Dealer Fraud

Used car fraud becomes more and more prevalent. Vehicle cloning is one of those wide-spread scams. Here is how it works. Thieves steal a car, usually a high-end “desirable” car or SUV. Then they take the vehicle identification number or VIN from a similar car and slap it on the stolen car. Because each VIN is unique like a fingerprint, the stolen vehicle becomes a clone of a legitimate vehicle. Add some fake papers, and the thieves are ready to sell you a vehicle that looks perfectly legal.

When the police come knocking on your door, you have no legal recourse – you have to hand over the stolen property. Statistics show that such stories are happening to more and more people ever year.
But you can avoid being a victim of such an auto scam. Here are some tips to protect you from ending up the proud owner of a stolen car.

1. Low sale price: If the car seller is asking a extremely low price for the vehicle, inquire why. Smart buyers typically research car prices online before purchasing. To check current car values simply search for a similar vehicle on a popular car classified website. If the price asked for the vehicle is significantly lower, be suspicious as the car could be stolen. The thief may be asking the lowest possible price to rid them of the vehicle quickly.

2. Phone number: Always ask for the car seller’s landline before your first meeting. While cell phones are rather convenient and increasingly common, it will be rather difficult to trace if the need arises. If the seller refuses or states that they only have a cell phone approach with caution. Be extra watchful in your dealings with this person since it will be very difficult to find them if they suddenly disappear.

3. Registration address: Ask to view the car in the daytime at the address listed in the registration papers. If the seller refuses and instead asks to meet in a public place, make sure there is a valid reason. Even if the seller gives a good reason there is still a higher probability that the vehicle is stolen. If you still feel the seller is legitimate and the car is not stolen be aware that he/she could be hiding something serious about the car.

4. Inspection: Why view the car in the daytime? So that you can inspect the whole car very carefully. Look for any signs that people tampered with locks. Replacement locks are a giveaway. Check hidden places in the vehicle to see if the paint color has been changed, which might also disguise a stolen car.

Take these steps and protect yourself from used car fraud.

*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.

When a new vehicle is sold, it becomes a used vehicle. And if the dealer cannot obtain financing for the person who bought the vehicle originally, then the vehicle “rolls back” and is considered to be a used car. However, there are many dealers that try hard to represent this as a “new” vehicle. It is not, and everything about this vehicle is different than other cars. For instance, it’s the only vehicle on the dealer’s lot that must display both a MSRP label and a Buyer’s Guide form (the form that indicates whether a used vehicle has warranty). Moreover, if the vehicle costs less than $40,000 miles then the dealer must offer you the option to cancel the contract. It’s really a liability for the dealership because of the gray area these vehicles fall into. If you bought one of these vehicles, then there’s a high likelihood that there was auto fraud somewhere along the line (just like the person before you was, most likely).

Big dealerships have to sell a lot of cars to maintain their profit margin, so they will get very creative. However, small dealers still need to get customers through the door and in order to compete they might turn to “aggressive” marketing. Plus, the retail auto industry is fairy homogeneous and the people move around fairly frequently (as in the case of the inside contact that inspired this post). The point is this - there is a reason that vehicle disputes and complaints is the reigning number one consumer complaint! That’s because consumers are getting ripped off by dealers.

Purchasing a used car in California may be very confusing and complicated today. If you intend to buy a used car do some research and prepare not to become the victim of used car fraud.
If you consider purchasing a used car, these key steps may be very useful:
Step #1: Before you buy the vehicle have it inspected by a qualified mechanic who does not work for the dealership. You are allowed to have the vehicle inspected. If the dealer refuses to let you inspect the car simply walk away.

Step #2: It is very important that you get a written warranty for the car you buy.

Step #3: Pursuant to California law, still have rights even if you bought a used vehicle. If you purchased a fairly new vehicle and it still has the original manufacturer’s warranty, then you may bring a lemon law claim. You may also bring a warranty violation claim if you bought a vehicle with a dealer’s warranty. Even if the vehicle you have purchased was sold “as is” and comes with no warranty, you are still allowed to bring a claim for used car fraud.

