should have used a credit union.
    Seriously, if the arbitration clause was on the financing, not the car purchase, getting the financing ahead of time with a bank/CU/Institution that doesn’t require arbitration could have avoided this.

  8. unklegwar says:

    @DeeJayQueue: “Try telling your wife…”?!

    Are you married to a 3 year old who can’t understand WHY she can’t ahve something she wants? Is she gonna hold her breath? Stomp her feet and cause a scene?

    I agree with Buran. I’ll even extend it to say that some people have the same problem with the wife. They give in, so the wife learns that “I want I want I WANT!” is the way to think and act.

  9. unklegwar says:

    The writer has a wife problem too. “It would have cost her a shiny new vehicle”. Ugh.

    See, getting that Shiny new vehicle COSTS you. Not getting it SAVES you.

    Shiny things. Effective in attracting birds, fish, and spouses.

  10. Murph1908 says:

    Anyone who is married knows very well that you pick your battles.

  11. unklegwar says:

    Sounds like I’d rather have the arbitration clause than the marriage contract!

  12. Applekid ┬──┬ ノ( ゜-゜ノ) says:

    @unklegwar: Because marriage is a compromise and, according to the quote, she’s already had to give up her side on his principles a bunch of times already. There are some couples that see eye to eye on arguments of principle but that kind of 100% compatibility is very rare.

    Oh, and minus points. “… the wife learns … the way to think and act” is probably the most mysogynistic thing I’ve read today. Terrible.

    Please revisit your opinion when you actually meet a girl and decide to stop charing that He-Man Woman-Haters Club of yours from your parent’s basement.

  13. hubris says:

    That’s why you buy stuff in cold, hard cash. Screw financing.

  14. m4ximusprim3 says:

    @Murph1908: I’m betting most of them aren’t married.

  15. hubris says:

    @Applekid: As worded it’s pretty sexist. But the sentiment is true of any human being, regardless of gender. IF you do something and you get your way, what’s going to stop you from doing that in the future?

  16. Randy says:

    Why bother with a “shiny new vehicle” that loses most of its value within a few years? Get a solid, reliable used car that’s been throughly checked out by a reputable mechanic.

    The plus side is that you will already know most of that model’s defects and chances are, they’ve been fixed already.

    The negative side is that it’s not quite as “shiny”. I swear, being obsessed over looks is moronic at best. If it runs well, gets you where you want to be, has few problems, what’s the problem.

    If you’re gonna knuckle under pressure to sign an arbitration agreement, you deserve what you get. I’d rather take my chances on buying a car from someone who isn’t a dealer and have it checked out, with a carfax report.

    That way, if you do run into problems, you can sue the hell outta the seller, assuming you weren’t dumb enough to buy “as-is”.

  17. Murph1908 says:

    BTW, I am the OP, and looking back I did make my wife come across rather shallow. That wasn’t the scene at all. Weeks of looking, days of negotiating, hours of waiting at the dealership. It’s not a point where she would have appreciated me fighting for my consumer rights.

    She has endured many of my fights over seemingly inconsequential points. It was better to let this one go.

    Plus, she’s pregnant, and we needed the larger vehicle.

  18. Murph1908 says:

    Thanks Apple. I owe you a beer.

  19. Murph1908 says:

    You too.

  20. ethanrik says:

    What dealer is that? I would have gotten up and walked away…there are always better deals out there to be had.

  21. bohemian says:

    I’m the female version of Murph1908. I have made my husband endure more than a few debates with salespeople on major purchases and deals. He used to get really annoyed with me and thought I was just being difficult or making him look bad. Over the years though he has decided to let me be the bad one, demand answers and walk out if something doesn’t seem right. My over suspect questioning has saved us some major mistakes.

    Vehicles, tvs, houses, none are in short supply in this country.

  22. Diet-Orange-Soda says:

    “[My] wife has to put up with a lot of my arguments of principle, and this one would have cost her a shiny new vehicle.”

