Running afoul of Alaska state law may prove to be an expensive proposition for Lithia Motors Inc.
The nation's eighth-largest auto retailer, based in Medford, may have to pay a $500,000 civil penalty and refund $200 each to possibly thousands of auto buyers who purchased cars from nine Lithia dealerships Oct. 1, 2002, and later.
According to a story in the Anchorage Daily News, the Alaska Department of Law accused Lithia dealerships of illegally charging fees to prepare documents for buyers and failing to disclose accident and repair information on trade-in cars it sells.
The half-million dollar fine would be the highest civil penalty ever dealt to an auto dealership in Alaska.
Alaska law prohibits adding on additional fees above a car's advertised price.
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Lithia attorney Joe Davis told the Daily News that the company cooperated with the state throughout the investigation.
"As soon as this issue was brought to our attention we worked cooperatively with the attorney general's office to resolve the matter," said Davis, Lithia's senior counsel, in an e-mail.
"Lithia has always been, and will continue to be, committed to treating its customers fairly."
Lithia arrived in Alaska in 2001 and started buying up local dealerships. Its brands include Chrysler, Jeep, Dodge, Hyundai, BMW, Chevrolet, Cadillac and Saab.
Jan Margosian, a spokesperson for the Oregon Attorney General's office, said the Oregon Administrative Rules on the matter are undergoing changes to reflect a similar approach.
"The big difference is that a consumer used to be able to prepare and file his or her own documents with DMV but now they cannot," Margosian said. Tuesday. "Also, the vehicle dealer may or may not elect to prepare necessary documents."
Dealers can charge $75 if they elect to prepare on-line documents.
Reach reporter Greg Stiles at 776-4463 or at business@mailtribune.com
