DEALER FRAUD
California has some great laws that protect consumers from unsafe vehicles or bad car deals. One is the Song-Beverly Consumer Warranty Act, commonly known as the “Lemon Law,” which allows a car buyer to sue the manufacturer of a defective vehicle and get a full buy back or replacement vehicle without having to pay for a lawyer. That’s because the law requires the manufacturer to pay attorney’s fees and costs if your case is successful. This law covers new cars and some used cars if sold with the remainder of the manufacturer’s warranty. For more on the Lemon Law, go to the lemon page on this site
Another great law for consumers is the Consumer Legal Remedies Act, or CLRA, which protects consumers from fraud or deceptive practices by car dealers in the sale of new or used vehicles. This law also allows the buyer to retain an attorney without paying fees, as the dealer is required to pay attorney’s fees if your case is successful.
Dealer Fraud/Deceptive Practices
The CLRA doesn’t require that you prove that a Dealer intentionally lied to you. You must only prove that the unfair conduct or deceptive acts or practices were undertaken in a transaction intended to result or that results in the sale or lease of goods or services to any consumer. Here are a few examples of conduct that violates the CLRA:
Dealer sells a car that has prior structural damage without telling you.
Dealer tells you “no accidents” when you later learn there is accident damage.
Dealer tells you they got the car from the original owner, when there were two or more owners.
Dealer says the car is in great condition and has been thoroughly inspected, but a
breaks down the next day.
Dealer says the car has a “clean title” when the title has been reported as “salvage” or there is a lien or other issue affecting the title.
Another type of issue arises in the terms of the contract or financing. Here are some examples of dealer conduct that would violate the CLRA:
Dealer tells you that the lender requires that you purchase a “service contract,”
sometimes referred to as an “extended warranty,” when there is no such requirement.
Dealer says an “optional” product, such as a theft deterrent device, must be purchased as part of the sale of the vehicle.
Dealer tells you they have assigned the loan for the Vehicle to XYZ Bank, then says the lender needs more money for the down
payment or you must return the vehicle. (Also known as “yo yo” financing. See future blog post on this issue, coming soon!)
Creative Car Dealers
Used car dealers are very creative and will tell you what you want to hear. After all, that their job is to sell cars. Your job as a consumer is to educate yourself before going to the dealership so you know what you can afford, what kind of car is safest and best for you, and what your rights are. If you take the time to do this, you may be able avoid the need for a lawyer at all.
Your Rights as a Consumer
Most car buyers are unaware of their rights and thus, don’t know when they’re being subjected to fraud or deception by an unscrupulous car dealer or high-powered sales staff. To learn about your rights, go to “Car Buyer’s Bill of Rights,” soon to be found on this Website.
Examples of Dealer Fraud/Deceptive Business Practices (And Tips to Avoid Them!)
Of course, one of the most common types of dealer fraud or deceptive practices concerns the condition of the vehicle. For example, the salesman says, “This 2016 BMW is in good condition,” or “All of our vehicles are inspected.” But what does “good condition” mean? And what does the inspection involve? Mechanical issues? Engine/transmission issues? Ask what the inspection involved. Ask how many prior owners. Ask if the Vehicle has been in any accidents and if so, how severe? Frame damage? (Also known as “unibody” or “structural” damage.)
Ask to see the Carfax but do so in addition to asking the above questions. Don’t let the salesperson respond by saying “Here’s the Carfax.” The Carfax often does not show accidents, nor does it always show a complete or accurate owner/service history. (Better yet, if you know the vehicle’s VIN, run your own Carfax before heading to the Dealership. You may save yourself a trip!)
Buyer’s Guide
State and federal laws require car dealers to prominently display on all used cars a “Buyer’s Guide” which states whether the vehicle is sold “As Is” or with a Dealer Warranty. (There is also a revised Buyer’s Guide which uses “Implied Warranties Only” instead of “As Is.”) If the “Dealer Warranty” box is checked, you may receive greater rights against a Dealer who sells you a defective vehicle. (Please see future blog post on “Dealer Warranty: Implied Warranty of Merchantability,” coming soon!)
Used Vehicle Disclosure Form
Used car dealers are required to disclose the prior history of used vehicles on a form that lists such things as prior rental, prior accident damage, salvage vehicle, and the like. The customer must initial each item. Often, this document is slipped in amongst numerous other purchase documents so a buyer may be unaware that she signed off on frame damage, or a prior rental. If this happens, you may still be able to demand that Dealer buy back your vehicle if the Dealer told you something different from what the form says.
Read and Keep All Purchase Documents
Ideally, when buying a new or used vehicle, you should read the contract and all purchase documents and get copies of everything you signed. After purchase, you should review these documents to be sure you didn’t miss something during the sales process. If you find anything that you did not knowingly agree to that affected your decision to purchase the vehicle, you can then review these documents with our office to see if there is a violation of the law.
When You Need a Lawyer
One of the features of the CLRA and the California “Lemon Law” is that these laws allow experienced lawyers to take the time to carefully review possible cases at no charge to you. I look at hundreds of pages of documents from consumers every month to evaluate whether they have a valid case. I do not charge the consumer for this, but if I take the case and you get a buyback, the Dealer must also pay my fees, including the time taken to evaluate the case.
If you are the victim of an unscrupulous car dealer or high-powered sales tactics, or if you believe the dealer sold you a defective vehicle, do not hesitate to call the law offices of LaMonica & Foley, or contact me directly at [email protected]. By doing so, you will not only help yourself, but may also cause the Dealer to think twice before defrauding another consumer.
