Previous taxicabs, limousines, rental vehicles, and publicly owned vehicles often have very high mileage and as such are generally valued at 10-60% less compared to similar vehicles not used for commercial purposes. Failure of the dealer to disclose any such prior use may result in financial losses on the part of the consumer due to a significantly lower resale value.
According to the California Vehicle Code, no holder of a dealer license shall advertise a vehicle for sale that was used by the selling licensee in its business as a demonstrator, executive vehicle, service vehicle, rental, loaner, or lease vehicle, unless the advertisement clearly and conspicuously discloses the previous use made by that licensee of the vehicle. An advertisement shall not describe any of those vehicles as “new.”
According to California Code of Regulations, express advertisements of a vehicle’s prior use or ownership history must be accurate. Furthermore, previous taxicabs, rental vehicles, publicly owned vehicles, insurance salvage vehicles and revived salvage vehicles shall be clearly identified as such if the previous status is known to the seller. If a vehicle is advertised and/or sold as a “demonstrator” and such a vehicle has been previously registered or sold to a retail purchaser, the selling dealer shall clearly disclose to the buyer the fact of such prior registration or sale before obtaining the buyer’s signature on a purchase order or sales contract.
Note that an “as is” sale does not absolve the selling dealership from the duty to disclose known facts and to refrain from making affirmative statements about unknown facts.
In the event the dealership fails to act in conformity with these laws, the consumer is entitled to remedies to include rescission of the purchase agreement and payment for actual damages, consequential damages, punitive damages, and costs of litigation. In most instances we are able to recover attorney’s fees as either consequential damages or punitive damages. Therefore, our clients obtain a full refund of all their payments plus often times more cash as punitive damages recovery.
Our client purchased a 2006 Dodge Charger from Defendants. Subsequently, she discovered that the subject vehicle had previously been used as a rental vehicle and as such, its value was substantially lower than perceived at the time of sale.
Our Client purchased a 2007 Mercedes-Benz S550 from Defendants. Subsequently, she discovered that the subject vehicle was previously used as a taxi and as such, its value was substantially lower than perceived at the time of sale.