Step #4: Be aware that the dealer may call you after you’ve signed the contract and tell you that you have to pay more for the vehicle than stated on the contract. This is illegal and you have the right to demand your money back.

Step #5: Try to avoid financing the vehicle through the dealership. Remember that many dealers have relationships with finance companies and will force you to use them for financing. Do not agree. Shop around and get a better deal at your bank or credit union.

Step #6: Don’t sign a contract to pay for a car for five years when you know that the car will no longer be in use after three years.

Step #7: Don’t purchase a car based on monthly payment you can afford to pay. Negotiate the price of the vehicle first and only after that talk about the financing. Remember, you are making a bad deal when you finance the vehicle for a long period of time.

Step #8: Make sure the dealer puts all his statements in witting. Otherwise you will have a hard time proving that the salesperson misrepresented the vehicle.

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

Pursuant to California law, still have rights even if you bought a used vehicle. If you purchased a fairly new vehicle and it still has the original manufacturer’s warranty, then you may bring a lemon law claim. You may also bring a warranty violation claim if you bought a vehicle with a dealer’s warranty. Even if the vehicle you have purchased was sold “as is” and comes with no warranty, you are still allowed to bring a claim for used car fraud.
California Consumer Legal Remedies Act prohibits the used car fraud in the state. Pursuant to this act used-vehicle dealers and most other retailers in California are not allowed to use unfair and deceptive business practices to sell their goods. The law prohibits car to mislead customers or to lie to them. In other words, dealers are obligated to inform the consumer if the car was previously wrecked or used as rental, and to disclose any other defect in the car. If the dealer tells you that the vehicle is fully serviced and inspected, then he is obligated to inspect it, report defects and fix them. Remember, that you have the right to inspect the vehicle you intend to buy. Also the dealer is obligated to answer to all your questions and disclose the truth about the problems of the car.
Some of the most common types of used car fraud are:

• Hiding the fact that the car is a “lemon buyback” and was returned for refund;
• Odometer rollback;
• Failure to disclose that the vehicle has a “salvage title“;
• Charging the consumer for features that were told to be free;
• Backdating the contract;
• Failure to disclose that the vehicle was a previous rental.

First of all, victims of used-car fraud should go to the dealer and ask for a refund or exchange. If the dealer fails to do what you want you are allowed to file a lawsuit and get refund. In dealer fraud cases the dealer may refund the car and its repairs, for alternative transportation, attorneys’ fees and other damages. Dealer fraud claims should be filed within three years starting from the day you purchased the vehicle.

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

It is becoming very difficult to recognize auto scams and even most difficult to separate them from the real deal. Here are some tips to help you:

Nowadays it is very convenient to shop for a used car online, but beware – auto scams abound.
The bait and switch is one of the most common dealer scams. You see a great car on the auto dealer’s site. You are ready to buy the vehicle, but the car dealer tells you it’s not available any more. But the dealer makes you another great deal just for you.

The easiest way to avoid this auto scam is to call the dealership and make sure the vehicle you intend to buy is still available. However, if you decide to go to the dealer without calling, be willing to leave when you begin to feel uncomfortable.

Learn the Basics on How to Avoid Auto Scams
Purchase a vehicle report of the car you intend to purchase and learn as much as you can about the history of the car. Pay attention to the approximate odometer reading of the vehicle. Find out if the vehicle has sustained any significant damage, if it is still under warranty or if a warranty is available. Check what the value of the vehicle is by the Kelley Blue Book.
Also it is a good idea to read the Technical Service Bulletin for the vehicle you are considering. This will help you learn about potential problems or past recalls of the car.
If you intend to buy a used car then learn about the laws governing used car sales in your state. If you think you are the victim of used car fraud, you should contact consumer affairs or your Attorney General’s office immediately.