    Haha. That’s exactly how I feel. The only reason we’re still paying $50 / month for television service is so she can veg out and watch Food Network.

  23. Hanke says:

    @Buran: Every dealership does it. That’s the point he made that STARTED the discussion with the dealer. Yeah, other places can sell you a car, but the terms are all the same, the only difference is the name of the manufacturer.

  24. rlue says:

    There are lots of ways out of this situation:

    1) Buy used, from an individual owner.

    2) Ride a bicycle (that’s what I do).

    2a) If your commute is long, move to a denser community. Then, ride a bicycle.

    3) Marry someone else.

    Note that finding a dealership without a binding arbitration clause in its contracts is not one; if you think that’s feasible, good luck to you.

    As for everyone griping about spoiled wives, pull your heads out of your asses. Human adults are not dogs or children; they do not respond well to the principles of behavioral conditioning you learn about in Introduction to Psychology. The OP was clearly being a little facetious about his phrasing: denying his wife a shiny new vehicle meant, more broadly, a luxury and status symbol that has probably become de rigueur for their lifestyle, culture, and even profession. So what I mean by “Marry someone else” is, if that’s not your game, don’t play it.

  25. thatgirlinnewyork says:

    It’s not like there aren’t other places one could purchase a “shiny new vehicle”–surely this place has competitors.

  26. Buran says:

    @DeeJayQueue: Yes, you CAN have a new car, just not one from that particular dealership.

    Did this guy even TRY to shop around? Yes, you can get a car without an arbitration clause. You just find a dealer/seller who will work with you. Does it take work to not get bent over? Sure. But do you really want it to bite you later? Seems to me like laziness wins out again — which just allows this stuff to continue.

  27. IrisMR says:

    “We know it’s great for us and I just KNOW we’ve got you by the balls. Now sign.”

    Oh well, honest guy isn’t it.

  28. Buran says:

    @Hanke: Oh really? Then, as I said in the other comment I just made, why do we hear of people who say “I don’t want to sign this as it is/at all” and don’t ever agree to arbitration? Again, stop letting the “everyone does it” enabling mentality get to your head, and do your homework.

  29. clevershark says:

    @Buran: “You are a great example of why this crap continues: you sit there and you tell them why you hate it … and then you SIGN ANYWAY.”

    You see a lot of that stuff on this site — either the arbitration bit, or a guy who has an incredibly frustrating experience at a store and ends up buying something there anyway during the same visit.

    I prefer to take my business elsewhere. It’s not like there’s a shortage of stores or car dealerships smarting for business these days. Let them work a little bit for my patronage, I say.

  30. Buran says:

    @Murph1908: So explain how exactly that necessitates a larger vehicle, and how exactly going to another dealer selling the vehicle you already decided on, which would take all of an hour to a day, is not preferable to signing away your rights FOR LIFE — that agreement will NEVER time out, and you’re screwed if you later realize you were cheated.

  31. Buran says:

    @clevershark: Yeah, no kidding. We (rightly) whine and complain about injustices like arbitration, and then we turn around and ALLOW IT TO HAPPEN. I’ll keep skewering those who do it, because their spinelessness just causes pain for the rest of us because they refuse to stand up and fight for what’s right since they have to get home to watch American Idol. Sad, sad, sad.

  32. TechnoDestructo says:

    I’d say this whole story was made up, but I’ve encountered some incredibly stupid car salesmen myself.

  33. Dashrashi says:

    @unklegwar: This is nasty and unpleasant. Applekid is totally right about you. Why do you assume that he gets to call the shots, and that she needs to have things explained for her like a child?

  34. trujunglist says:


    He signed away his rights, for life, when he got married. You were talking about marriage right?

  35. Notsewfast says:

    You know… This site’s commenters (along with a lot of Gawker’s) has really begun to slide downhill since posting was opened up en masse.

    I used to enjoy reading around here and posting when I had some down time. I feel like this has become just like every other place on the internet: Populated by 16 year old boys who just want to argue because they think they are smarter than everyone else because they can read Wikipedia.

