New Auto Dealer Fraud

Car Dealer Fraud

You’ve finally gotten work with a salary that you can afford to buy a car and pay for the insurance, gas, and garage expenses. You went to a major dealer with a strong reputation and bought one of their inspected and certified used cars. You asked to have the car inspected by your own mechanic, but they assured you that was unnecessary, because they had already done it, and being the dealer for that brand, they saw a lot more of this kind of car and knew much better what to look for. You believed them and bought the car.

The next day, the car won’t start / makes a horrible grinding sound / clicks loudly, especially when you release the brakes after using them / stalls in inconvenient and potentially hazardous driving situations / belches blue smoke out the rear / smells like dead rodent / more than one of the foregoing / all of the foregoing. The dealer refuses to perform any repairs or take back the car.

First, whey buying a used car, always, always, always have it thoroughly inspected by a mechanic whom you trust. If you don’t know a mechanic, find someone you trust who will recommend one. Have them inspect everything, not just the engine. Include the tires, the brakes, the body, the frame, the steering system, the exhaust system, the interior upholstery and fittings. They are likely to notice details you might miss. Have the mechanic make a comprehensive list of everything that needs to be fixed. Add anything you notice from your own inspection. Now you can decide whether or not to buy the car, and you have a third party’s independent opinion about any problems that you might point to in order to bargain down the price.

If a dealer won’t let you take the car to your own mechanic, run, don’t walk. No reputable and honest dealer will refuse you this protection. If he does, it’s because he has something to hide. That includes the major European and foreign brands. Their “certification” is a nice advertising device, but it means nothing.

Now, what to do with your problem car? Same answer. Take the car to a trusted mechanic. Have him do a comprehensive inspection of every part of the car, including parts he does not work on, like the body work and tires. Have him prepare a written report of everything that needs fixing and an estimate of the cost of repairing each item. Where possible, ask him to include how the defect occurred and how long it is likely to have been there. Auto repair places are accustomed to preparing such comprehensive reports for insurance companies. They do it all the time. Not a big deal.

Send this written estimate to the dealer with a demand that he either agree to perform the listed repairs or pay you the estimated cost of the repairs, so that you can have them done yourself. Give them 7, 10 or 14 days to respond. This should be a letter with a signature, not an email. You can attach the letter and estimate to an email to get it there, but make it a letter with an actual signature. Phone calls don’t count.

If they don’t respond, sue them. In California, you can sue in small claims court for up to $10,000.00. The forms are available online. Most courts have volunteers who conduct workshops to show you how to fill out the forms, how to “serve” the papers on the other side, how to prepare and present your case at trial, and how to collect your judgment. Nolo Press in Berkeley www.nolo.com has two excellent step-by-step guides: Everybody’s Guide to Small Claims Court and Everybody’s Guide to Small Claims Court in California.

One downside to suing in small claims court in California is that if you lose, the plaintiff has no right to appeal. You chose the small claims court. If you don’t like the decision, too bad. You chose it. However, the defendant can appeal to the regular court and get a completely new trial, and attorneys will be allowed at that trial. Such appeals are rare, but it is still a serious disadvantage to the plaintiff which you need to be aware of.

No, you cannot afford an attorney. Most lawsuits cost more than $50,000.00. Even if the lawsuit could be done for $20,000.00, most auto repairs cost a lot less than $10,000.00. Even if there are several things wrong with the car, the total rarely is more than $10,000.00. Even if there is an attorneys fees clause in the contract, most cases settle, and the first thing the plaintiff is forced to give away in such negotiations is her claim to recover her attorneys fees. You get attorneys fees only if you go through with the trial and win.

If the repairs cost a little more than $10,000.00, you can sue for and claim only the $10,000.00, but go ahead and prove the full amount you paid or need to be made whole. That way, if the judge is considering giving you half or three-quarters of your claim, you hope he will award you half or three-quarters of the higher amount which is required in order to make you whole, rather than half or three-quarters of the small claims court maximum.

The best result and solution is to get the car inspected by someone you trust before you buy it. I am the third owner on my car. I have driven it over 100,000 miles in 13 years, and I have had no problems with it. Before I bought it and before I told him the price, my mechanic told me that if I didn’t buy it, that he would, and he didn’t know the price.

I hope you have the same success with your next car.