Dealer Fraud

Buying a used car today in Southern California can be a confusing and complicated process. And if you don’t do your homework before you buy the car, you might end up with a car you don’t want–a car you can’t afford–or a car that doesn’t work right.
Before you buy a used car, protect yourself by taking these key steps:
Step #1: Inspection. Have the car inspected by a mechanic you trust who does not work for the car’s seller. If the seller refuses to allow you to have the car inspected, don’t buy it.
Step #2: Warranty. Get a written warranty for the car you buy, if possible.
Step #3: Writing. If the seller tells you the car is in good mechanical condition, make sure the seller puts those statements in writing. If the seller’s representations are only verbal, you may have a hard time proving that you were misled about the car’s condition.
Step #4: Length of Contract. If you intend to finance the car, don’t sign a contract to pay for a car that won’t be around for the time it takes you to pay it off. Remember, if you agree to pay for the car over a period of five years, but the car lasts for only three years, you still have to pay the balance of the loan, even if the car no longer runs.
Step #5: Financing. Shop around for financing before you buy the car. Many car dealers have relationships with finance companies they want you to use. However, if you can get a better deal elsewhere — such as at a credit union or bank — you’re wise to do so. Don’t forget, if your credit is bad, the interest rate you will be asked to pay may be very high.
Step #6: Changing the Terms. If you sign a contract to buy a used car and the seller later tells you that you have to pay more for the vehicle than agreed, you don’t have to do it. You have the right to demand your money back or insist on the terms you agreed to.
Step #7: Monthly Payments. Don’t base your purchase on the amount of money you can afford to pay each month for the car. First, negotiate a fair price for the car and talk about the financing later. Remember, if you can afford the car you want only by financing over too long a period of time, you may be making a bad deal.
Step #8: Manufacturer’s Warranty. Even if you bought a used vehicle, you still have rights in California. If the vehicle is fairly new, its original manufacturer’s warranty may still apply and will allow you to bring a lemon law claim. If the vehicle came with a dealer’s warranty, you can also bring a claim that the warranty has been violated. If the vehicle came with no warranty — that is, if it was sold “as is” — or with a service contract, you may still be able to bring a claim for used car fraud.

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[ To Learn more our services and areas of practice, please visit our website at www.DealerFraud.org]

Even if you bought a used vehicle, you still have rights in California. If the vehicle is fairly new, its original manufacturer’s warranty may still apply and will allow you to bring a lemon law claim. If the vehicle came with a dealer’s warranty, you can also bring a claim that the warranty has been violated. If the vehicle came with no warranty — that is, if it was sold "as is" — or with a service contract, you may still be able to bring a claim for used car fraud.
Used car fraud is forbidden by the California Consumer Legal Remedies Act, which prohibits used-vehicle dealers and most other retailers in California from using unfair and deceptive business practices to sell their goods. That means dealers may not lie to or mislead customers. They are also legally obligated to disclose any material defect in the car, which includes a past wreck or a former life as a rental. If you ask a question, dealers must tell the truth, even if the truth is that they don’t know the answer. If dealers are advertising their cars as fully serviced and inspected, they have a legal obligation to actually inspect it, fix material defects and disclose any remaining problems. You also have the right to get the car inspected before you buy.
Common types of used car fraud include:
Rolling back the odometer.
Not disclosing that the car is a "lemon buyback" that the original owner returned for a refund.
Not disclosing that the vehicle has a "salvage title."
Not disclosing that the vehicle used to be a rental, a demonstrator or was previously sold and returned.
Quoting a lower price than the one on the contract, or charging you for features you were told were free.
Contracts that are incorrectly dated, forged or not provided to you.

Victims of used-car fraud should go to the dealer first to ask for a refund or exchange (or any service you’re entitled to under a contract or warranty). If the dealer won’t play fair, you may have to file a lawsuit to get your money back. You have three years from the day you bought the car to bring such a claim. In a used-car fraud lawsuit, you can recover what you paid for the car and all of its repairs; any money you paid for alternative transportation and other costs caused by the lemon; attorneys’ fees; and anything else the court thinks is fair. In cases of extremely illegal behavior by dealers who knew better, you may be able to get punitive damages, which are designed to punish wrongdoers financially, as well.
If you’re a victim of used-car fraud contact us.

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[ To Learn more our services and areas of practice, please visit our website at www.DealerFraud.org]

If you are ready to buy a used car, there are some things to look for when you visit the dealer.

Look for a Buyer’s Guide on the Car You Are Considering.
The guide is a requirement of the Federal Trade Commission (FTC). It is designed as a protection against used car fraud.

The guide should be clearly posted on the vehicle. If it isn’t, ask the dealer to provide it for your review.

According to the FTC, the Buyer’s Guide includes useful information such as:
• How the car is being sold (as-is or under warranty).
• How much you can expect the dealer to contribute to repair costs if the car is still under warranty.

The guide also offers useful advice. Buyers should:
• Obtain written documentation of any promises or agreements.
• Retain a copy of the Buyer’s Guide for future reference.
• Have the used car inspected by a qualified mechanic before purchase.

The Buyer’s Guide may include a signature line, which the seller uses as proof of the buyer’s receipt of the document. As always, be sure you read every word before you sign. Finally, (listed on the back) the Buyer’s Guide should include:
• The name and address of the dealership.
• The name and address of appropriate contacts if you think you are the victim of a car dealer scam.

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[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

Purchasing a used car online can be a terrific choice in terms of selection and convenience. However, car buying scams are one drawback of online used car purchases. If you are considering buying a used car via the Internet, here are some tips to help you avoid car buying scams.

Choose Your Own Escrow Service
When you purchase online, an escrow service is supposed to be your guarantee that the seller doesn’t take your money and run. If the dealer suggests or demands that you use a specific escrow service, do not move forward with the deal.

Avoid Any Deal That “Seems to Good to be True”
Common sense? That old adage is a good way to avoid used car fraud. Sure, we all want to get something for little or nothing but greed and/or naiveté is a sure way to get nothing at all.

Research the Escrow Service First
There are simple steps you can take to protect yourself from used car fraud when you are buying online.

• Check with the Better Business Bureau for all parties you intend to conduct business with. You may also check with the Secretary of State to be sure the agency is registered and in good standing.
• Review associated websites carefully. Look for sites that are professional and responsive. For example, are there any misspelled words? When you send an email with a question or comment, do you receive a response?
Car buying scams don’t happen to everyone. Most often, used car buying experiences are positive. You have a better chance of avoiding used car fraud with research and patience. Buy with your eyes wide open.

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[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]