Experienced Lemon Law Attorneys Protecting California Consumers from Auto Dealer Fraud
Auto dealer fraud occurs when a retail dealer misrepresents, conceals, or fails to disclose an important fact concerning the sale of a new or used automobile. You can press a claim even if the misrepresentation is not included in the written transaction documentation, if the dealer made inconsistent verbal representations to you.
A claim of auto dealer fraud is different from a claim under the California Lemon Law – an auto dealer fraud claim is based on the dealer’s wrongful conduct during the sale, while a Lemon Law claim is based on the condition of the car itself. It is possible, however, to have both an auto dealer fraud claim and a Lemon Law claim at the same time.
Buyer’s Rights Under California Law
Following is a list of some of the formal rights that you enjoy under California consumer fraud law. Although this list is not exhaustive, it does cover many of the claims of auto dealer fraud that commonly arise. In a transaction with a retail auto dealer, you have the right to:
- a copy of the Buyer’s Guide, which contains certain legally required information about the vehicle and the transaction;
- copies of all documents that you signed in the transaction;
- disclosure of accurate payment information – you cannot be forced to pay higher interest because of an “error” in arithmetic, for example;
- disclosure of any negative equity in the vehicle (negative equity occurs when the vehicle is being financed for more than its market value);
- disclosure of any previous buyback of the vehicle from a previous owner under the Lemon Law;
- disclosure of any prior use of the vehicle, especially use as a rental car;
- an accurate odometer reading or, if the odometer has been rolled back, disclosure of the vehicle’s actual mileage;
- disclosure of significant prior accidents involving the vehicle; and
- consolidation of all information about the transaction into a single contract.
Buying an automobile can be a complex undertaking involving a lot of paperwork. These aspects of the transaction are like the tip of the iceberg, however, compared to the complexity of the legal standards that govern the transaction. A dealer may use complexity and ambiguity to confuse you, so that he or she can take advantage of a superior understanding of the transaction. Although the number of tricks that a dealer might use against you is virtually limitless, some of the most common are listed below. These tricks are why it is important to fully understand the transaction and to know your rights as a consumer.
- Confusing the “money factor” and the interest rate: The applicable interest rate on a financed vehicle is the money factor times 2,400. This means, for example, that a money factor of .0027 adds up to an interest rate of 6.48 percent. A normally verbose dealer might observe a sudden “moment of silence” once he or she understands that you naively assume a money factor of .0027 means an interest rate of 2.7 percent.
- Contractual “errors”: Vehicle sales contracts contain lots of information, especially of the numerical variety. If you find an “error,” it is more likely to favor the dealer than to favor you, as you might imagine.
- The “certified” vehicle scam: The dealer represents that a used vehicle is “certified” under California law when in fact it is not.
- Fake window stickers: The “dealer sticker” price actually includes numerous options and fictitious charges, leading you to overestimate how much the vehicle is actually worth.
- “Yo-yo” financing: After the dealer leads you to believe that financing has been approved, you drive the car home, only to hear several days later that financing was rejected. Since the value of a new vehicle drops substantially the moment you drive it off the lot, you can be pressured into accepting alternative financing on the dealer’s terms (hint: you won’t like it). Meanwhile, your trade-in car has already been sold, or so the dealer assures you.
- Title laundering: Titles, like money, can be laundered. A vehicle that has been salvaged or totaled in one state can be titled in another state to conceal the vehicle’s troubled history.
- Payment packing: Quoting monthly payments that include add-ons and charges that you didn’t request and concealing them by extending the length of your repayment period.
Call Douglas D. Law, Esq. Today
A California lawyer can practice nearly any field of law immediately after being licensed, and most lawyers practice in a wide variety of fields. I took a different path and focused my practice around auto dealer fraud and the California Lemon Law. My 99 percent success rate and thousands of satisfied clients testify to the success of this approach. I operate on a “no win, no pay” basis – if I am unable to obtain a recovery for you, you will owe me nothing in attorney’s fees. All attorney’s fees and costs are paid for by the manufacturer or dealership. If you believe you may have an auto dealer fraud claim anywhere in California, call my office at (888)829-9033 or contact me online for a free case evaluation.