California auto dealer fraud involves deceptive practices that automobile dealers use during the advertising, price negotiation, sales, and financing of a vehicle. Dealer fraud can occur at any stage of the vehicle purchase process.
Unfortunately, most consumers are not aware that they may be victims of auto dealer fraud until it’s too late. This is because they are simply unaware of their rights. We encourage you to look at the different types of auto dealer fraud and contact us if you believe you are a victim.
Here Are Some Common Types of Auto Dealer Fraud:
Non-disclosure of the previous taxi, limo, and rental
Former taxicabs, limousines, rental vehicles, and publicly owned vehicles usually have very high mileage and a lot of wear-and-tear. So they may cost 10-60% less compared to similar vehicles not used for commercial purposes. It can also significantly reduce the resale value of the vehicle. If the dealer doesn’t disclose whether the vehicle was a previous rental or taxi, then they are conducting fraud.
Non-Disclosure of Frame Damage
Many used cars have pre-existing conditions, such as frame damage or body damage. In this case, the selling party must give the buyer a written disclosure notice of those conditions. If the vehicle has frame damage, it will usually cost 30-70% less than similar vehicles that have no frame damage. Note that frame damage can pose serious safety threats.
Non-Disclosure of Previous Accident
The dealership must give a disclosure prior to selling a vehicle if it has been in an accident. In addition, the selling party must also provide a truthful response to questions and may not make any statements without definite knowledge of their validity.
Non-Disclosure of a Salvage Title
In some cases, an accident may be so severe that the vehicle can get the title of “total loss.” A “total loss” is when the cost of a proper repair exceeds 70% of the vehicle’s market price. These vehicles should be repaired at licensed repair facilities. Also, they should be inspected for safety. If the vehicle passes the safety inspection, the seller must sell it with full disclosure of its salvage title status.
Non-Disclosure of an Accurate Condition of The Vehicle
Some used cars often have pre-existing conditions that the seller is fully aware of. They must properly disclose these conditions to the buyer at the time of sale. Some pre-existing conditions may cause serious safety threats and financial losses. So, it is important for the consumer to know all the details prior to making the purchase.
Non-Disclosure of a “Lemon Law” Buy-Back
If a manufacturer has previously repurchased a vehicle due to it being a lemon, then the dealer should disclose this fact to the customer.
Mileage fraud or Odometer Rollback
Odometer fraud is a common car dealer fraud practice. Car dealers that tamper with the odometer intend to conceal a used vehicle’s mileage, which in turn, can significantly reduce the value of the car.
Improper Certification of Used Cars
When it comes to selling a used car, certification is a major point. The value of a vehicle significantly increases if it is certified. An improper certification is a form of auto dealer fraud. This is when the dealer advertises the vehicle as certified but in fact, it is not.
Advertisement of Special Equipment or Accessories
Sometimes the dealer advertises a vehicle as having special equipment or accessories included in the purchase price. There may be cases when the special equipment or accessories are not included. Or they are not operative.
”Bait and Switch” Advertising Practices
This is a form of fake or unreliable advertising. The car dealer lures customers to the dealership by advertising a vehicle at a certain price. Then they tell the customer the vehicle is no longer available. This is an attempt to sell a different, more expensive vehicle.
Usually, the dealer sells a warranty with used vehicles at the time of purchase. The dealer must supply it to the purchaser and give a disclosure of what it covers. Warranty fraud is when the dealer dishonors a contractual agreement. Or when a product is not as it should be.