You bought a brand new car with that new car smell and can't wait to drive around town and show it off a bit (or a lot!)
Somewhere along that drive a friend says, "Hey, did you notice THIS?"
"WHAT?!" you say.
And there IT is - a funny patch of paint, a dull spot, a dimple. And your brand new car bubble deflates. How can this be? This is supposed to be a brand new car!
A new car may be damaged during transport or on the dealer’s lot prior to sale. If the damage is minor, a dealer is not required to inform you. But a car dealer is required to disclose pre-existing damage prior to selling the car in the following circumstances.
(1) Damage to the frame or drive train.
(2) Damage to the suspension requiring repairs other than wheel balancing or alignment.
(3) Damage that occurs in connection with a theft of the vehicle.
(4) Damage requiring repairs, including parts and labor, that exceeds the greater of 3% of the manufacturer’s suggested retail price or $500.
For example, $1,500 is 3% of a vehicle with an MSRP of $50,000. Thus, if the repair cost exceeds $1,500 the dealer is required to disclose the damage to you prior to signing the purchase contract.
Well, don't you think the dealer is going to fix it himself and under charge for that repair to keep it under the 3%? Hmmmm......
Sorry folks. The calculation is based on the dealer's reported cost to repair. If it is obviously a much greater repair, then you may need to have the car inspected to determine what is a realistic repair cost and take the dealer to task. If the dealer refuses to buy it back, you might want to contact an auto sales fraud attorney. (Hmmm.... now where would you find one of those?)
The Song-Beverly Consumer Warranty Act is commonly known as the Lemon Law, but actually provides much broader consumer protections than just for vehicles. It covers all manner of new consumer goods that are used, bought, or leased primarily for personal, family, or household purposes. Consumer goods include furniture, household appliances, home electronic products, assistive devices for individuals with disabilities, and 5th wheels, among others.
This Warranty Act also sets forth requirements for notification to consumers about both express and implied warranties to ensure those warranties and any disclaimers are more readily understood. If you experience product defects, you must notify the manufacturer before the warranty expires (preferably in writing), so keep an eye on your warranty expirations! Put them in your e-calendar, register them, set a reminder for three months prior to the expiration. Manufacturers are betting on you forgetting or not thinking it's worth the hassle. Be the hassle!
There's this thing that shady car dealer's like to do - it's called the Yo-Yo scam. A dealer sells you a car but then calls you back for one reason or another and asks for more money or to sign a new contract or to return the car. At this point, you have become attached to the car and feel like you have no other choice but to do what the dealer wants.
The dealer never cut the string between you. He releases you from his lot only to snap you right back before you get too far away. Yo-Yo.
Just yesterday I met with a nice couple who bought a used car and the dealer told them they were financed, but they weren't. After two weeks, the dealer called and said he needed another $1,500 to get them financed. They asked the dealer to take the car back, but surprise, the dealer said he couldn't. (This is a big fat lie.)
After two months without financing, the dealer finally asked for the car back, but said they would have to get their down payment from the lender. What??? There is no lender! (Another big fat lie.)
The whole point of this yo-yo scam was to take the buyer's down payment and as much money after that as possible, and then take the car back and keep their money. I've seen dealer's run this scam with the same car over and over again, stealing money from hard working people without a thought as to the hardship they are causing.
The best way to avoid this type of scam is to know your rights.
1. If the dealer calls you after the sale and wants something more, you have the right to say no.
2. If the dealer wants you to sign a new contract, you have the right to say no.
3. If the dealer withholds your car registration or title until you pay more money, you have the right to say no.
4. If the dealer can't get you financing and takes the car back, he is required to give you all of your money back.
If you are a victim of a yo-yo scam, I encourage you to report the dealer to your local DMV Investigations Unit. They will investigate the dealer and have the authority to put them out of business if they repeatedly violate the law. They can encourage the dealer to pay you back. If the dealer doesn't, then contact an auto sales fraud or lemon law attorney for help.