Buying or leasing a car, SUV or truck can be a stressful process at every step of the way—from selecting a vehicle and negotiating a price with an auto dealer, to arranging for financing, and reading and signing a pile of complicated legal documents. While most car dealers are reputable, some engage in a variety of fraudulent scams.
If you or someone you know has been the target of auto dealer fraud, having an experienced consumer law attorney on your side is invaluable.
Timothy Abeel & Associates represents vehicle buyers and lessees in auto dealer fraud claims in Pennsylvania and New Jersey. To assist our clients and the general public in recognizing when and how dealer fraud happens, and avoiding being a victim of dealer fraud, this page provides some helpful tips about some of the most common deceptive and misleading tactics used by sketchy car dealers.
How to Tell If You Were a Victim of a Bait and Switch
Bait and switch advertising is a well-known tactic used to get potential customers to walk through the dealer’s door. There are several telltale signs that you were the target of a bait and switch auto dealer scam:
- The advertised deal was too good to be true. Typically, a dealer will lure customers by offering a “great deal,” but if the price for the car appears to be far too low, however, something is wrong. If you see a deal that looks too good be true, it probably is.
- When you arrived at the dealership, the advertised vehicle was not available or was already sold.
- The dealer did not honor the advertised deal, pushed a different vehicle at a higher price, or tried to talk you into a different deal.
- The fine print on the ad was hard to understand or confusing. For example, there were disclaimers at the end saying there are limited quantities available at the advertised price, or the deal is only available to “qualified buyers.”
- The pricing terms contained misleading quotes or misrepresented the full cost of financing the vehicle.
- You were told that all deals are final and non-refundable.
The law recognizes that the auto industry relies on advertising and marketing to reach customers, but there are specific limitations and prohibitions on how dealers can promote new and used vehicles. And the law assumes that dealers know the rules – ignorance is not an excuse. Any dealer that violates the rules on deceptive advertising is liable to the victimized consumers.
How to Protect Yourself Against Bait and Switch Car Dealers
The best way to not become a victim of bait and switch car sales tactics is to be prepared:
- Do your homework about the makes, models and options you want to consider BEFORE you enter a dealership.
- If you are looking for a specific vehicle, insist on seeing and purchasing ONLY that vehicle.
- If the dealer says the vehicle you want is not available, simply leave the dealership.
- Keep in mind that It if a car is advertised at a specific price, the dealer must sell the car at that price or have your written permission to switch you to a different vehicle.
Common Types of Odometer Fraud
Buying or leasing a preowned vehicle can save you a lot of money, but there are risks involved, including odometer rollback fraud. According to the National Highway Traffic Safety Administration (NHTSA), nearly 500,000 vehicles sold in the US each year involve some type of odometer fraud. If you believe you purchased a vehicle with a rolled-back odometer, you have powerful rights under state and federal consumer laws.
Odometer fraud or rollback happens when mileage readings on a vehicle are altered or changed to make it appear as if the vehicle’s mileage total is lower. Common types of odometer fraud include:
- Resetting the odometer to make the vehicle appear to have lower mileage than it has actually been driven.
- Disconnecting an odometer.
- Owning and operating—and then attempting to sell—a vehicle with an odometer that is not working.
- Replacing an odometer without providing required notice to the purchaser.
- Failing to disclose the actual mileage in writing at the time a vehicle is transferred or sold
- Failing to report an analog odometer that has rolled through all of the digits and restarted.
How to Detect Odometer Fraud
Both auto dealers and private sellers can easily rollback the mileage on an analog odometer with the right tools. Similarly, the newer digital odometers can be altered with software programs that are readily available online. Odometer fraud is relatively easy to do and a highly profitable scheme—consumers often end up paying thousands of dollars more for tampered vehicles than their actual fair market value.
The law requires a seller to provide written documentation of the total mileage recorded on an odometer when a vehicle is sold or its title is transferred. If the mileage shown on the odometer is known to be incorrect or the odometer has been replaced, the seller must acknowledge this in writing on the title to the buyer.
If you are purchasing a used vehicle, the following steps can help detect (and prevent) odometer fraud, including:
- Carefully inspect the analog or digital odometer to determine if there are signs of tampering.
- Look for signs of odometer replacement such as scratches near the dial, screws that have been replaced, or other evidence of dashboard removal.
