Types Of Auto Dealer Fraud

Auto dealer fraud is a common type of fraud in the U.S.  Often, an auto dealer will misrepresent a car in order to sell more or they will use illegal coercive tactics to pressure buyers into purchasing cars.

By learning the various types of fraudulent techniques, you can avoid auto dealer fraud and the sometimes costly litigation that follows.

An auto dealer may lie or misrepresent the car’s status. This can include lying about or omitting information such as the car’s model year, performance abilities, or major issues.

Here are a few different scenarios that present auto dealer fraud during the sales process:

♦ An Auto dealer may not disclose known defects in used cars. Some auto dealers will go out of their way to misrepresent a car’s status. They “rollback” or alter the odometers to hide mileage or lie about how old the car is.

♦ Auto dealers may use false and deceptive pricing techniques in order to reel a customer in and then coerce them into buying the same product but for more money. Think of those advertisements you see in the newspapers claiming they’re running some type of discount promotion, but then when you get down to the dealership you learn that that price doesn’t cover everything it said it did or they say that the car advertised is “no longer available.”

♦ Maybe they tell you that a certain price is the standard book price when it’s not or they tell you that certain more expensive features are necessary when they are not. They may also tell you a car has certain features when in fact it does not.

♦ Auto dealers may also conceal the price of add-ons. You may have thought that you settled price during the “negotiation” process only to find out later, they omitted the price of add-ons such as warranties.

♦ Some auto dealers will omit the fact that a car was a “lemon”, meaning it was returned to the dealer previously after an owner saw that it was defective. Be aware that they may try to sell these cars as “new.” Additionally, dealers may not disclose the fact that a used car was damaged in a car accident or that it had flood, fire, or any other type of damage.

♦ Auto dealers can manipulate financing in order to squeeze more money out of you. You may have thought it was the end of the story when you drove the car off the lot and brought it home, but some dealers will call to say the financing fell through and that you have to agree to new unfavorable financing terms if you want to keep that car.

Oftentimes, if these types of fraudulent practices happened to you, most likely they happened to hundreds of people before you. In these situations, it may be beneficial to file class action lawsuits where multiple parties join into to sue another party. Class action lawsuits are a good way to lower the cost of legal fees.