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What You Need to Know About Auto Dealer Fraud

One of the most common types of consumer fraud is auto dealer fraud. Auto dealer fraud occurs when a car dealer misrepresents, conceals, or fails to disclose an important fact concerning the sale of a new or used vehicle. Though car dealer fraud is a widespread problem in the United States, consumers do have rights against fraudulent dealers.

In this article, you will learn about the most common tricks car dealers use (plus, what to do if you think you have been a victim of auto dealer fraud). 

The Most Common Types of Car Dealer Fraud

“Bait and Switch”: This is an advertising tactic in which the dealer advertises a car at a great price, but when you show up at the dealership, they say the vehicle is no longer available. Then they try to sell a more expensive vehicle (or the advertised vehicle at a price higher than the advertised price).

Mileage Rollback – Also Known as “Odometer Rollback”: This is an illegal practice in which used car dealers roll back odometers to conceal a vehicle’s actual mileage.

Failing to Disclose Past Damage: Fraudulent dealers sometimes try to sell vehicles without disclosing that a vehicle has been salvaged after an accident or damaged in a flood.

Representing a Used Vehicle as “New”: Another serious type of dealer fraud is when a car dealership lies and says the car is new when it is used (and was actually returned to the dealer because of a defect).

“Yo-yo” Financing: The dealer assures the consumer the deal is final but several weeks later contacts the buyer telling that the financing was rejected. The buyer will then be forced to pay a higher interest rate in order to keep the car. 

As you can see, most types of auto dealer fraud can be characterized as either non-disclosures or affirmative misrepresentations. The first occurs when a dealer withholds information that affects the value or desirability of the vehicle, while in case of an affirmative misrepresentation a car dealership adds or changes information to make the vehicle more appealing.

Your First Step – Contact a Dealer Fraud Attorney!

If you have any suspicion that the dealer committed fraud, don’t wait — contact an auto dealer fraud lawyer for a consultation. Attorneys at the Margarian Law Firm will determine if you can sue a car dealership, as well as help you get out of contracts, replace, repurchase, or even return your vehicle to get your money back. Call us at (818) 553-1000 for a FREE consultation!

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