Do Lemon Laws Apply in Auto Dealer Frauds

You’ve recently bought your dream car but can’t shake off the feeling that you just got swindled. Despite the dealer marketing it as a brand new vehicle, it has been exhibiting major defects you hardly expected. Many buyers fall prey to auto dealer frauds which can be costly especially if you’re financing a loan to pay for the vehicle.

Most state and federal laws penalize fraudulent marketing, sales, and financing schemes. Knowing your rights and if the state’s lemon laws apply is critical to getting compensated. We explain more about auto dealer frauds, the different types, and the best time to hire an attorney.

What is an Auto Dealer Fraud?

It’s an unlawful and deceptive practice used by auto dealers at any stage of the vehicle buying process from advertising, negotiation, to financing terms. Here are the different types of auto dealer frauds.

Presenting False Statements about the Price

After looking at different models and negotiating the price, you may find that the final cash price is higher than what you agreed on in the contract or the advertised price. The dealer may have inflated the price without disclosing it to the buyer. Sometimes the dealer presents certain upgrades required to compel the customer to pay for them. Sadly, many buyers only realize they have been victims of auto fraud after talking to a lawyer.

Bait and Switch Advertising

This type of fraud occurs when the dealer advertises a car at a price that’s no longer available. If you want to take advantage of the said price, financing deal, or other such bait, they may tell you the offer is no longer available and compel you to buy something different. The idea is to get you excited and emotional causing you to purchase a different car at an inflated price.

Selling Bad Vehicles

It is the most common type of auto fraud. Dealers sell a vehicle without disclosing a history of damage such as the salvage title due to frame and body destruction and other title blemishes. Sadly the dealer may use the as-is clause to avoid liability when the buyer launches a complaint after buying the vehicle. It would help if you enlisted the help of a lawyer to advise you on available options for launching the fraud claim.

False Odometer Readings

Californian law attorneys find this type of fraud popular in dealerships selling used cars. The dealer rolls back the odometer to ensure the car has a shorter mileage. According to the National Highway Traffic Safety Administration, dealer shops sell more than 450,000 vehicles with false odometer readings.

Credit Application Fraud

Common tactics car dealers employ during credit application include:

  • Inflating the applicant’s income
  • Misrepresenting the applicant’s job title
  • Inflating the value of the vehicle so it appears as if the borrower has made a down payment
  • Indicating the applicant has a job when they don’t have

When Does the State’s Lemon Law Apply?

In the case of auto frauds, the state’s lemon laws apply if the car has been in a repair shop multiple times due to the same problem. Generally, the law requires:

  • The manufacturer or dealer to replace the defective new car if it hasn’t been fixed after two tries or out of service for 30 days
  • The manufacturer to refund or replace the defective new car if it hasn’t been fixed after four tries

Don’t Wait – Talk to an Attorney Today

If you’ve fallen prey to any of the fraud dealership practices mentioned above, it would help if you hired an experienced lawyer in California. 

Attorneys at RS Law Offices are well-versed in this field and will strive to help you get compensated.

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