Car Sale Law / Car Dealer Law
Source: Reuters
There are numerous laws and regulations that apply to car dealers. Some laws apply to sales, others to leases, and yet others only to financing. I address in this post only a few potential claims, or causes of action, against a car dealer for improper tactics used when selling or leasing a vehicle.
State “UDAP” Statutes – Each state is likely to have its own “UDAP,” or unfair and deceptive acts or practices, statute to protect consumers. These UDAP statutes generally protect consumers from fraudulent, unconscionable, unfair, or deceptive consumer transactions. They usually apply to a broad range of consumer transactions, including those related to vehicle sales, leasing, and financing. The Texas general UDAP statute is the Texas Deceptive Trade Practices – Consumer Protection Act (“DTPA”).
Fraud – Fraud is a claim available for consumers when a car dealership essentially lies about or fails to provide sufficient information to a consumer regarding a material fact related to the sale or lease of a car or truck. A material fact is generally a fact which would be important to the average consumer. The mileage of a vehicle, a vehicle’s title being branded as “salvage,” and a vehicle previously being flooded are some examples of material facts.
Negligence – A car dealer owes certain duties to customers when selling or leasing vehicles. If a car dealer breaches, or fails to fulfill, those duties, it can be liable to a car buyer for resulting damages.
State Statutory Finance Claims – Many states have laws in place to protect consumers from certain types of finance fraud, and also the charging of usurious (unlawfully high) interest rates. Some such laws also protect consumers from “cash price violations,” or improper charges being included in the amount financed.
Federal Odometer Act – The Federal Odometer Act is is a narrow federal law that protects consumers from those who tamper with a vehicle’s odometer. The Act provides for damages and attorneys’ fees for a consumer affected by someone rolling back the miles on a car or truck purchased by the consumer.
This is just a brief summary of some laws and causes of action available to consumers in the car fraud context. Every case is different, and you should contact a lawyer regarding your specific situation.
Related posts:
- Can a Car Dealer Roll Back Miles on an Odometer and Simply Sell the Vehicle as “Not Original Miles?”
- “Washing the Title:” It Sounds Like a Great Thing, but It is Simply a Way for a Car Dealer to Hide a Salvage Title
- Federal Salvage Car Database
- Texas Car Dealers Must Keep Complete Records of a Sale
- Texas Law Provides Added Protection for Consumers Defrauded by Car Dealers
March 19th, 2009 at 10:30 am
Hi i have a case pending in frederal court for fraud and many many other claims against car large dealership i would just like to know why the dealer has their insurance co. involed. we have adr set date
March 19th, 2009 at 11:14 am
We don’t offer legal advice to any one person in this blog but instead provide general information. However, it is common for large car dealerships to have insurance to cover claims by customers. A dealership with insurance coverage will usually file a claim against its insurance policy if sued.
July 14th, 2009 at 10:00 pm
Purchased a vehicle from south bay auto, 4 months later vehicle broke down, dealership said not responsible. Vehicle sitting in yard now. Received a call from investigator, advising of outstanding warrants on vehicle. Called DMV, warrants are against original owner before the dealership. I am being harrassed and told I’m going to jail. would you please advise.
July 15th, 2009 at 7:24 am
We don’t provide legal advice in an open forum, such as this blog, and we only represent Texas residents. I suggest that you go to http://www.naca.net to locate an attorney for a state other than Texas.
July 18th, 2009 at 7:49 pm
I have been looking at used cars (At small used car lots) over the last couple of weeks and have found that every car I went to look at had a dead battery. At first I thought this to be no big deal because they do sit with out being driven. It then hit me later when I noticed the sales men just walking out with a car jump start box. If they keep the battery dead you will not know if the check engine light comes on until you have bought the car and driven it over 100 miles.
All the cars are marked “As-Is” but I can not believe this practice could be anything other than fraudulent.
It was not every lot I went to but it was a common sight. Is there some one that this should be reported to?
This seems to be an issue that has shown up more lately,
Two years ago a friend bought a car then 3 days later found out that the check engine light was on and the person had just reset the computer before the test drive. She ended up sending the car to a junk yard because it was going to cost 3 times the value of the car to get it fixed.
I may want to say that it is in Dallas where the check engine light being on is an automatic fail on the inspection.
October 13th, 2009 at 6:33 pm
IF a used car from a dealer breaks down and 1 week. Is there a rule that the dealer has to fix the vehicle. Or a time period that qualifies
October 14th, 2009 at 7:59 am
The law will vary from state-to-state. However, as a general rule in Texas, a dealer who sold a car “as-is,” without a warranty or other representations as to certain conditions, does not have to repair mechanical issues with a car. However, if a car was previously wrecked or damaged in some other way, the dealer might have some responsibility.
