Dealer Fraud

In car auctions there is a large fleet of former rent-a-cars from major rent-a-car companies and very often dealerships will get their used vehicles from auctions. These vehicles are driven by numerous different people, who have different habits. Sometimes, people who rent the cars tend to abuse these vehicles and treat them in ways they would not treat their own car.

This is why rental cars are of lesser value than other vehicles of the same brand and the same age that were owned by an individual. The law in a few states requires car dealers to disclose in writing the fact that a vehicle was a rental. However, in the states where there is no such law, car dealers typically hide this information, or even misrepresent the vehicle’s history in an effort to make the sale.

In some car dealerships these vehicles are labeled as “Program Vehicles”, which gives the customers the impression that the vehicle history is of some higher quality. The fact that the vehicle has a previous rental history is material, because consumers will probably not buy it if they known this fact. The failure of the dealer to disclose this information to the buyer is auto dealer fraud.

Car Buyers should remember that used carshave an unknown history of ownership. The best used car buy is the one that has been well taken care of and well maintained.

Thus, if the customer is wise enough, the he/she often asks the salesperson questions about the vehicle’s history. Virtually every response is that the vehicle has never been damaged or in any previous accidents.

The truth is, the salesperson rarely ever knows whether what he  is saying is in fact true. Every vehicle goes through some inspection by the service department of the dealership when it is first brought into the dealership. Most trained technicians can identify certain damage to a vehicle by noting re-painting, welding, or even replacement parts. However, this information is never passed on to the sales force of the dealership, nor is any record of these findings maintained. Therefore, the salesperson is really not the person with knowledge of the vehicle history, yet will answer the questions a consumer asks with the answer the consumer wants to hear so that he or she can make a sale. Remember, they almost always paid on a commission basis. If they tell you the vehicle is damage free and they are wrong, their conduct is considered dealer fraud.

It is not a secret that daily rental drivers don’t treat rental cars and trucks like their own. Over a short period of time a lot of small defects add up to rental vehicles. Some of the common problems of Prior Daily Rentals are rust and corrosion. Also many rental cars and trucks have been in serious accidents involving body and frame damage.

The worst thing about these rental cars is that after between 15,000 and 30,000 miles on the odometer they are shipped throughout the 50 states and end-up in dealership lots. Pursuant to California consumer protection laws car dealers are required to disclose any Prior Daily Rental history to the car buyer. It constitutes a violation of law if the dealer knowingly fails to disclose a vehicle’s history as a prior rental. However not all car dealers honestly disclose prior rental history to car buyers. The reason for this is that car dealers know that this fact is important for car buyers and it may influence the buyer’s decision and the price someone would pay. According to some inquiries made most of the consumers would not buy a Prior Daily Rental (PDR) at any price.

You can protect yourself against this dealer fraud if before purchasing a used car you order a vehicle history report. Also have the vehicle inspected by a trusted mechanic. If you believe that the car you purchased is a prior rental and the car dealer failed to disclose this contact a dealer fraud attorney in your state.

Car dealers usually use odometer rollback to raise the value of a car. This practice of car dealer is illegal. The higher the mileage of the vehicle the less you pay for it, that’s why if you consider buying a used car you should always check the vehicle’s odometer. It is a good idea to start by checking the vehicle’s history. Do the following:

• Checking the inspection sticker for mileage at the car’s last inspection;
• Have the car inspected by a qualified mechanic;
• Asking sellers who sold the vehicle previously for copies of the vehicle’s odometer disclosure forms;
• Checking oil change stickers (usually inside the door frame);
• Get a title search from your state’s Department of Motor Vehicles.

In case you believe your car dealer committed an odometer rollback, you have the right to sue them in federal or in state court under the federal Motor Vehicle Information Cost Savings act. Some states may have specific laws regarding odometer fraud, that’s why it is a good idea to check these laws with your state’s Attorney General and county prosecutors.

Dealers and individuals use title washing to remove salvage branding from car titles and to minimize their losses. Typically they transfer a salvaged vehicle to a state that doesn’t recognize the brand and the titles are washed. You can never know that the vehicle had been salvaged after the state issues a new title. Another way is moving the vehicle from state to state until the branding is gone. When it is, the vehicle’s history will have been “washed” clean.

One of the oldest tricks car dealers use to increase a vehicle’s resale value is rolling back its odometer. However there are a number ways for consumers to detect this scam.

• First and the most important, request a copy of the vehicle’s history from sites like CarFax or AutoCheck. Vehicle’s history record will include information about state registration and emission inspection and a lot more.
• Check if the numbers on the odometer are lined up straight. Pay special attention the 10,0000 digit.
• Look for service stickers (oil change, tune up, etc.) inside the door or under the hood that may have recorded mileage.
• Look at the date the title was issued. If the vehicle was sold shortly after the title was issued then this was possibly done to hide a mileage alteration.
• Check the owner’s manual for maintenance records. If you find out that pages have been removed, you should inquire about it.
• An indication of odometer tampering could be loose screws or scratch marks around the dashboard. But it could also mean someone replaced a burnt out light.
• Ask to see the official title document. Look at it carefully to see if the mileage on the document has been altered.
• Always have an independent mechanic inspect the vehicle. The inspection should include checking for signs of tampering.

Pursuant to the law the dealership is required to disclose any facts and information known about a used vehicle such as if the vehicle has:

• Inaccurate odometer readings;
• prior rental vehicle history;
• any prior accident history (that caused substantial damage);
• lemon law buy back information (the vehicle was repurchased by either manufacturer or dealer under the lemon law because of a defect), etc.

The law also prohibits car dealers from misrepresenting facts about the vehicle’s history (such as its never been in an accident, it was a trade vehicle (when it was a rental), etc.

Most consumers suspect that they have been sold a previously wrecked vehicle they notice problems in the appearance or performance of the vehicle. If you believe you are a victim of this fraud conduct a research about the vehicle’s history and have it inspected by a qualified mechanic. Contact an experienced auto fraud attorney.

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