Used Car Seller Did Not Tell Me the Warranties Expired – Is this Dealer Fraud?
Provided by HG.org
Fraud with an auto dealer may be committed when the employees have practiced unfair or unreasonable activity or are deceptive.
This means something was promised or a rate was given for payments and this is not what is charged each month after the contract has been signed. There are various state and federal laws that govern the activity that a car dealership is able to commit. If the person that is purchasing the vehicle has been wronged, he or she may be entitled to a remedy to the situation. This could be compensation for the time and money paid while using the car or it could be a contract release.
When the warranties are expired on a vehicle before it is purchased by a new client, this may be considered a crime because the information was not disclosed to the person. If the vehicle is considered a lemon per the local or state lemon laws, this may lead to a course of action being taken against the dealership. Unfortunately, most consumers are unaware of the specifics that govern these transactions. This means that those in the care industry are able to take advantage of the customer through knowledge of these stipulations. Some companies have an attitude that the consumers are buying at their own risk when they do not have the knowledge about these processes.
Illegal Practices in the Auto Industry
Most types of practices that may be considered fraudulent when the dealership has not disclosed something or have actively misrepresented something about the situation. If something has not been disclosed, this is when the employee is not explaining certain details that may affect the value of the car, the durability and other similar matters such as a warranty. This could even include the car previously being a rented automobile, having been in an accident with severe damage and expired or nonexistent warranties. Other details that are not provided could just be unknown data that may have been lost from one owner to the next.
Dealerships commit fraud constantly as a means to attract and engage customers in purchasing a car. There are many specific requirements for financing, and they are able to increase prices for cars that are not set at the value they are sold based on reasonable market value. However, with low monthly payments, they are able to entice customers into contractual agreements that lock them into a set amount. When the loan is approved, they are able to ensure the consumer is slowly acquiring the car. However, the fraudulent activity continues with other customers, and sometimes problems arise due to a lack of funds or if the vehicle breaks down.
When the warranty on a car has expired, the customer should be warned about this. However, many dealerships are averse to any negatives as selling points, and they avoid explaining these finer details. This then leads to problems when the vehicle is not working. If the customer is unable to ensure repairs are made through a warranty within the predefined period, the purchase becomes useless. During the extensive paperwork period of the acquisition, there should be a document that the customer signs explaining there is no warranty or that is has expired. If this is the case, a different type of warranty should be provided by the car dealership. Many extend this for up to 90 days in many instances.
Intentional misrepresentation and nondisclosure are both meant to mislead consumers seeking cars, and both are considered fraud. Both practices may be used to explain away warranty issues. This could be a means of lying outright about options the car may have that do not exist. In some cases, this includes features added in that are not wanted or requested so that payments are increased. Other misrepresentations may be detailed about the newness of the vehicle or other concerns such as salvage titles or warranties that already expired. If there are any records available, it may be important to research more about the vehicle before purchasing it.
Legal Recourse for Nondisclosure
Because nondisclosure is considered fraud, it is important to seek a lawyer when these issues are discovered. It is possible there are other problems with the deal that have not been revealed that require assistance through legal representation. This may break the contract and release the customer from the arrangement, or he or she could seek compensation for the issue.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.