A person chooses a used car mainly with the intention of saving on the hard earned money.
More often than not, thanks to the fraudulent used car sellers/dealers we seem to be shedding more dollars than the worth of a used car. One can always keep a check on the tricks of the used car dealers to get a square deal. Here I would like to caution you on the most common recipes the used car dealers employ to spruce up their income.
The used car dealer gives the trade-in less than its value
In a transaction that includes a trade-in vehicle more is owed on the trade-in vehicle than the actual cash value of the vehicle. But a customer is led to believe that the dealer is valuing the trade-in vehicle at the same amount as what is owed on the new used car.
The actual cash value the dealer offers for the trade-in is less than the amount owed on the new used car the buyer is interested in. The difference is added to the cash price of the new vehicle.
It is the unchecked illegal practices story spun around with the purpose of
- Inflating the cash price of the used car
- Cheating customer into paying more in sales tax and registration
- Hoodwinking the laws against selling a vehicle for the advertised price
Cheat sheet of the Inflated EMI’s
In this case, the customer is quoted an exorbitant monthly payment. Once the customer accepts the monthly scheme, the dealer adds the cost of the accessories like alarms, service contracts, GAP insurance, paint/fabric protection, window etching and low jack. in order to cook an inflated monthly installment amount. The customer does not realize that the accessories are optional and that they are paying extra for the accessories. They are even led to believe that the accessories are included with vehicle.
Acknowledgment of Rewritten Contract
If a customer does not qualify for financing on the terms of one contract he/she may have to increase the amount on a down payment, annual percentage rate of interest , etc. in order to qualify for a loan in which case the customer signs a second contract with the different terms with the date of the first contract. This in essence means that the customer is being charged interest for a time period in which the contract is not yet in effect. This backdated contract amounts to a material misrepresentation regarding the obligation of the new contract and violates the single document rule.
Acknowledgment of Rewritten Contract has the actual date when the contract was signed.
Should a customer be asked to sign a second contract, he/she can
- Cancel the contract
- Return the new vehicle
- Take back the down payment
- Trade in vehicle refunded
Remember that the dealer of the used car only has 10 days to tell you they want to make changes to the contract or the dealer of the used car can cancel the contract.After the 10 days, the dealership cannot change the deal.
Why is the purchase agreement so long in the used car industry?
Law provides that both party agreements should be within the same in the same document. This explains why the purchase agreements are so long in the used car industry.
Often, used car dealers have customers sign other documents, such as
- A Trade in forms for the difference between the trade in value and pay off of a trade in vehicle agreement plus any associated attorney fees.
- Payments on a trade-in vehicle that does not include the trade-in vehicle in the main purchase agreement
- A ‘hold check agreement’ in which the customer agrees to pay additional money towards the down payment on a later date
These documents violate the one document rule.
Hold check agreement Scam
Many customers are unable to pay the entire down payment at the time the purchase contract is signed. Dealers allow customers to make down payments as deferred down payments and should be itemized with its due dates. The used car dealers default on this code and have the customers write checks for the same deposit them only on the agreed upon date.
Besides, the customers are made to sign
- A hold check agreements that states what date the checks will be cashed
- Additional provisions regarding any returned checks
- Obligations that are not included in the single purchase agreement
Dealers cannot sell a used car for more than the advertised price
Law states that a used car dealer cannot sell a used car for more than the advertised price or the window stickers and media ads.
The amount of taxes, license, registration fees and the financier’s charges proportionately increase should the used car dealer inflate the cash price of the used car higher than the advertised price
Ask for a translation of the contract into your mother tongue
Civil Code §1632 states that if a purchase deal is negotiated in the mother tongue of the buyer, a translation of the contract must be provided to the customer in the same language before signing the English language contract. A customer has the right to cancel the contract if this is not complied with.
Dealers of the used cars should disclose facts about a used vehicle
Dealers are required to disclose facts about a used vehicle regarding its
- Previous accidents that affect its safe usability and market value
- Its occupational history
- Lemon law buy back by the manufacturer/dealer
- Odometer tampering
- Vehicle’s history of the accidents accident/a trade vehicle/rental
Which used car is New and which used car is Used?
Law requires that a dealership to specify the following cars as ‘used’.
- A demo/demonstrator vehicle
- Vehicles sold but returned due to the nonpayment of the EMI’s
The used car dealers describe these cars as New
A used car that passes certain standards alone should be labeled “Certified Used”
Generally, a used car that passes certain standards is labeled “certified used” and is supposed to guarantee to the customer that the used vehicle is in good working order and free from major structural damage. However, many a used car that does not qualify as “certified” under the standards advertised are being listed ‘certified’ this is the worst fraud a used car dealer is capable of.
If you suspect that you have been the victim of used car fraud contact our law firm for more information on the fraud claims such as odometer rollbacks, auto dealer financing scams and vehicle history misrepresentations.
If you or any of your loved ones are hurt because of the fraud used car dealers contact us toll-free at 1-800-875-3666 for the redressal. Our attorneys might get you a refund on the vehicle and may even let you retain the used car.