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Auto Dealer Fraud in California
Auto manufacturers have a responsibility to provide consumers with safe products that function properly and do not fail after normal usage. However, not all consumers are fortunate enough to experience such expected satisfaction, particularly when it comes to car sales. According to the Office of the Attorney General, consumers have "various rights under both state and federal law if [a] vehicle does not perform as provided under an express warranty." Put bluntly, car manufacturers are not permitted to sell vehicles that do not function properly.
Similarly, auto dealers also have a responsibility to ensure that the products they sell are not only safe to use, but are also accurately presented to their customers prior to being purchased. Deviation away from this type of business practice is simply known as auto dealer fraud, and an unfortunately large number of consumers are affected by it each year.
Car dealers almost always have the upper hand in most negotiations. The average consumer looking to purchase a new or used vehicle may know about vehicle specifications, how to maintain the vehicle, and even how to repair the vehicle, but when it comes to sales practices, consumers know little of the fraudulent tactics employed by dealers, and how those tactics take a negative toll on potential car buyers.
The following are some of the more common examples of auto dealer fraud:
- Bait and Switch: This happens when dealers knowingly market certain vehicles to consumers knowing full well that those vehicles are no longer available. Thus, consumers are lured to car lots with false hope in acquiring the advertised vehicle, and then talked into considering a completely different type of vehicle.
- Hidden fees and other price inflations: Car dealers pay a certain amount of money for each vehicle, and then charge customers based on that price. Obviously, this invoice price and the eventual sticker price need to differ in order for the car dealer to make money, however some dishonest dealers may attempt to increase the invoice price in order to justify a larger discrepancy between it and the customer sticker price. While one would assume that the sticker price is a good determinate of the price one is going to pay for a car, the sticker price may not include fees relating to extended warranties, vehicle maintenance programs, and other costs that are worked into the final agreement, but not necessarily made known to the consumer until it's time to sign on the dotted line.
- Vehicle Sticker Prices: These prices can be inflated with unnecessary fees and other hidden costs (such as extended warranties and maintenance charges) often referred to as add-on concealment.
- Odometer Fraud: This happens when dealers roll back odometer numbers in a deceptive attempt to represent a vehicle as having less mileage and wear and tear than it actually has.
- Representing a Used Vehicle as a New Car: In some cases, auto dealers may attempt to pass off used or recently returned vehicles as brand new, when in fact they have been, at least somewhat, previously driven
- Under Valuing a Trade-In Vehicle: Some dealers don't seem to really incorporate the value of a trade-in when figuring out the final terms of a contract. If a customer trade-in vehicle is involved, dealers may attempt to offer as little money as possible for it, thus representing an undervaluing of the trade-in vehicle. More specifically, the final price may be slightly inflated with hidden fees and other unnecessary costs because the dealer knows that the value of a trade-in vehicle (which they are able to fluctuate) can be used to help cover up dishonest price mark-ups.
While it may seem daunting to even accuse an auto dealer of fraud, it is essential that consumers realize that they have rights. In California, the Consumer Legal Remedies Act protects consumers from deceptive business practices on the part of auto dealers. For more information about your rights, please don't hesitate to contact The Law Offices of Howard D. Silver. California lemon law attorney Howard Silver will hold accountable car dealers accountable for their unscrupulous business practices. Call us today at 1-866-49-LEMON, or fill out our confidential online consultation form, for a free evaluation of your California auto dealer fraud case.