S Car Dealerships Use To Commit Loan Fraud
If you want to purchase a new vehicle and you plan to seek financing, you should perform your due diligence when securing funding. There are two options consumers have when financing a car: seeking funding from a financial institution or applying for financing through a dealership. Car dealerships use their connections with financial institutions to help a car buyer find a loan with desirable terms. Unfortunately, some car dealerships will use this opportunity to take advantage of the consumer.
The following is a list of methods that car dealerships use to commit loan fraud.
Well Fix All The Issues Before You Pick It Up Tomorrow Lying About Fixing Car
Some buyers find small issues with the car that dont prevent them from making the purchase but they do request that the issues are fixed before they drive it off the lot. A touch up on the paint job, replacing small missing parts or doing a full tune-up are all regularly requested of dealerships, but that doesnt mean they actually make the changes for the buyer. Make sure that they actually made the fixes / repairs before driving off the car home!
Identify The Legal Name For The Car Dealership Their Address And Their Agent Of Service Of Process
In order to sue in California small claims, you need to be able to correctly name the person or business you are suing. Identifying whether the car dealership is doing business as an LLC or Corporation is very important. Alternatively, the business may be owned by a person, known as a “sole proprietorship.”
Read Also: How Can You Get Out Of A Car Loan Contract
How To Sue A Car Dealer For Misrepresentation
By FindLaw Staff | Reviewed by Steven J. Ellison, Esq. | Last updated November 15, 2021
Yes, you can sue a car dealership for lying to you in some situations.
Let’s say you’ve found the best ânewish” used car out there — a spiffy little sports coupe with a shiny coat of paint and the extra power of a V6 engine. You proudly drive off the lot, not a care in the world other than where your next road trip will be.
The salesperson told you the car was in âmint condition,” never been in an accident, and has low mileage. While this all sounds like a car enthusiast’s dream, it’s about to turn into a nightmare.
You learn that the car has been in a major collision with significant body damage and the odometer has been rolled back. The dealer was clearly not being truthful with you.
This is illegal. It is unlawful and is known as fraud or misrepresentation. You are protected under consumer law and can choose to file a lawsuit with the help of an auto fraud attorney. This doesn’t apply just to used cars. You can sue for issues with a new car as well.
Below you will find key information about how to sue a car dealer for misrepresentation about the condition of the car.
Filing A Lawsuit Against A Car Dealership
A victim of vehicle consumer fraud will want to collect damages for their loss. If you believe you have been the victim of auto fraud by way of misrepresentation, you may very well be able to file a lawsuit.
Some states will require car buyers to contact the dealer first to give them the opportunity to correct the matter or to speak with a state consumer protection agency.
Some possible remedies that the victim may be entitled to collect on include:
- Surrendering the vehicle and getting your money back
- Being awarded punitive damages for particularly egregious conduct
Read Also: How Much Does A Car Salesman Make Per Car
Pros And Cons Of Filing A Lawsuit
There are a number of remedies, including getting money, that you might be able to recover in a lawsuit.
There are at least three other upsides to suing:
- You may deter an unethical dealer from lying to someone else in the future
- You may be able to negotiate a settlement on favorable terms
- You may get a great deal of personal satisfaction from taking the dealer to court
As far as downsides go:
- You may lose and be out money for court costs and expenses
- Although some lawyers may take your case on a contingency fee basis, you might be out attorney fees
- Lawsuits can be stressful and time-consuming
What To Do When A Car Dealer Rips You Off
May 18, 2017 by Consumer Action Law Group
Are you wondering what to do when a car dealer rips you off? The best way to get your money back, cancel your contract, and return the car to the car dealer is to have an auto dealer fraud attorney file a lawsuit against the car dealer who ripped you off.
Car Dealers can rip you off by
- Selling the car for more than the advertised price,
- Not disclosing previous accidents and damage to the car,
- Adding features or add-ons without your consent,
- Misrepresenting mileage on the odometer, or
- Pulling credit without permission or overcharging for loans.
Sue Your Car Dealer For Ripping You Off
Recommended Reading: Will Carvana Buy My Leased Car
Can I Sue A Car Dealership For Lying
Legal Assistant Business Law, Consumer Law, Resources
Buying a car can be a painstaking, all-day event. By the time your loan has been approved, and the paperwork is in front of you, you just want to sign on the dotted line, hop in your newly purchased car, and drive off into the sunset.
Unfortunately, this point in a customers car-buying process can be taken advantage of by the car dealership. Customers are typically fatigued by the time the countless pages of paperwork are put in front of them, resulting in signed agreements where the terms and conditions are not carefully read.
So what can you do if the car you purchased at the dealership is not what the dealership promised you it would be?