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

www.DealerFraud.org]

Many potential car buyers are concerned about auto dealer scams. Of course it is wise to be cautious, but remember there are honest auto dealers out there. If you wonder how you can tell the difference here are some dealer frauds you might encounter and tips you can use to avoid used car fraud.
Most dealers make car buyers believe that they can purchase a car only at a high interest rate.
How to avoid this scam: Get information on your credit score and the rate you can get before going to the dealership. People become victims of auto dealer scams because they are not properly informed. Remember that knowledge is power.

Car buyers almost always have some idea of how much they can afford for their monthly payment. However, dealers know that customers focus on this number when shopping. Car dealers use this to scam buyers. The best way to avoid the numbers scam is to ask the right questions:

• Ask about the invoice price for the car.
• Ask about your total cost of the car and the loan.
• Make sure you clearly understanding the loan terms and fees.

Buyers Don’t Research Alternative Financing Options.
A lot of auto dealer scams happen at the finance office of the dealership when you have already made a deal on the vehicle. One of the easiest ways to avoid used car fraud is to shop around and negotiate. Go to your bank and get your financing before you go to the dealer to shop for the vehicle. Check the financial options that offers your dealer and compare which is the best for you. 

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

www.DealerFraud.org]

Unfortunately there are too many unscrupulous car dealers that are willing to use different dealer tricks to scam you. On the other hand not all dealers are that bad and there are many reputable dealers in the car industry that do their business right. Used car dealer fraud can be a huge problem for car buyers, but if you are smart you can easily avoid used car fraud. Here are some tips that will help you.

Do Your Research Before You Buy
• Why car fraud happens? Auto dealer fraud happens mainly because the car buyer is uninformed.
• Try to learn as much as you can about the car you are considering.
• Get information about the fair price for the car.
• Learn about the average costs for maintenance of the car.
•Check the safety of the vehicle.

It would be a good idea to also research your position.
• Get your credit report.
• Get some idea of the interest rate. Know approximately what you will to be charged for financing.

Plan to Avoid an Auto Dealer Fraud
• Auto scams are more common when buyers are in rush. Take some time to think over the deal.
• Shop around
• Negotiate with the dealer and be willing to walk away.
• Don’t try and buy on the same day. Wait at least 24 hours before you decide and sign.

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

www.DealerFraud.org]

Buying a used car can offer significant savings over a new car. However when buying a used car you undergo the risk of becoming a victim of car dealer fraud. Here are some information that will help you to s avoid most common car scams.

An Inspection Checklist
• Use an inspection checklist that is widely available in used car guides or online. The checklist will help you narrow your choices to those vehicles that are worth a mechanic’s inspection.

Get a Mechanic’s Inspection
• The costs of the inspection vary from state to state. The average is around $100.
• Inspectors are listed under headings such as “pre-purchase inspection.”
• Ask the mechanic for a full written report of all findings. You will need this later to discuss with the used car dealer.
• The dealer may not allow you take the vehicle for inspection. Arrange the dealer to deliver the vehicle to the mechanic. Remember that you are responsible for associated costs.

Know As Much Information As Possible.
The best way to avoid used car fraud is trying to get additional information about the car you intend to buy:
• The previous owner;
• Reviewing service records; and
• Purchasing a vehicle history report.

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

www.DealerFraud.org]

If you have made the decision of buying a used car, consider doing the following before visiting the dealer:

Check the Buyer’s Guide on the Car You Are Considering.
The Buyer’s Guide is designed to protect car buyers against used car fraud and is a requirement of the Federal Trade Commission (FTC).

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

Pursuant to the FTC, the Buyer’s Guide should include such useful information 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 includes a part with 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.

After you’ve read the Buyer’s Guide the dealer may ask you to sign it. He will later use this as proof of the buyer’s receipt of the document. Be sure you read every word before you sign any paperwork. Finally, on the back side 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]