What is Auto Dealer Fraud Law?

Auto Dealer Fraud Law

Auto dealer fraud is rather a common practice these days. Hence, auto dealer fraud law may be quite useful for those car shoppers who have suffered dealer fraud. Auto dealer fraud law consists of state and federal rules that are meant to protect those consumers who have been cheated by dealerships.

Such laws should be clearly differentiated from the so-called ”Lemon laws.” The thing is that auto dealer fraud laws deal with deceptive acts practiced by car dealers. Lemon laws deal with the sale of defective vehicles. In other words, in auto dealer fraud cases, the dealerships are to be blamed, but in Lemon law cases the manufacturer is to be blamed for selling a defective product.

Auto dealer fraud is a complicated phenomenon; it consists of various types of tricks and scams that may be rather difficult to detect. Following is a brief description of several types of dealer fraud:

Non-disclosure of frame damage

If the frame of a vehicle has been damaged, that vehicle will most probably lose much of its value. Such cars are rather dangerous to drive as they may undergo severe damages and may cause injuries to the driver and the occupants. The thing is that independent of the fact how dangerous such vehicles are, some dealers may sell them without telling the potential car shopper about frame damage. This is, obviously, a way to make extra profit from car purchase.

Non-disclosure of Lemon law buyback

Those vehicles that have been titled as Lemon vehicles are usually bought back by the manufacturer. Later on, the manufacturer repairs these vehicles and returns them to the market. However, such cars always have the title of  ”Lemon buyback” on them. The dealership should inform the potential buyer that the vehicle in question has got that buyback title, otherwise, the car shopper may have the right to sue to the dealership for not disclosing known facts about the vehicle to him/her as a potential buyer.

Non-disclosure of previous rental or demo vehicle

This is another common type of auto dealer fraud. Previous rental or demo vehicles are usually used as much as any other used vehicle is. Hence, it is unfair to represent a previous rental or demo vehicle as brand new. If the dealership tries to sell you a demo vehicle at the same price as a brand new car, then walk out of the dealership and try to find another vehicle with more honest salespeople.

Odometer fraud

This is another common type of auto dealer fraud. The auto dealer fraud law covers those people who have suffered this kind of fraud. This is the case when scammers roll back the odometer of an old vehicle to make it seem younger. Vehicles with high mileage readings usually cost lower that those with lower mileage. It is the violation of the law to sell vehicles with rolled back odometers, though many dealers still practice such kind of fraud these days. Learn more about odometer fraud by reading our article Many Faces of Odometer Fraud.

Vehicle advertising fraud

This fraud consists of several others that are rather difficult to detect. Some dealers advertise special equipment and accessories and charge huge amounts of money for them. Other dealers practice the so-called ”Bait and Switch” fraud that involves advertising one vehicle and selling another so that to gain more profit.

By knowing what auto dealer fraud law is, in general, you will be able to sue those dealers who have ripped you off. If you think you have already been cheated by a dealer, you can contact an auto dealer fraud lawyer for legal help. The Margarian Law Firm is a California-based law agency that deals both with auto dealer fraud and Lemon law cases. Contact us at 818-553-1000 for more information.