Legal And Regulatory Options
What if talking it out doesnt work? Do you still have options if you were scammed, overcharged, or taken-advantage of by a car dealership? The answer is yes.
You can contact the Better Business Bureau, your states Consumer Protection Office, or even the Attorney Generals office. These three options could be time consuming, however the Better Business Bureau would try to broker a resolution in a more timely manner than the other two would.
The Office of Consumer Protection and the Attorney Generals office generally want to see a pattern of abuse by a dealership before taking action. You may need to wait years for enough complaints to be filed against a dealer before one of these agencies will do anything. This is frustrating, but its the reality of the situation.
Don’t Miss: How To Get Out Of A Car Loan Contract
Can You Sue A Car Dealership For Bad Service
You can sue a car dealership for bad service if your vehicle is defective and have problems under warranty that the dealership repair shop is unable to properly repair or replace with a reasonable number of repair attempts or consecutive days. You may be entitled to a lemon law buyback compensation reimbursement.
Common Types Of Small Claims Lawsuits Against Car Dealerships
We often receive the question, can I sue a car dealership in small claims? The answer is yes as long as the dispute is for $10,000 or less .
Here are some examples of small claims lawsuits against car dealerships:
- The car had mechanical issues shortly after you bought it. For example, you bought the car and the next day the engine started to act up.
- Made a fraudulent misrepresentation or advertising regarding the car you purchased. For example, the car dealership lied that the car was never in an accident.
- Failing to fix your car after you purchased a warranty. For example, you purchased a warranty when you bought the car and you pay for repairs after having mechanical issues. Now the dealership or the warranty won’t refund you for the money you spent fixing the car.
- Failure to refund you. For example, if you cancelled an extended warranty you purchase and the dealership agreed to refund you but never did.
- Failure to give you the title documents. For example, you purchased a car but the car dealership didn’t provide you with the title documents to the car.
California DMV Car Buyer’s Bill of Rights. The DMV publishes a guide on common issues with car dealerships here are some of the topics covered required disclosures car dealerships are supposed to provide you with, using the word “certified” when selling a used car, buying a used car and the option to cancel the contract within 2 days.
You May Like: How Much Commission Car Salesman
North Carolina Auto Dealer Fraud
At the Norris Law Firm, PLLC, we advocate for clients who have been victimized by fraudulent or deceptive auto sales practices and other NC auto dealer fraud.
The sale of an automobile touches on a wide range of federal and state laws that are designed to protect consumers from deceptive and unsavory practices that are all too common in that industry. If the dealer fails to comply with these laws, the consumer may undo the purchase or lease and get his or her money back or has a right to sue for damages incurred from the dealerships wrongful conduct.
NC Auto fraud is a very broad area, and car dealers and others can adapt their actions to the laws that are intended to regulate the industry. Because car dealers sell cars every day, while you may buy a car only once every three to four years, if not longer, it is easy to see how the cards might seem stacked against the consumer. If you think you have been deceived in any way in connection with the purchase, finance, or lease of your car or truck, or if you purchased a vehicle from a North Carolina car dealer that has suffered accident damage that was not disclosed to you at the time of sale, an inaccurate odometer, or other undisclosed condition, you may have legal recourse. You can take active steps to protect yourself and possibly avoid the need for an attorney, but if you have already been taken advantage of then we are here to help. Contact us today to discuss your individual situation.
He Cant Match Another Dealers Price
As you make the rounds at dealerships, you may find the car you want yet find it priced higher than you saw on another lot. When you ask the dealer to match the price, he may say there is no way for him to do so. You can pierce through this lie easily: Simply say youre going back to the other dealer and see what happens. If they let you go, they are telling the truth, but chances are the price will drop fast.
Read Also: Car Squealing Stops When Braking
An Award Makes The Car Great
If a car that appeals to you won an award from J.D. Power or a media outlet, a salesman might convince you it won because the car is better than the rest. Actually, a vehicle can win awards for many reasons. For example, J.D. Powers Initial Quality awards come from owner feedback taken 90 days after purchase. When a model shows no problems over that span, it might win. Unfortunately, you have no idea what happened on Day 91. Likewise, a vehicle that won Truck of the Year in 2015 but had a full redesign in 2017 is completely different. Model years count, so make sure salesmen reference the precise vehicle you are considering.
Things You May Want To Complain Against A Dealer
Reporting a dealership to the DMV may sound like an extreme measure, however, there are several cases where reporting them is the right thing to do. Real Car Tips gives praise to many dealers who are working on improving their customer service skills as of late, but, there are still a few stragglers who continue to look for consumers to take advantage of. Despite the better customer service across the board, it’s not uncommon to discover issues with your vehicle shortly after signing the paperwork and driving it home. Surety Solutions highlights a few things that should set off red flags that are reportable to the DMV:
- The dealer did not give you the title of the vehicle even if you paid cash for the car. If you have a loan for the car, the dealer may have sent the title to the financing company to hold until the car is paid off.
