Auto Dealer Fraud
When you’re looking to buy a new car, there are a lot of options. You can go to the dealership for a new car. If you are looking for a used vehicle, you can try a private seller or talk to a used car salesperson. It pays to do your research on the dealership before buying so you don’t end up with a lemon.
Consumer protection laws are different in every state. Make sure you know what protections you have so you don’t end up a victim of car dealer fraud. Find a lawyer with experience handling auto dealer fraud claims in your area if you want to know more about your consumer rights after buying a car.
What Is Auto Dealer Fraud?
Auto dealer fraud occurs when car dealers use deceptive practices to sell a vehicle. There are many types of auto scams that can happen during the car-buying process, including:
- Bait and switch
- False advertising
- Yo-yo interest rates
- Inflated purchase price
- Odometer fraud
- Vehicle warranty fraud
Bait and Switch
A bait-and-switch scam happens when an auto dealer advertises a car to lure customers into their dealership. The customer gets to the dealership only to find out that a particular car was sold, but “luckily” another is available at a higher price. The salesperson then uses aggressive methods to try to sell the customer a more expensive car.
Interest Rate Fraud
During the auto finance process, the dealer may tell you that you qualify for a low-interest rate. However, even days or weeks later, the dealer may call and tell you that they have to renegotiate the contract because your loan application didn’t qualify for the lower rate.
A car dealership may try to inflate the invoice price of a vehicle. For example, the salesperson may try to charge you for additional options that come standard on the car you want to buy. The dealer may also try to hide extra costs by adding on additional services, even if you don’t want them. If you want to trade in a vehicle, the dealer may try to underpay the trade-in vehicle’s value.
Odometer fraud involves resetting or rolling back the odometer on a vehicle. Fraudulent auto dealers do this to make potential buyers believe cars have fewer miles on them. Cars with lower miles command higher prices. You may think you are buying a car with 20,000 miles, but it actually has 120,000 miles.
Odometer fraud can be more complicated than just rolling back the numbers. Auto dealers also try to remove visible traces of wear in a process called “detailing” in addition to rolling back the odometer. According to The National Highway Traffic and Safety Administration (NHTSA), odometer fraud costs consumers more than $1 billion annually.
When Should I Contact the Dealers?
If you have a problem with your car purchase, you may want to contact the dealer first to see if they can fix the problem. Make sure all communication is in writing so you have evidence if there are any legal issues. Explain what happened. Suggest a solution or remedy that works for you. Give the dealership a chance to make it right.
Your lawyer can also deal directly with the dealer so you don’t have to worry about getting ripped off. If the dealer refuses to work with you or you think they are trying to cover up what went wrong, you may be able to report a fraud claim.
Some states have a specific agency that investigates complaints of automotive dealership fraud and monitors auto dealerships. Once you file your complaint, the agency will investigate to determine if the dealership acted fraudulently. The agency can order the dealership to fix the situation, fine the dealership, or take away their license to sell cars in the state.
What Are Lemon Laws?
Lemon laws are state laws that protect consumers who buy a vehicle. Some states only protect new vehicles with lemon laws, but other states cover new and used vehicles. For example, California’s lemon laws require dealers to refund or replace a new car if there are problems that cannot be reasonably fixed by the dealer.
Can I Sue a Car Dealer for Fraud?
If you suspect you were ripped off by a fraudulent auto dealer, you are entitled to seek money for your losses. Auto dealer fraud can be a crime, and fraudulent auto dealers can face civil and criminal penalties.
To find out more about your legal rights and options for recovery, you can speak with a consumer protection attorney with experience in dealing with automotive dealer fraud.
Speak to an Experienced Auto Dealer Fraud Attorney Today
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified auto dealer fraud lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local auto dealer fraud attorney to discuss your specific legal situation.
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