NJ State Probe Casts Some Used Car Dealers In Bad Light

TRENTON, N.J. (CBS) - A study conducted by New Jersey's Commission on Investigation paints a rather scathing picture of part of the state's used car industry.

The Commission took a look at eleven used car auto malls, including one in Bridgeton, that were little more than office space for hundreds of firms dealing in wholesaling vehicles, mostly out of state. And it appears the New Jersey Motor Vehicle Commission gave mall landlords special treatment.

"The state's licensing rules and regulations were selectively manipulated to the benefit of these entities at some cost to consumers and the taxpayers," SCI acting Executive Director Lee Seglum told KYW Newsradio.

It all revolves around the licenses those dealers have to get to do business in the state.

"We found that used car dealers based at these multi dealer locations have avoided paying upwards of $10-million worth of taxes," Seglum said.

The commission is urging lawmakers and the Christie administration to tighten up the rules.

In a written response attached to the report, the attorney for the Bridgeton concern suggested state rules do not work well for the firms who rent space from his client, given they are not dealers but wholesalers.