Packing the Price

For thousands of U.S. car buyers, the secret best kept by dealers is the list price suggested by Detroit. The reason is "price packing," the skilled and corrupt art by which some dealers boost the cost of accessories--from map lights to automatic transmissions--until the car's price is several hundred dollars over list. The dealer then generously offers a hefty "discount," or an inflated trade-in price, giving the customer the illusion that the deal is fantastically good. Last week in Washington, the Justice Department opened an investigation of price packing aimed at indictments under the Sherman Antitrust Act.

A federal grand jury began checking into the books of the capital's Ford, Chevrolet and Chrysler dealers' associations; the Justice Department is investigating others throughout the nation. While packing is not illegal when performed by individual dealers, the jury will investigate complaints of dealer associations' price fixing, which is against the law. The Government suspects that dealers who sell one line are forming area associations to make secret fixes of prices of new cars and trade-ins. By agreeing on the size of the pack, they eliminate competition among themselves.

Another attack on such chiseling by "a few unscrupulous dealers" is being led by Oklahoma's Democratic Senator Mike Monroney. He has sponsored a bill requiring that every new car in a showroom be clearly labeled with the maker's list price. Some Detroit carmakers are privately in favor of the bill as a way of regaining customer trust.

The National Automobile Dealers Association is also in favor of the Monroney bill. In addition, it wants carmakers to set a national list price--and disenfranchise dealers who ignore it--instead of the present practice of different list prices in different areas. But carmakers are not yet ready to go that far. Says retired Rear Admiral Frederick Bell, executive vice president of N.A.D.A.: "We think the Monroney bill is a step in the right direction of taking the razzle-dazzle and hocus-pocus out of auto pricing."

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