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A surprising number of new and used car sales involve auto dealer fraud, deception and unfair business practice. Consumer fraud by an auto dealer is common for several reasons.
For one thing, American car expenditures amount to hundreds of billions of dollars a year. Furthermore, car sales are complicated transactions. They involve state titling and registration laws, trade-ins, financing, leasing, physical damage and liability insurance, credit insurance, options, and other fees. Car dealers take advantage of the complexity of car sales when dealing with consumers, resulting in fraudulent transactions. Car salesmen are trained to earn the trust of the consumer. Consumers are basically trusting and no one want to think that a grown man will lie to their face.
Think you might be a victim of auto fraud in Georgia? Call our office at 770-832-0300 for a free case evaluation.
According to the National Consumer Law Center, auto dealer profits on sales of new cars are small. Dealers make more money on the financing, insurance, service contracts and repairs, and on the sale of used cars. This results in a huge financial incentive to “push the envelope” and increase dealer profits.
Dealer employees, especially Finance and Insurance (F&I) staff and Management are driven by commission. The higher the profit from an automobile sale, the more they make. The more cars sold, the higher the commissions.
Finally, and perhaps most importantly, there is a culture at many auto dealers that stealing from the consumer is okay. The rules of the game are “buyer beware.”
Common Types of Auto Dealer Fraud
- Used Car Fraud: The Real Story Behind Carfax
- Auto Warranty Fraud: The Window Sticker
- Odometer Fraud
- Auto Fraud Involving Wrecked & Salvaged Autos
- Bait and Switch Fraud
- Yo-Yo Car Sales
- Lemon Laundering
- Auto Loan Fraud: Falsifying Credit Information
Other Deceptive Car Sales Techniques
Used cars often have documented histories of mechanical problems or other history that would be important to a car buyer. “Lemon laundering” is the resale of a car that was repurchased by a manufacturer or dealership from a consumer under one of the modern lemon laws. We are even seeing claims of lemon cars being sold as certified pre-owned vehicles.
Another typical dealer sales pitch is that a used car has only had one previous owner who took excellent care of the car. In reality, that car has had more than one owner or was a rental car.
For wrecked, salvaged, flooded and misrepresented cars, the dealers do not inform the salesperson about the cars they are selling. Salespeople will cross the line between what may be permissible “puffing” by a retailer and what is considered auto fraud. Puffing is “a statement purporting to be merely the seller’s opinion or commendation” of the car. Auto fraud would be making a representation about a quality of a car in response to a direct question.
Fortunately, the law will protect a consumer from a dealer who knows about the history of the car even if the dealership’s salesperson did not know the history.
A dictionary of car dealership terminology has been created by Ohio consumer lawyer, Ron Burdge.
If you think you may have been defrauded by an auto dealer in Georgia, you need an attorney with experience going up against car dealers. Contact our office today at 770-832-0300 for a free case evaluation.