Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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Attorney General Files Agreement With Delon Olds Company Of Salem

January 29, 2003

Attorney General Hardy Myers today filed a settlement agreement with a prominent Salem car dealer for selling used cars as new and failing to disclose prior use. Named in an Assurance of Voluntary Compliance filed today in Marion County Circuit Court is Delon Olds Company that does business in Salem as Delon BMW. The company admits no violation of law.

"Disclosure is a key word for consumers when buying new or used cars," Myers said. "A fair agreement can only be made when both the buyer and the seller are aware of the vehicle's entire history."

Acting on a complaint filed by a Delon BMW customer, Department of Justice investigators found that Delon was selling used BMWs as new under its European Delivery Program. The program was started by Delon several years ago in order to obtain more BMW vehicles to sell in the U.S. According to Delon officials, friends and family would go to Germany to pick up European Delivery vehicles, which Delon ordered in the names of the individuals but which were paid for by the dealer. Those individuals were then allowed to drive the vehicles while on vacation in Europe and upon their return to the U.S., the cars were shipped to Delon.

Delon then sold the cars as new vehicles, disclosing that they were European Delivery Program cars, and disclosing the mileage, but not telling the customers that the cars had been driven all over Europe by someone on vacation. Under Oregon case law, Weigel v. Ron Tonkin Chevrolet, the court stated that if a car was given to someone to drive for their own discretionary use then it would be considered used.

Justice investigators researched the sales of all European Delivery BMWs sold in Oregon over the last two years and found that the practice of non-disclosure only happened at Delon.

Under the assurance, Delon will pay restitution to buyers under the European Delivery Program with each to receive one-half of the difference between the European Delivery purchase price and the price they paid. The restitution formula was based on the actual price paid and profit made on each vehicle.

Delon paid approximately $17,455 in restitution and paid $12,500 to Justice for its Consumer Protection and Education Fund.

Delon agreed to fully disclose all the terms of the European Delivery Program to consumers purchasing cars through that program including the nature of any prior use. The company also agreed to not violate Oregon's consumer protection laws.

Consumers wanting to know about buying new and used cars may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392. Justice is online at www.doj.state.or.us.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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