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Auto Fraud

Purchasing a new or used automobile is a major investment for the average American today. Not only is there the initial cost of the automobile itself to consider. In a commuter society, reliable transportation is a key factor to financial prosperity for most Americans. Many of us depend on our cars to get to the places where we can earn more money, so that we can not only pay off the car loan, but also the car insurance, the mortgage, the credit card, and the household bills. Having a dependable vehicle is as central as ever to the way most Americans earn their daily bread.

The last thing an auto buyer should expect after buying a new or used car are problems that result from auto fraud, which occurs when the seller of the vehicle either fails to disclose the complete history of the car you are buying, or alters or destroys evidence pertaining to any part of the vehicle's age, condition or inherent or acquired defects. Auto fraud can come in a variety of forms when purchasing a used car. Odometer rollbacks, salvage or flood vehicles, yo-yo sales, credit consolidation sales, and resale of damaged vehicles without full disclosure are all examples of auto fraud.

The Consumer Law Group represents people who have been victims of auto fraud when seeking compensation for the purchase against car dealerships. Through our years of legal experience, we have learned that in many cases auto buyers could have avoided auto fraud if they had taken a few precautions. Below we have listed six simple tips every consumer should consider when purchasing a used car.

SIX QUICK STEPS TO AVOID AUTO FRAUD:

Tip 1: Make friends with a mechanic

A mechanic can be your best friend when it comes time to purchase a car. More than anybody else, a good and experienced mechanic can tell you the specific problems to watch out for when buying a particular brand or model of a car, and can also tell you which cars are relatively hassle-free. Based on what type of car you are looking for, your needs for the car could widely vary. Once you know the type of vehicle you want, twenty minutes talking to a friendly mechanic can help you determine the best manufacturer.

Tip 2: Arrange for financing through your bank or credit union

Whenever possible, you'll want to seek financing approval from your bank or credit union before shopping for your car. Banks almost always offer a substantially lower rate than what a used car dealership will offer. If you have a prior lending history with your bank and are in good standing, you can usually receive up to 90 per cent financing. Car dealerships make huge profits by providing their own financing to auto buyers, so they want you to borrow from them. By securing an auto loan through your bank for an amount you can afford before purchasing a car, you'll find yourself in far more control when negotiating a final price.

Tip 3: Ask for a copy of the warranty, take it home and read it

Many used car dealers are notorious for providing "dealer warranties." While the big print in these documents promises comprehensive coverage and prompt service for the vehicle you buy, it is the small print that dealers refer to when something actually does go wrong with your car. The phrase "wear and tear items not included" is a common one in dealer warranties, and one you will hear over and over again if your car begins to have problems.

Remember that car dealers are always trying to increase the final sales cost of your car through add-ons and features. A dealer warranty is often pitched as a vital add-on by the car salesperson, but unfortunately, when push comes to shove the true value of the warranty is sometimes questionable. Make sure you clarify exactly what is covered with the car salesman. If your concerns are not explicitly answered in the warranty, ask for a signed, authorized amendment from the dealer with the correct wording that you are seeking.

Tip 4: If necessary, amend the warranty to protect yourself from Lemon fraud

After you have satisfied yourself that you are getting adequate repair and maintenance coverage for the price of your warranty, you'll want to make sure the following statements are somewhere on the warranty:

"THIS CAR HAS NOT BEEN RETURNED TO A DEALER OR MANUFACTURER BECAUSE OF LEMON LAW DEFECTS OR COMPLAINTS."

"THIS CAR HAS BEEN INSPECTED FOR COLLISION DAMAGE AND COLLISION REPAIRS AND HAS BEEN FOUND TO BE FREE OF COLLISION DAMAGE OR REPAIRS."

If these statements aren't on the warranty, insist that they be added, acknowledged and signed by an authorized representative of the dealership.

Tip 5: Take it for a long spin

Leave a copy of your driver's license with the dealer and take the car out for a while. Drive the car in multiple road conditions: city streets with heavy traffic, highways with open spaces, straight and curvy roads, and hills. Test the brakes, steering, features, air conditioning and gauges. If you can arrange it, pick up your new friend the mechanic and bring his highly trained ear along for the ride. Let him take a look under the hood. If he likes what he sees, and you have faith in his judgment, then you are probably in good shape.

Tip 6: Don't be in a rush

Above all else, don't let a car salesman rush or cajole you into a one-day, stop and shop sale. Avoid impulse buying. It is to the salesman's benefit, and only his benefit, if the sale happens quickly. It is to your benefit to do as much research as possible to insure you purchase a safe and reliable vehicle. You should be prepared to spend at least two weeks doing adequate research before making a used car purchase.

Frequent Questions for Auto Fraud:

Case Results for Auto Fraud:

Web Resources for Auto Fraud:

  • The Virginia Consumer Protection Act

    Description: Every consumer should know the law in order to protect your rights. Read The Virginia Consumer Protection Act.

  • CarFax.com

    Description: Order a CarFax Vehicle History Report, which is the first step to protecting yourself against buying used cars with costly hidden problems.

  • AutoCheck.com

    Description: Get a Vehicle History Report to help you make a purchase decision.

  • Edmunds.com

    Description: Edmunds.com provides “True Market Value” pricing, unbiased car reviews, ratings, and expert advice to help you get a fair deal.

  • The Car Care Council

    Description: Before you buy a used vehicle, have it inspected by a qualified mechanic that routinely does automotive diagnostic work. A thorough diagnostic should cost around $120. This organization certifies diagnostic shops.

  • Motor Vehicle Dealer Board

    Description: The Motor Vehicle Dealer Board will administer sections of the Commonwealth’s Motor Vehicle Dealer Laws and Regulations as charged; promote the best interests of both the automotive consumer and dealer body; and process all motor vehicle related complaints promptly and professionally; while providing a high level of customer service.

  • EIGHT THINGS TO DO WHEN BUYING CARS

    Description: Eight Tips For Buying Cars

    • View All

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