Dealer Fraud

Rental car fleets typically sell their cars when the manufacturer’s warranty expires. They are usually sold at auction and bought by major dealers. Everyone has seen the television commercial in which tourists in Hawaii abuse their car with the punch line “it’s only a rental.” Amusing, but not if you buy one without having the history disclosed to you. California requires that the rental history shall be clearly identified as such. Failure to do so may be fraud.

The more you know about the car, the better. Ask questions. Get an independant mechanical inspection before you purchase. The Vehicle Code requires that dealers post notices telling the purchaser that they may, at their own expense,” have the vehicle inspected by an independent third-party either on or off these premises.”

You have the right to it and there are many mechanics who will come out to the lot to do the inspection. If the dealer balks; first, its against the law, and second, its probably a sign of things to come.

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.

Many car dealership customers are unable to pay the entire down payment at the time the purchase contract is signed. Often dealerships will allow the customer to make a down payment in payments (called deferred down payments). Although the vehicle code recognizes these deferred down payments, they must be itemized in the purchase contract, including the amounts and due dates for the deferred payments. Some dealerships, however, will have customers write checks for the deferred down payments and then agree not to deposit the checks until an agreed upon date. The customer is then made to sign a separate agreement that lays out the dates on which the checks will be cashed and additional provisions regarding any returned checks – thus creating additional obligations that are not included in the purchase agreement.

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

The vehicle code states that a dealership cannot sell a new vehicle for more than sticker price (a.k.a. the manufacturer’s suggested retail price, or MSRP) unless there is a dealer addendum sticker disclosing itemized costs above MSRP physically affixed to the car. Inflating the cash price of a vehicle – as in the case of a negative equity deal (see above) often results in selling a vehicle for higher than the MSRP, while also affecting the amount charged for taxes, licensing & registration and finance charges.

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