It’s illegal for a dealer to sell you a damaged vehicle without disclosing the car’s condition, but some do. They may use illegal practices to conceal a vehicle’s checkered past or omit the car’s previous problems when talking it up to a customer. Or, they simply may not know the vehicle is not in good condition. If you discover your shiny new ride is a dud, you may have legal recourse to get your money back.
TL;DR (Too Long; Didn't Read)
If a dealer sold you a damaged car without providing a disclosure about the damages, you have the option of reporting the dealer to the state or filing a lawsuit.
Calling the State
If you suspect you’ve been scammed by a dealer, consult your state’s consumer protection agency, which is often the state’s attorney general. In most states, the attorney general has a unit dedicated to investigating frauds and scams. In the time it takes to update your status on your favorite social networking site, you can file a report by completing an online form or downloading a form and mailing it in.
File a Lawsuit
Your state’s Attorney General’s Office may file suit against a dealer if it finds the dealer violated consumer protection laws. However, the attorney general won’t file a lawsuit to help you recover your money. If you have been unable to resolve the problem any other way, the burden’s on you to make the dealer pay up by filing a lawsuit. Some states require consumers to try to work things out with the dealer first, but if you do head to court, find an attorney who specializes in auto dealer fraud.
Common Scams
Unscrupulous dealers use several tricks when trying to unload a damaged car on an unsuspecting buyer. In a practice known as curb stoning, dealers enlist a salesman to sell the damaged car through the classifieds as though it’s a private-party sale. Before you hand over any of your hard-earned cash to a stranger, check the car’s title history, which may reveal the vehicle recently changed hands or that the name on the title is different from that of the person selling it.
With title washing, another common scam, dealers move a vehicle across state lines, sometimes repeatedly, getting a new title each time. Titles usually show damage or salvage, but because titles differ from state to state, scam artists can sometimes “wash” a vehicle’s title by moving it. To protect yourself, buy only from reputable dealers and get a title guarantee in writing from the dealer.
Protecting Yourself
Before you buy a car, research the dealer and the vehicle. Check for complaints filed with the Better Business Bureau or for recalls. Your secret weapon is the car’s vehicle identification number, or VIN. You can use the VIN to order a vehicle history report, which will reveal the vehicle’s dirty little secrets, including if it has flood damage, has been involved in a wreck or been labeled a lemon. Your state’s motor vehicle department can also help you research the vehicle’s title. If you see notations on the title like “salvage” or “rebuilt,” that’s a red flag the vehicle has had more than its share of dents and dings.
Use the “Lemon Law”
The Song-Beverly Consumer Warranty Act, also known as the “lemon law,” protects consumers if they purchase a new vehicle that is damaged or otherwise inferior. Under the lemon law, you must report the problem in writing to the manufacturer while the vehicle is still under warranty or within one year of purchase, whichever is earlier.
The lemon law isn’t a quick fix, though. Before you can use it, you must give the manufacturer or dealer a “reasonable number of attempts” to fix the problem. If the dealer cannot fix the problem, the dealer must take back the vehicle and refund your money, including fees and taxes, or replace the vehicle with a comparable set of wheels.