    I’m getting close to being done around here…

  36. Consumer007 says:

    I would have told the guy: Okay, so give me one good reason if I’m in my right mind I should sign it at all beside just helping you make your commission target…but he has a point, the wife might have dug that big stiletto heel right in his instep, smiling, taking the papers and saying “that’s okay, we’re ready to sign now”….ahhh marriage.

  37. zumdish says:

    I was just in a similar situation, buying a new truck, but the arbitration clause wasn’t in the dealer contract, it was with the manufacturer’s financing. Under other conditions I might have balked, but it was a 0% incentive deal. I could’ve paid cash, but figured why not keep my money invested and earning interest and use their money for free. So I held my nose and overlooked it.

    Felt guilty though.

  38. AlexPDL says:

    Uhmmmm hasn’t anyone noticed the HUGE typo in the headline? Its aRbitration, not abitration. :-)

  39. DeeJayQueue says:

    @Buran: Do I need to remind you of the article posted here not too long ago about the lady who tried to buy a car from every dealership she could, and when none would offer her a deal without arbitration she decided on a private deal with someone else, only to find that her BANK had an arbitration clause written into the loan?

    Apparently I do, so here:

    This lady DID her homework, and STILL couldn’t get away without arbitration.

    Face it, consumers have no power here. When faced with a choice of “do I buy a car with an arbitration clause or do I walk 20 miles to work?” Guess which choice most people will take. Oh, and your next thought of “Well, you shouldn’t live 20 miles from where you work” doesn’t help either, and doesn’t fix the need for a car. Unless you live in a city, or an area with a great public transit system, or otherwise orchestrate your life deliberately around not having a car, you’re pretty much going to need one to get around. If you did that, that’s great but it’s not the answer for everyone.

    @unklegwar: You’ve obviously never been married, or in a long term relationship. Sometimes giving in on a principle and dodging an argument comes WAY before losing a car deal over a clause in a contract. You have to pick your battles.

  40. D.B. Cooper-Nichol says:

    Ah, the weekly Darth Arbitration post, complete with unchallenged misstatement. This time, it’s the statement that the corporation picks the arbitrator. They don’t, so long as the other party shows up. There may be a panel to pick from, and there might be problems with that process, but it’s not a situation where “the corporation” just goes out and picks their buddy and the other party just has to live with them.

  41. Jean-Baptiste Emanuel Zorg says:

    For everyone going on about how he should have walked rather than cave and buy the car anyway, you need to go and read this article

    The upshot is that after a month of searching, they were unable to find even one dealership that didn’t have an MBA clause in their sales agreement.

    Not one.

    Welcome to corporate America

  42. Jean-Baptiste Emanuel Zorg says:

    @DeeJayQueue: Dammit, that’s what I get for posting before reading all the comments.

  43. Buran says:

    @DeeJayQueue: I guess you didn’t read the comments where I said that people can, do, and have manage/managed to avoid arbitration clauses. Somebody who didn’t do all their homework or apparently try all that hard is not proof that “everyone does it” when there are obviously exceptions, therefore, not “everyone does it”.

  44. Skeptic says:

    BY D.B. COOPER-NICHOL AT 02/12/08 09:26 PMbut it’s not a situation where “the corporation” just goes out and picks their buddy and the other party just has to live with them.

    For practical purposes It is actually pretty close to that, especially since the corporation specifies the arbitration association in the contract. Additionally, the corporation knows the outcome of many cases and who arbtrated them whereas the consumer does not because the arbitration happens in secret and only repeat customers have the inside information.

    MBA is inherently unfair to consumers. Binding Arbitration should only be allowed as a choice between equal parties as an alternative to court after a dispute has arisen. If it is such a great deal for all parties then people will choose it. But you know it is not and that consumers do not choose MBA, it is forced on them by companies. Go elsewhere you say? As noted in this thread, that is often not possible. The real choice is to change the law.

