The used car salesman stereotype is well known…and in some cases, well deserved. There are a number of ways that you can be defrauded when buying a used car, but one of the most common is when a seller misrepresents the history of the vehicle. Here are some common scams…
Title washing is a practice by auto dealers and individuals to hide the history of a vehicle that's been salvaged. Salvage titles apply to cars that insurance companies named a “total loss” or unsalvageable. Laws regarding the requirements for titling a vehicle vary widely from state to state. Some states are very stringent about documenting a vehicle’s history, while other states are quite lenient.
As an example, say a car was a total loss due to flood damage. The insurance company pays the owner, and then puts the car up for auction in a state that requires that the total loss is disclosed on the vehicle’s title. The company that buys the auctioned vehicle gets it at a very low cost, and then takes it to a more lenient state and gets a clean title. The next thing you know, the car is sitting on the lot up for sale to an unsuspecting buyer who purchases it believing that it will run like a charm – when it will likely not run properly and perhaps even be a danger to the new owner and his or her passengers.
Another common form of auto fraud relates to lemon buybacks. Under state lemon laws, auto manufacturers must repurchase defective vehicles. As with title washing, some states require that buybacks be recorded on the vehicle’s title, while other states do not. Sometimes, manufacturers will buy back a lemon outside the lemon law process, thereby avoiding the “lemon” label. Other times, the buybacks are put up for auction, and then transported to a state that will give them a clean title. The result is another unsuspecting purchaser of a lemon car.
When a car has been declared a total loss, there’s an ethical obligation (and often a legal obligation) to disclose this fact to potential buyers. However, sometimes a repaired wrecked vehicle gets its title scrubbed in a lenient state, and it is misrepresented to potential buyers. There have also been instances when insurance companies go so far as to engage auto body shops to weld together two “good” halves of two wrecked cars of the same make and model in order to create a whole car – which in turn is sold to an unsuspecting consumer.
If you’ve been the victim of a used car scam, you have recourse under a variety of state and federal laws. In order to get the compensation you deserve, you should consult with an attorney who is experienced in auto fraud legal actions. Attorneys at Lemberg & Associates are outraged that unsuspecting consumers are exposed to danger because of unscrupulous practices by insurance companies and used auto dealers. If you or a family member has been injured because of used car fraud, or if you’ve purchased a used car that you suspect is based on fraudulent information, our attorneys will work with you to seek justice. Complete the form to the right for a free case evaluation.