October 23rd, 2009 at 9:42 am
sS it legal for a car dealership to tell a reference from loan application personal/ private information when trying to reposses a vehicle? Personal info such as conversations, amount past due, family situations was revealed to a person we used as a reference when applying for the loan. If illegal, what recourse might be taken?
October 23rd, 2009 at 10:06 am
The laws of each state differ as to what a car dealer can and cannot tell someone other the than the consumer who owes a debt for a car. However, in Texas, a car dealer cannot make calls to anyone with the intent to harass a person at the called number. There might be claims for such a situation undet the Texas Debt Collection Act (Texas Finance Code Chapter 392).
January 24th, 2010 at 10:34 am
I bought a used car about a week ago. I asked for all the documentation I could about the inpection report, which the dealership said, they normally don’t give it out unless it is requested. It had a gaint list if things they inspected. I rolled down a window and it wouldn’t go back up. One of the things they said they inspected was the power windows, but no problems were reported on the inspection report, just a filter they said they replaced. Another thing they said they inspected was the glass for chips and cracks. I also notices a small chip on the windshield, which was also unreported by the dealership. Does this sound like a violation of the deceptive trade practices act? Is there any recourse for me to take?
January 27th, 2010 at 5:05 pm
You might have a claim under the DTPA if you live in Texas. However, it might be difficult to find an attorney to take the case on a contingent-fee basis unless there were fairly serious undisclosed problems.
February 18th, 2010 at 9:27 pm
Car was purchased this afternoon (financed), the same exact vehicle was listed on the dealers website for approx. 2,000.00 cheaper than what I paid. I printed the listing and took it to the dealers for an explanation and was told that was the “cash price”. Is this legal?
February 19th, 2010 at 9:08 am
It sounds like what happened might be a classic “cash price” violation, assuming that you obtained financing to purchase the car. A dealer cannot generally increase the price of a vehicle to a buyer as a result of the buying obtaining financing to purchase the vehicle. Depending on how the sale documents were drafted, the sale might have violated the federal Truth in Lending Act (“TILA”). If the sale occurred in Texas, it might have also violated the Texas Finance Code.
May 5th, 2010 at 2:24 pm
I purchased a used car at full KBB retail from a large TX dealer, and shipped it to CA, where I live. There was a long list of undisclosed serious mechanical issues, including several safety issues. Company website vehicle ad had beautiful pics and claims “Totally serviced, inspected, detailed, and ready to show”. Immediately took to repair shop on the first day. Broken CV axle, completely worn out struts, completely worn out clutch, engine oil leak, power steering leak, completely rusted out muffler… etc. $2,000+ repair bill. Have before and after pics, full repair invoice, and screenshots of falsely advertised claims. What are my chances of winning a legal claim to recoup immediate losses?
May 5th, 2010 at 3:58 pm
I would contact a California attorney to determine your options.
June 15th, 2010 at 8:44 am
I purchased a new BMW car with 303 miles in May 2009 from a dealership 50 miles away. The salesperson had mentioned that when it shipped the windshield was cracked and replaced but was obviously a warrenty item. In September 2009, the windshield had a leak and I took it to a dealership in our city for repair. Last week June 11, 2010, I received a bill from the local dealership. Upon calling, they stating the window repair wasn’t warrenty work and my car had been in a wreck in which their was $11,500 in damage. I checked with the original dealership and they confirmed that the car had been used as a loaner, had been wrecked and repaired without reporting it to Car Fax or myself. They had submited the sale of my car to their corporate office as a new car as I was receiving a .9% interest rate. This is negligence, is it also fraud? What are my legal rights? In my situation, what would you recommend?
June 15th, 2010 at 9:04 am
Do you live in Txas? If so, feel free to contact our office at (214) 670-9989. If not, you might attempt to find a lawyer in your state at http://www.naca.net.
August 25th, 2010 at 10:54 am
WELL I HAVE A LAWSUIT PENDING AND MY LAWYER SAID THE CAR LOT THAT IM INVOLED IN THE LAWSUIT WITH HAS ALREADY USED 25,000 OF THEIR LOT INSURANCE AND THEY WILL NOT BE COVERED MY LAWYER HAS TOLD ME TO FIND IF THE MAN HAS ANY OTHER ASSETS AND IM HAVING A VERY HARD TIME TRYING TO FIND THAT INFO CAN ANYONE HELP ME AT ALL?