When you buy a car, you are at the mercy of a car dealer. Automobile purchases are complex transactions, and a buyer is often in the dark about essential terms involving price and financing. Laws exist to reign in some of this unfairness, prohibiting dealerships from using misleading advertisements and misrepresenting vehicles’ features and conditions. Several of these laws allow consumers defrauded by car dealerships to recover for actual and exemplary damages. If you believe you are a victim of fraud by a car dealership in New York or New Jersey, Rosenblatt Law PC can examine your case and assess your right to recovery.
Types of Car Dealership Fraud
False or Misleading Advertising
State law prohibits using bait and switch tactics in automobile advertising. Bait and switch tactics include advertising a lower price than the vehicle’s price with no intent to honor the advertised price, or suggesting the advertised vehicle includes many options when the vehicle for sale is the base model. Other prohibited advertising behavior includes failing to disclose certain conditions required to accept an offer and using specific language such as “lowest price” or “rock bottom pricing” when those terms are unsubstantiated.
Adding on Fees without Proper Explanation
Every state requires that auto dealerships explain every fee charged to a customer. Many dealerships charge dealer administrative fees and must also charge state sales tax and registration fees. However, dealerships can get into trouble if there is no legitimate explanation for the fee charged, such as a vehicle preparation fee or a showroom fee. Any fee included in the total price must be detailed in a bill of sale or sales contract.
Charging for Options or Upgrades Not Included
In the past, many dealerships have gotten into trouble for charging for options or upgrades that were not included or made to a vehicle, such as an underbody rust coating or protective finishes. Many dealers think they can get away with charging for these fees without performing the upgrades because it is almost impossible for the average consumer to verify whether the upgrade has been made to the vehicle. But charging for upgrades and failing to include them in the vehicle amounts to fraud.
Obtaining a loan to buy directly from a dealer presents many opportunities for fraud. The dealership may not identify all the loan terms, charging extra fees, or sticking purchasers with high-interest rates or monthly payments. In other situations, dealers trying to make a deal work inflate a borrower’s creditworthiness without them knowing. In these cases, auto loan originators will falsify income information or credit ratings, which may allow a buyer to qualify for a larger loan. Usually, the buyers cannot afford the monthly payment and quickly default on the loan. In these cases, buyers suffer damages associated with losing a vehicle and injury to their credit report.
Failure to Honor Warranties
Many times an auto dealer, especially one selling used cars, will make it clear the purchase of a car includes only a limited warranty or no warranty at all. Warranties are guarantees that a vehicle will serve its intended purpose. If a purchase transaction includes a warranty, a dealer may violate the warranty by refusing to fix any issues impairing the car’s operation.
Violating Lemon Laws
Under New Jersey’s Used Car Lemon Law, for example, dealers must provide limited warranties to consumers of used passenger vehicles only, depending on the amount of mileage. Dealers are also required to correct a covered material defect involving the engine, transmission, front-wheel drive, or rear-wheel drive.
The consumer may be entitled to a refund of the used vehicle’s purchase price if (during the dealer warranty period): (1) the dealer has not been able to repair the material defect after at least three attempts, or (2) the vehicle has been out of service for 20 cumulative days while the dealer was attempting repairs.
It is worth noting that not every transaction in which a consumer is dissatisfied with the dealer is covered under the new and used car lemon laws of New York and New Jersey. The defect must impair the use, value, or safety of the vehicle.
Rights Available to Vehicle Purchasers
Some violations of state law, such as fraudulent advertising, may only be pursued by the state attorney general on behalf of the public at large. In many cases, buyers just want the vehicle they thought they were buying, and a letter from an attorney threatening to take legal action will prompt the dealer to fix the situation. However, other more egregious violations that harm individuals must be remedied by filing a lawsuit against the dealer.
Discuss Your Vehicle Purchase with an Experienced Car Dealership Fraud Attorney
Licensed in both New York and New Jersey, Rosenblatt Law, PC can help you determine whether you have any legal rights against an automobile dealer. If you believe you are a victim of automobile fraud, contact attorney Raphael Rosenblatt today to discuss your situation.