- Compare the mileage on the odometer against the mileage recorded in vehicle maintenance and inspection records.
- Review the vehicle’s title and registration.
- Obtain a vehicle history report.
- Look for signs of vehicle wear and tear that should be consistent with the amount of driving miles shown on the odometer (worn seats, gas and brake pedals can be a warning sign of fraud).
- Inspect the tires – a low mileage vehicle should still have the original tires.
- Have a trusted mechanic inspect the vehicle.
How to Avoid New Dealer Return Fraud
New dealer return fraud happens when a dealer tells a prospective buyer that a vehicle is new, when it has actually been returned to the dealership because of a significant defect or persistent mechanical problem.
Some steps you can take to avoid being victimized by a new dealer return scam, include:
- Doing your homework about the reputation of the auto dealer by searching online for consumer reviews and complaints about the purchasing or service/repair process at the dealer. A history of unfair or deceptive practices can be a red flag that the dealer might try to pass off a defective car as brand new.
- Researching whether the make and model car you’re considering is suffering from a chronic defect that could be causing numerous returns. An online search for customer reviews and official manufacturer or NHTSA recalls can reveal a make or model with major malfunctions.
- Check the odometer for excessive mileage on what should be a new car (keeping in mind that, return fraud is often linked to another scam, odometer rollback).
If you have purchased a defective vehicle that was represented to you as “new” after it was returned to the dealer, the experienced consumer law attorneys at Timothy Abeel & Associates can help.
How to Avoiding Trade-in Scams
Although consumers have powerful remedies under state and federal consumer protection laws, the best way to avoid being the victim of trade-in fraud is to understand the value of your current car, and the difference between the vehicle’s retail and wholesale price. Before going to a dealer, consider having the car appraised, or confirm the car’s value on several used car websites such as Kelley Blue Book, Edmunds, TrueCar or other reputable online valuation sevices.
Although you may be better off selling the car privately for the retail price, if you must trade in your vehicle, the trade-in and the purchase should be handled as two separate transactions. In fact, you should negotiate the terms of the new car purchase first, before mentioning the fact that you want to trade in your current vehicle.
Rights You Have if You Purchased a Car that Was Flood-Damaged or Totaled
After a vehicle has been damaged beyond standard repair, the insurance company will declare the car irreparable and deem it to be “totaled.” The vehicle is then issued a so-called “salvage title” so that if the vehicle is sold in the future, there will be a publicly-available record to any potential purchasers that it was significantly damaged in an accident or flood. Although a salvage title may be listed on Carfax, auto dealers are required by state consumer laws to disclose defects of which they are aware.
Notwithstanding the laws designed to protect unwitting buyers, some car dealers will purchase salvage vehicles to repair and then resell them for far above their actual value. To close the sale, such dealers often intentionally fail to disclose that the vehicle has a history of being damaged beyond standard repair. Typically the repairs are incomplete, and the workmanship is poor. If the car with an undisclosed history experiences further damage, the law provides that the dealer is liable for the buyer’s losses.
Salvaged vehicles are also treated differently by insurance companies. If a salvaged vehicle is damaged in a post-repair accident, an insurer may only pay the policyholder a certain percentage of the cost to repair it, or may refuse to pay nothing more than the vehicle’s current fair market value (which is typically very low for a salvage vehicle). There are currently thousands of vehicles in Pennsylvania and New Jersey that have been salvaged and resold without title disclosures.
Future defects and malfunctions arising from salvaged vehicles can cause harm to the new owner, but with legal representation, the victims of salvage fraud can recover damages in a consumer fraud lawsuit if the dealership intentionally and knowingly concealed that a salvage title was issued for the vehicle.
If the driver and/or passengers are injured in an accident that was caused by undisclosed defects, the auto dealer can be also held liable in a personal injury lawsuit. Dealers engaged in illegal practices around salvage vehicles can also face other consequences, including fines and revocation of their license to sell cars.
Timothy Abeel & Associates Protects Car Buyers
At Timothy Abeel & Associates, we believe consumers have a right to be treated fairly and that auto dealers who engage in deceptive and unlawful practices must be held accountable. We have extensive experience in all aspects of consumer law and a well-earned reputation for successfully fighting for our clients’ rights. If you or someone you know has been the victim of auto dealer fraud, call our office today at 888.830.1474 for a free consultation or complete the contact form on our website. Someone on our friendly staff will respond to you promptly.