Consumer Fraud in the Sale of Motor Vehicles

 

Attorneys David Levin and Mitchel Luxenburg also have significant experience representing victims of consumer fraud.  There are many pitfalls of which consumers must be wary when purchasing a new or used vehicle.  Many misrepresentations can be made by employees of car dealerships.  Had many consumers known the truth about their vehicles, they would not have purchased them in the first place.


Fortunately, many states have legal protections in place for consumers who have been the victims of fraud.  State consumer sales practices laws provide rights to victims of unfair and deceptive acts and practices in connection with a consumer transaction.  Many of these unfair and deceptive acts and practices occur in connection with the sale of motor vehicles.
If you have been a victim of one of these scams, you may be entitled to compensation.  Consumer fraud can take many forms, so call the law firm of Luxenburg & Levin at (888) 493-0770 for a free case evaluation.


Failure to disclose prior rental history:  If a dealership obtains a used car from a rental company, they often must disclose to you the prior rental history of that vehicle – in some states, even if you do not ask.  Many people do not treat rental cars with the same respect they would treat their own cars.  They may be abused and driven by numerous people with different driving habits.


Lemon Laundering:  Many states maintain very specific requirements for the resale of vehicles that have been bought back by manufacturers in settlement of consumer lemon law claims. Future purchasers of these vehicles are usually entitled to very specific disclosures about the history and the reason for the lemon law claim.  Many people are never advised of these facts when buying a used car.  These vehicles can contain serious safety defects that have not been properly repaired.


Failing to disclose prior salvage history:  Many vehicles that are "totaled" by insurance companies do not end up in junkyards.  They are repaired – often poorly – and sold back to unsuspecting consumers.  The safety and integrity of such a vehicle can be severely compromised.  If a vehicle is branded on its title as "salvage," this should also be disclosed to you – in some states, even if you do not ask.


Failing to disclose prior damage to the vehicle:  When purchasing used vehicles, many consumers ask whether the vehicle has suffered prior accident damage.  The safety and integrity of such a vehicle can be severely compromised.  Dealerships may lie about prior damage, or conveniently tell you what you want to hear, regardless of the truth.


Invalid extended warranties and service contracts:  When you purchase that expensive extended warranty or service contract with your used vehicle, you may think you are purchasing "piece of mind" that the warranty company will pay for any expensive repairs that are needed.  However, many consumers come to find that their extended warranty is useless when it is needed the most.  These contracts commonly contain exclusions for vehicles that have suffered accident damage, have pre-existing defective conditions, or do not contain original factory parts.  Not only have you wasted the money on the warranty but you also have an expensive repair bill.


Changes to advertised prices:  Generally, all advertised prices and terms must be honored.  Dealerships cannot pull the old "bait and switch" when you arrive to take advantage of an advertised deal.


Spot delivery or "yo-yo" sales:  A spot delivery may start as an otherwise legal transaction that turns into fraud after the sale.  When a dealership arranges vehicle financing for you, what they may not be telling you is that they do not even have the approval of a bank yet to accept your loan.  Dealerships who handle such a transaction properly will have you sign a spot delivery or bailment agreement.  This agreement will state that if the dealership cannot obtain financing for you at the promised rate, then you must return the vehicle or sign a contract at a higher rate of interest.  However, dealerships sometimes ask consumers to return to sign for a more expensive loan or lease when the consumer already has a binding contract.  If you refuse to sign the new agreement, you may be denied a return of your down payment or your trade in vehicle.  

 

 

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