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Auto Dealer Fraud

Purchasing an automobile is a major investment, which consumers should not take lightly. The purchase of a new vehicle requires extensive research before ever setting foot on an auto lot, while looking at and test-driving new cars, and most importantly, before signing a sales contract. Used cars require a considerable amount of due diligence into the condition of the vehicle and the terms of the sale. Any vehicle purchase requires a healthy amount of skepticism about the trustworthiness of the dealer. Financing all or part of the purchase price, when necessary, brings up a whole different set of concerns regarding consumer rights. Consumer protection statutes address many of these concerns, but consumers should also take steps to educate and protect themselves.

Dealer fraud generally refers to a situation where an automobile dealer employs deceitful practices in order to secure a sale or to make more money through a sale than the buyer intended to spend. Dealer fraud can occur during the advertising process, during the deal negotiation, or at the actual time of purchase.

There are many types of dealer fraud. Consumers often complain about a fraudulent tactic called the “bait and switch.” In the bait and switch, the dealer advertises a specific car, then, when the buyer arrives, the dealer explains that that car is no longer available, and instead pushes the buyer towards a different vehicle. Of course, there could be legitimate reasons for the original car to no longer be available. An experienced dealer fraud attorney can help you defend against this complaint and clear your name of the charges brought against you.

The other serious type of dealer fraud is mileage rollback. It is important to keep clear documentation on all cars to ensure you can defend against this type of accusation. If you need more information about mileage rollback or dealer fraud in general, seek the legal counsel of a dealer fraud attorney today to get your questions answered and assess your susceptibility to such accusations.

Another common forms of auto dealer fraud include:

  • Inflating the total purchase price above the invoice or sticker price, such as by concealing options the consumer did not request, or by including other unapproved and undisclosed fees;
  • Undervaluing or underpaying for a consumer’s trade-in vehicle;
  • Falsely representing a used vehicle, including one originally purchased from the dealership and then returned, as “new”;
  • Representing that a new or used vehicle has features or options that it does not have;
  • Claiming that a warranty offers protections that it does not offer, or falsely representing an extended service contract as an extended warranty;
  • Failing to disclose past damage from an accident, flood, or fire in a used car sale;
  • Withholding any other material information about a new or used vehicle;
  • Misrepresenting a consumer’s credit score or eligibility for financing in order to get him or her to agree to a higher interest rate or other unfavorable terms;
  • Falsely stating that a consumer who is leasing a vehicle will own the vehicle when he or she finishes making payments;
  • Allowing a consumer to drive off the lot with a vehicle under the false belief that a loan application is pending and then having the consumer return to sign for a different, more expensive loan, known as “yo-yo financing”; and
  • Backdating new financing documents to the original purchase date.

Unfortunately, car dealer fraud is not usually detected until the damage has been done, and the buyer has already spent too much time and money trying to figure out what is wrong with their vehicle. Car Dealership fraud are well documented, and well planned by the salesmen and loan-departments who are looking to make extra money from a sale.

If you think you might have been the victim of auto dealer fraud, qualified attorney may be able to help you get satisfaction. He  can inform you of your rights and help you prepare a strong defense. An attorney can help you determine if the dealer’s actions were in fact fraudulent. The attorney can also advise you on the best course of action for your particular circumstances.

About the author

Thomas Elliott

Education: Brooklyn Law School, Brooklyn, New York. Pace University, White Plains, New York.
Professional Associations and Memberships: American Bar Association, New York State Bar, The Association of the Bar of the City of New York, Brooklyn Bar Association, National Academy of Elder Law Attorneys (NAELA).

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