The Most Common Types of Auto Dealer Fraud

Purchasing a vehicle can be fun and exciting experience for everyone. Unfortunately, sometimes that experience can turn into a nightmare, if it turns out that the car dealer acted in a fraudulent manner. Auto dealer fraud describes deceptive and unlawful practices used by automobile dealers. This type of fraud can occur at any stage of the vehicle purchase process, from advertising to negotiation of vehicle pricing and financing terms.

The good news is that you don’t have to face this nerve-wracking time alone! If you think you might have been the victim of auto dealer fraud, contact an auto dealer fraud lawyer to discuss your legal options. An auto dealer fraud attorney will evaluate all aspects of your case, explain all options available to you, and will work with you to ensure the best possible outcome for your case.

The Margarian Law Firm specializes in representing clients who have been victims of auto dealer fraud, providing expert legal counsel and dedicated advocacy. Attorneys at the Margarian Law Firm will review the details of your case, explain your legal options, and help you get out of contracts, replace, repurchase, or even return your vehicle to get your money back.


The Most Prevalent Types of Auto Dealer Fraud to Watch Out for

  • The bait-and-switch tactic involves advertising a specific vehicle at an attractive price to lure customers into the dealership, but when the potential customer shows up at the dealership, they say that the advertised car is no longer available. The dealer then tries to sell a more expensive vehicle (or the advertised vehicle at a price higher than the initial price).
  • One of the oldest and most common forms of auto dealer fraud is odometer rollback. This is an illegal practice in which used car dealers roll back odometers to display a number that is lower than the vehicle’s actual mileage. By rolling back the odometer, dishonest dealers can deceive buyers into paying more than the vehicle is worth.
  • Another common type of auto dealer fraud is misrepresenting the vehicle’s history. This may involve failing to disclose past accidents, flood damage, salvage titles, or other issues that could affect the vehicle’s safety or value.
  • Yo-yo financing occurs when a dealer assures the consumer the deal is final but several weeks later contacts the buyer telling that the financing was rejected and that they must either return the car or accept less favorable terms, such as a higher interest rate or larger down payment.
  • Another serious type of dealer fraud is when a car dealer lies and says the car is new when it is used (and was actually returned to the dealer because of a defect).
  • Some auto dealerships engage in deceptive pricing practices by adding hidden fees and charges to the final purchase price. These fees may include documentation fees, administrative fees, or inflated charges for optional add-ons and accessories.
  • A dealer may offer a promising warranty and/or extended service contract to make a deal more attractive. In other words, the dealer may claim that a warranty offers protections that it does not offer, or falsely represent an extended service contract as an extended warranty.


Wrapping Things Up…

Today auto dealer fraud is one of the most common types of consumer fraud. 

As you can see, auto dealer fraud takes many forms and can result in significant financial losses and emotional distress for consumers. Most common types of auto dealer fraud can be characterized as either non-disclosures, or affirmative misrepresentations. The first occurs when a dealer conceals information that affects the value or desirability of the vehicle, while in case of affirmative misrepresentation a car dealership adds or changes information to make the vehicle more appealing.

If you have recently purchased a vehicle and you suspect that you have been a victim of any of the fraudulent dealership practices mentioned above, don’t hesitate to contact an auto dealer fraud attorney right away. Call the Margarian Law Firm at (818) 553-1000 today. The consultation is FREE!

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