Dealer Fraud

Are you a victim of Auto Dealer Fraud?

California auto dealer fraud involves deceptive practices that automobile dealers use during advertising, price negotiation, sales and the financing of a vehicle. Dealer fraud can occur at any stage of the vehicle purchase process.

Unfortunately, most consumers are not aware that they may be victims of auto dealer fraud until it’s too late. This is because they are simply unaware of their rights.

Hovanes Margarian is an experienced California auto dealer fraud attorney. Due to his in-depth knowledge and experience in the automotive industry for the past 25 years, Mr. Margarian knows exactly what is necessary for you to win your case.

It is important to seek legal help as soon as possible. Most case types require a consumer to take such action within a certain time limit. You do not want to wait as “statutes of limitations” may bar you from taking legal actions is you wait too long.

Types of Dealer Fraud

Here is a short list of common types of Dealer Fraud cases that we have handled in the past.

Non-disclosure of previous taxi, limo, and rental

Former taxicabs, limousines, rental vehicles, and publicly owned vehicles usually have very high mileage and a lot of wear-and-tear. So they may cost 10-60% less compared to similar vehicles not used for commercial purposes. It can also significantly reduce the resale value of the vehicle. If the dealer doesn’t disclose whether the vehicle was a previous rental or taxi, then they are conducting a fraud.

Non-disclosure of frame damage

Many used cars have pre-existing conditions, such as frame damage or body damage. In this case, the selling party must give the buyer a written disclosure notice of those conditions. If the vehicle has frame damage, it will usually cost 30-70% less than similar vehicles that have no frame damage. Note that frame damage can pose serious safety threats.

Non-disclosure of previous accident

The dealership must give a disclosure prior to selling a vehicle if it has been in an accident. In addition, the selling party must also provide a truthful response to questions and may not make any statements without definite knowledge of their validity.

Non-disclosure of a salvage title

In some cases, an accident may be so severe that the vehicle can get the title of “total loss.” A “total loss” is when the cost of a proper repair exceeds 70% of the vehicle’s market price. These vehicles should be repaired at licensed repair facilities. Also, they should be inspected for safety. If the vehicle passes the safety inspection, the seller must sell it with full disclosure of its salvage title status.

Non-disclosure of an accurate condition of vehicle

Some used cars often have pre-existing conditions that the seller is fully aware of. They must properly disclose these conditions to the buyer at the time of sale. Some pre-existing conditions may cause serious safety threats and financial losses. So, it is important for the consumer to know all the details prior to making the purchase.

Non-disclosure of a “lemon law” buy-back

If a manufacturer has previously repurchased a vehicle due to it being a lemon, then the dealer should disclose this fact to the customer.

Mileage fraud or odometer rollback

Odometer fraud is a common car dealer fraud practice. Car dealers that tamper with the odometer intend to conceal a used vehicle’s mileage, which in turn, can significantly reduce the value of the car.

Improper certification of used cars

When it comes to selling a used car, the certification is a major point. The value of a vehicle significantly increases if it is certified. An improper certification is a form of auto dealer fraud. This is when the dealer advertises the vehicle as certified but in fact, it is not.

Advertisement of special equipment or accessories

Sometimes the dealer advertises a vehicle as having special equipment or accessories included in the purchase price. There may be cases when the special equipment or accessories are not included. Or they are not operative.

”Bait and switch” & false advertising practices

This is a form of fake or unreliable advertising. The car dealer lures customers to the dealership by advertising a vehicle at a certain price. Then they tell the customer the vehicle is no longer available. This is an attempt to sell a different, more expensive vehicle.

Warranty fraud

Usually, the dealer sells a warranty with used vehicles at the time of purchase. The dealer must supply it to the purchaser and give disclosure of what it covers. Warranty fraud is when the dealer dishonors a contractual agreement. Or when a product is not as it should be.

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