- The dealer failed to provide you with the needed paperwork to register the car with your town clerk.
- The dealer didn’t pay off previous liens held against the vehicle.
- They are consistently selling vehicles with faults that require immediate maintenance.
- They went out of business before giving you all the paperwork you need after a vehicle sale.
The above are just a few of the most common things you may want to report a car dealership for. Several states make it easier by allowing you to file complaints online.
Don’t Miss: How Much Do Car Salesmen Get Paid
If A Dealer Tells You To Bring The Car Back Or Wants You To Sign New Papers This Is A Giant Red Flag That You Are Being Cheated
The first thing to do is make sure you have a complete set of the paperwork from the original transaction. If you did not get that up front, go back and ask for a full copy of everything you signed at the dealership.
Never, ever give the dealer back the papers you already signed.
We always recommend to our clients that you arrange your own financing before going to a car dealership to buy either a new or used vehicle. Check with your local credit union on rates. You can check with the credit union loan officer about the price you are being asked to pay. At the dealership, you should negotiate the CASH PRICE for the vehicle and shop around to other dealers before buying. NEVER agree to tell the dealer what your monthly payment budget is, and NEVER agree to negotiate based on the MONTHLY PAYMENT amount.
If you do allow the dealer to arrange financing for your purchase and/or you have concerns about the dealer arranged financing, here are some things you should know about your rights when buying any vehicle in New Mexico.
There are specific rules that apply to PROTECT YOU if a dealer claims your financing “fell through” or asks you to make a larger down payment or in any way changes the terms you agreed upon.
Contact us with your paperwork for a Free Case Review.
In New Mexico, New and Used Vehicle Dealers Cannot:
a) Tell you at the time you sign the sales paperwork that the sale is final unless financing is complete
Is It Illegal For A Car Salesman To Lie
Lying to customers might not make a car dealers nose grow long, but it can cause his reputation to go south. Both state and federal laws contain auto dealer fraud provisions intended to punish dealerships that lie to their customers. These laws make deception and unfair practices by dealers illegal.
Read Also: Florida Dmv Electronic Title Transfer
Learn More About Car Dealer Misrepresentation
Car dealer scams are on the rise and it is up to you to ensure your rights are protected.
To learn more about car fraud laws in your state and how to file a lawsuit if you believe you’ve been the victim of this practice, speak with an experienced auto dealer fraud lawyer in your state today.
An experienced lawyer can review your case, advise you on how to report the alleged fraud, and how to get compensated for your losses.
Thank you for subscribing!
Is My Car Dealership Lying To Me Here’s How To Tell
The next two months are the best time of year to buy a car. September and October are model changeover season when the new model year cars arrive — and the old ones are discounted. Not coincidentally, it’s also when more people ask: Is my car dealership lying to me?
“Dishonesty can happen anywhere,” says car expert Lauren Fix. “The key to resolving these situations is to state the facts and try to remove the emotions, as hard as that may be.”
Customer trust of car dealerships has taken a slide lately. Only 61% of Americans believe their dealership gave them the best price, down from 65% in 2017, according to an annual survey by Cox Automotive. Nearly one-third of buyers are not satisfied with their auto purchase.
Let’s take a little road trip of the lies some car dealers tell. I’ll explain how to spot them and how to respond. So if you find yourself at a dealership looking for a new set of wheels this fall, no one will lead you down the wrong road.
I have a unique perspective on this problem. As a consumer advocate, I handle a fair amount of auto cases. Many motorists claim their car dealership lied to them when they purchased the vehicle.
Last year, another car dealership, Cowboy Toyota and Cowboy Scion, agreed to settle FTC charges that it deceptively advertised loan and leasing terms in ads placed in a regional Spanish-language newspaper.
Recommended Reading: How To Make Car Freshies
Auto Fraud Lawyers Near Me
The good news is that if you have been a victim of auto fraud, there are many auto fraud lawyers who specialize in this very area. Finding an auto fraud lawyer in your area will be advantageous as your lawyer will know the jurisdictions laws, as well as the dealership with whom you are dealing.
Once you find an auto fraud attorney, you need to gather all documents drafted during the purchase of your car. Your lawyer will be able to sift through the endless pages of contracts and agreements to determine if there were any additional fraudulent occurrences. Your lawyer will determine the course of action to take to regain damages that were sustained during the deception.