  45. DeeJayQueue says:

    @Buran: Ok, so where are your sources? Who are these people doing it and where are they doing it? How often is it done? How long ago? Which dealerships exactly do not include arbitration clauses in their sales/financing agreements?
    Or are you, as usual, talking out of your ass again?

    I didn’t say everyone does it. I said that enough companies DO do it that it makes it unviable and in most cases impossible to get around it. Either via the sales agreement with the dealer or the financing arrangement with the bank, the odds are staggering that you’ll be able to negotiate a car deal without one.

    Unless you luck out on your first try, spending the time and effort necessary to find someone in your area who will sell you a car without an arbitration clause is just not feasible compared to the chance you’ll ever have to use it, and the hassle and expense you’ll have to go through to find and deal with someone like this.

  46. backbroken says:

    Um…so your wife is too stoopid to understand why arbitration agreements are bad? Is that the point of this article?

    Or is the point of the article that your wife is too greedy to care about your principles?

    In the future, cross out the arbitration clause, initial it, then tell the guy on the other side of the desk to initial it. If he refuses, walk out. They won’t risk losing the sale, trust me.

  47. Consumer007 says:

    Backbroke~ Maybe I’m the ultimate consumer-cynic, but I’m not so sure any more (about dealership agreeing to cancel Arbitration clause). I have seen a very disturbing rise in lawyering, busybodyism, and circle the wagons against all consumers, always, in more and more industries and more and more ways. Even if the salesman said yes, I bet you it wouldn’t fly and the finance manager would call a day or two later and say “I’m so sorry, I’m sure you understand, but we just can’t take the chance and expose ourselves to this kind of risk – after all, you are obviously ONE OF THOSE PEOPLE who might actually find defects in the car and sue us, and we can’t have that. You see, consumers aren’t allowed to be educated, have any information, or have brains and spines in our get lost!”

    I have just seen too many cases in different industries across the board where making sales doesn’t matter anymore – the priority is FINES, FEES, and MAKING SURE the customer doesn’t EVER get their way, EVER. That’s their POLICY, you see…to punish customers. I don’t know who the consultants are that design things this way, but they need to be put in prison, because they are very succesfuly crafting a virtual consumer concentration camp for each and every one of us…it’s called collusion…every company in an industry does it (makes it a industry standard “best practice” and you are SCUH-REWD.

    I am VERY glad that this site exists to help those of us with common sense fight against this wherever we can…it does give one hope that enough of us get mad and we can keep the busybody anti-consumer consultants at bay…

  48. Roycester says:

    Can’t help but chime in with the best educational website on arb…

  49. BrienBear Thinks Stupidity Defies Logic says:

    My question, to all the people whining about how he gave in to the arbitration clause is, how, exactly, is him walking away from this deal, going to help anyone else?

    Just because I say, “hey, I’m not signing your facking agreement without nixing the arbitration clause” isn’t magically making people stop.

    Yeah, they suck. But not enough people in this country know to avoid them like the plague. They aren’t going to go away. Now if the rest of the country started reading consumerist, we might get somewhere. But most people are ignorant, and, quite honestly, dont give a sh*t about what possibly might happen sometime in the future… maybe.

  50. Buran says:

    @DeeJayQueue: Oh, so I’m “talking out my ass” when I tell the truth when I say I know I’ve heard of it being done? I don’t keep a verbatim browsing history of every site I’ve ever visited, but trust me, I’m not talking out my ass here. I’ve read the stories. If you want to accuse me of lying, fine, but I’m not. “As usual”? Huh? If you have proof that I lie every time I post, please enlighten us, but you can’t, so you’re just trying to smear me because you think I’m lying and that this crap is everywhere. That’s what businesses want us to think so we won’t fight back.

    You say that it’s not worth the time and hassle. I say it is, because it doesn’t really take that much effort to pick up the phone and spend five minutes per dealer calling around to find one that won’t make you sign such an agreement BEFORE you go over there, it doesn’t take that much effort to do the same with banks, and in most large cities there are literally hundreds of dealers that are in the car-selling business.