California has some great laws that protect consumers from unsafe vehicles or bad car deals. One is the Song-Beverly Consumer Warranty Act, commonly known as the “Lemon Law,” which allows a car buyer to sue the manufacturer of a defective vehicle and get a full buy back or replacement vehicle without having to pay for a lawyer. That’s because the law requires the manufacturer to pay attorney’s fees and costs if your case is successful. This law covers new cars and some used cars if sold with the remainder of the manufacturer’s warranty. For more on the Lemon Law, go to the lemon page on this site
Another great law for consumers is the Consumer Legal Remedies Act, or CLRA, which protects consumers from fraud or deceptive practices by car dealers in the sale of new or used vehicles. This law also allows the buyer to retain an attorney without paying fees, as the dealer is required to pay attorney’s fees if your case is successful.
Dealer Fraud/Deceptive Practices
The CLRA doesn’t require that you prove that a Dealer intentionally lied to you. You must only prove that the unfair conduct or deceptive acts or practices were undertaken in a transaction intended to result or that results in the sale or lease of goods or services to any consumer. Here are a few examples of conduct that violates the CLRA:
Dealer sells a car that has prior structural damage without telling you.
Dealer tells you “no accidents” when you later learn there is accident damage.
Dealer tells you they got the car from the original owner, when there were two or more owners.
Dealer says the car is in great condition and has been thoroughly inspected, but a
breaks down the next day.
Dealer says the car has a “clean title” when the title has been reported as “salvage” or there is a lien or other issue affecting the title.
Another type of issue arises in the terms of the contract or financing. Here are some examples of dealer conduct that would violate the CLRA:
Dealer tells you that the lender requires that you purchase a “service contract,”
sometimes referred to as an “extended warranty,” when there is no such requirement.
Dealer says an “optional” product, such as a theft deterrent device, must be purchased as part of the sale of the vehicle.
Dealer tells you they have assigned the loan for the Vehicle to XYZ Bank, then says the lender needs more money for the down
payment or you must return the vehicle. (Also known as “yo yo” financing. See future blog post on this issue, coming soon!)
Creative Car Dealers
Used car dealers are very creative and will tell you what you want to hear. After all, that their job is to sell cars. Your job as a consumer is to educate yourself before going to the dealership so you know what you can afford, what kind of car is safest and best for you, and what your rights are. If you take the time to do this, you may be able avoid the need for a lawyer at all.
Your Rights as a Consumer
Most car buyers are unaware of their rights and thus, don’t know when they’re being subjected to fraud or deception by an unscrupulous car dealer or high-powered sales staff. To learn about your rights, go to “Car Buyer’s Bill of Rights,” soon to be found on this Website.
Examples of Dealer Fraud/Deceptive Business Practices (And Tips to Avoid Them!)
Of course, one of the most common types of dealer fraud or deceptive practices concerns the condition of the vehicle. For example, the salesman says, “This 2016 BMW is in good condition,” or “All of our vehicles are inspected.” But what does “good condition” mean? And what does the inspection involve? Mechanical issues? Engine/transmission issues? Ask what the inspection involved. Ask how many prior owners. Ask if the Vehicle has been in any accidents and if so, how severe? Frame damage? (Also known as “unibody” or “structural” damage.)
Ask to see the Carfax but do so in addition to asking the above questions. Don’t let the salesperson respond by saying “Here’s the Carfax.” The Carfax often does not show accidents, nor does it always show a complete or accurate owner/service history. (Better yet, if you know the vehicle’s VIN, run your own Carfax before heading to the Dealership. You may save yourself a trip!)
Buyer’s Guide
State and federal laws require car dealers to prominently display on all used cars a “Buyer’s Guide” which states whether the vehicle is sold “As Is” or with a Dealer Warranty. (There is also a revised Buyer’s Guide which uses “Implied Warranties Only” instead of “As Is.”) If the “Dealer Warranty” box is checked, you may receive greater rights against a Dealer who sells you a defective vehicle. (Please see future blog post on “Dealer Warranty: Implied Warranty of Merchantability,” coming soon!)
Used Vehicle Disclosure Form
Used car dealers are required to disclose the prior history of used vehicles on a form that lists such things as prior rental, prior accident damage, salvage vehicle, and the like. The customer must initial each item. Often, this document is slipped in amongst numerous other purchase documents so a buyer may be unaware that she signed off on frame damage, or a prior rental. If this happens, you may still be able to demand that Dealer buy back your vehicle if the Dealer told you something different from what the form says.
Read and Keep All Purchase Documents
Ideally, when buying a new or used vehicle, you should read the contract and all purchase documents and get copies of everything you signed. After purchase, you should review these documents to be sure you didn’t miss something during the sales process. If you find anything that you did not knowingly agree to that affected your decision to purchase the vehicle, you can then review these documents with our office to see if there is a violation of the law.
When You Need a Lawyer
One of the features of the CLRA and the California “Lemon Law” is that these laws allow experienced lawyers to take the time to carefully review possible cases at no charge to you. I look at hundreds of pages of documents from consumers every month to evaluate whether they have a valid case. I do not charge the consumer for this, but if I take the case and you get a buyback, the Dealer must also pay my fees, including the time taken to evaluate the case.
If you are the victim of an unscrupulous car dealer or high-powered sales tactics, or if you believe the dealer sold you a defective vehicle, do not hesitate to call the law offices of LaMonica & Foley, or contact me directly at [email protected]. By doing so, you will not only help yourself, but may also cause the Dealer to think twice before defrauding another consumer.