Dealer Fraud

Used cars may be wrecked, re-built and re-sold legally to unsuspecting buyers! A clean title and bill of health can even be acquired by the used car seller and the used car buyer may never know the car had been wrecked and/or “totaled” in an accident!

The only way to ever know a car’s true condition is to have a good independent mechanic check it out before you buy.

A flood car is one that has been caught in a flood and underwater then salvaged and cleaned up for re-sale to unsuspecting car buyers and even used car dealers! Consequently, you cannot even trust that the title held by the used car dealer is legitimate, even though, by law, the title of a flood car is supposed to state that the car has been under water.

In essence, you cannot trust what the used car dealer knows so you must inspect used vehicles thoroughly yourself or have a good mechanic do it. Check under the hood for corrosion and look for water lines indicating how high the water level may have reached during a flood. Also, check under the dashboard, seats and floor mats for signs of dirt and/or sand.

Have you seen submerged cars on television and wondered what happened to them after the water receeded?
The sad fact is that many of them will end up with For Sale signs on them on street corners and used car lots. Most, if not all of them, should be considered total losses never to be driven again but some less than honest car dealers will see an opportunity to turn a quick buck at your expense.
When Hurricane Floyd struck Florida in 1999, an estimated 75,000 vehicles were ruined by floods and declared totaled by insurance companies, according to CARFAX, a Virginia firm that does background checks on used vehicles. Hurricane Katrina is said to have flooded up to a half million cars. People in the New Orleans area expect to see these cars for sale so the cars are shipped to other areas where consumers are less likely to suspect that the car they are buying was submerged in water.
Knowing that these flood cars are out there is one thing but how can you tell which ones they are after they’ve been spiffed up and detailed? Luckily there are some things to look for when buying a used car that can identify which ones were underwater.

Maybe.  California, like every other state, does not allow for a “cooling off period” for vehicle purchases.  A customer can purchase a “contract cancellation option,” as discussed on qualifying used vehicles, but there is nothing in the Vehicle Code (or any other part of the California code) that allows a consumer to return a vehicle they have purchased.  However, the Vehicle Code specially does allow for other legal claims, such as fraud.  With the help of a lawyer familiar in this practice area, you might be able to make an alternative legal argument that will allow you to return the vehicle.

Effective as of July 1, 2006, Assembly Bill 68 (AB 68, commonly known as the Car Buyer’s Bill of Rights), became the law in California.  This piece of legislation was designed to protect consumers against a dealer’s “hidden profit centers,” and make the entire vehicle purchasing process more transparent.  In the years since its inception, it has seen little in the way of government enforcement, and the rules are confusing enough that even veteran managers in the industry inadvertently run afoul of them from time to time.  One of the most hotly anticipated revisions to the law was the Contract Cancellation Option, or “Cooling Off Period.”  Prior to AB 68, there was, generally, no provision for a “Cooling Off Period” in California.  Now, under AB 68, a consumer has the right to PURCHASE a “Contract Cancellation Option” on used vehicles priced under $40,000 for a fee that has a statutory maximum based upon the purchase price of the vehicle.  For instance, if you purchase a vehicle for $27,000, then you can elect to pay the car dealer another $250 to have the right to return the car within 2 days (or 250 miles from delivery) and cancel your contract. However, the dealer has the right to charge you a “restocking fee” that can be up to $500, but any amount you paid for the Contract Cancellation Option is credited against the restocking fee.   During this period, the dealer is forbidden from selling your trade-in vehicle (if any).

A Riverhead car dealership owner has been charged with filing fake warranty claims for vehicle repairs that were never performed, Suffolk police said.

As part of the scheme, police said, Riverhead Suzuki owner Peter Moutafis used vehicles bought at the dealership with extended warranties without the owners’ knowledge to create bogus records of mechanical failures.

Police said Moutafis, 35 of Manor Park, then falsely billed warranty companies for repair work done by the dealership, also known as Moutafis Motors and Prestigious Motors.

Moutafis, of 181 Cranford Blvd., surrendered to Seventh Precinct detectives yesterday and was charged with insurance fraud, grand larceny, falsifying business records, and possession of a forged instrument, police said.

__________________________________________________ 

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

www.DealerFraud.org]