    It’s very much worth the hassle when you realize that you are signing away your valuable right to trial by jury, something that people fought and died for once upon a time but now we’re too lazy (as the original post shows) to give a damn. No, this is one fight that is very very much worth not giving up on.

    Or am I talking out my ass when I say that basic civil rights afforded by the Constitution are worth fighting for?

    That kind of attitude is a huge part of what’s wrong with America these days, and I don’t like it. If you want to be petty and give up your rights, expect that other people will not be happy with your caving and making it harder for the rest of us to exercise them.

  51. Buran says:

    @trujunglist: Nope.

  52. DeeJayQueue says:

    @Buran: Ok, so you know you’ve heard of it being done. That’s great, but you have nothing to back up your story. I believe that in some cases it can happen, the stars align and the heavens open and once in a while someone gets a deal without having to agree to the arbitration clause. There are exceptions to every rule, I’ll give you that.

    I never said it didn’t suck that we all seem to have given up our rights to sue the crap out of whomever we feel we’ve been wronged by.

    Smart people already spend loads of time narrowing down their selections before deciding on which car to buy, thus narrowing down the list of dealerships from which to buy said car. Those “hundreds of dealerships” can become a scant handful quickly if want or need a certain brand/model vehicle based on other factors like price, features, reliability, etc. The ability to sue the dealership falls way down the list when compared to all those other factors that people consider when buying a new car.

    I’m with you that it sucks that we give up our rights so easily. But you have to admit that it’s just not practical, feasible, or in most cases possible to escape arbitration clauses. The best we as consumers can hope for is to change the law itself by electing more progressive pro-consumer people into power.

    What I’m saying is, there are better and more effective ways to fight this fight. Cars in our society are a necessity, and as such the people who sell them hold all the cards.

  53. econobiker says:

    @Murph1908: I think he did what he had to do especially given his statement about his wife putting up with it plus the gal is pregnant…

    The key here is to start a company called Unbiased Arbitrators so that companies will flock to it.

  54. dualityshift says:

    The OP has no principles if he bended to the whim of his wife’s desire for a new vehicle. If you don’t like arbitration, don’t do business with business that uses arbitration.

    There is no such thing as a mostly moral person. Stand by your convictions or don’t, but don’t use your wife as a shield.

  55. Buran says:

    @DeeJayQueue: Fair enough. The only reason I don’t have it is that my browsing history only goes back so far, and I read the story longer than two weeks ago. I might have read it here, but I might not have; if I could remember details, I would have posted it for sure. I should probably tell my browser to store the history for longer in case it comes up again.

    I do think people should try harder before giving up, though. If arbitration is that much of an issue, and it should be, don’t rule out buying from a dealer in another state.

    And I’m sorry if I misread what you were trying to say. It’s just that I feel really strongly about corporations hating their customers enough that they have to cut us off at the knees and set themselves up to screw us and get away with it … and people don’t fight hard enough.

  56. MPHinPgh says:

    @unklegwar: I’m guessing you’re not married. Apparently several other posters are similarly single.

    You call it whipped, I call it keeping peace in the family. If there WAS another dealer to go to, who didn’t force the arbitration clause, you might all have an argument. But since virtually ALL dealers DO have arbitration clauses, it’s moot.

    Sounds like a lot of you talk rough and tough. I’d really like to see what you would DO in the same situation.

  57. MPHinPgh says:

    @MPHinPgh: Actually, I wasn’t trying to single out Unklegwar. His was just the post I replied to since so many were chanting “Tell the wife to shut up”…

  58. Rusted says:

    @BrienBear: How is it one guy walikung away from an arbitration deal gonna help? Because if you add that one and more people start doing it, they will learn to stop doing silly stuff that.

    Noncompete agreements are worse. I walked away from a job that I just got over all the hurdles for because I would have signed all my rights away. Ain’t gonna happen.