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Phone: 804-282-7900
The Consumer Law Group, P.C.

Consumer Beware of Automobile Fraud As You Shop for a Vehicle

There are many opportunities for fraud and dirty dealing in buying a vehicle.

As you are shopping around, there are things that you should look for in the advertisement. There are many kinds of false advertising. One common misrepresentation includes price and availability of particular models. When clients complain that they were charged more than the advertised price, look for dealer’s stock or inventory number in the ad and on the contract. The dealer may claim that the particular vehicle advertised has already been sold, but you should check it out and make sure that is true.

Another type of false advertisement is in the Classified Advertisement. The ad may look like it has been placed by an individual owner-seller, but could actually be a dealer or dealer employee. In one case, the dealer first advertised the car under his name, then, when it did not sell, the next week the car was in the newspaper advertised it as being sold by a private owner. When a buyer called the "private owner," he identified himself and said his son-in-law was selling it for him at ABC dealership. After the purchase, on dealer paper, upon investigating the title history, the "private owner" was never in the chain of title. This is a form of bait & switch.

Bait & switch is another form of false advertisement. Consumers may be baited and switched on price, model year, new versus used, and the interest rate or other financing terms.

Dealers also use phony contests and "specials" as another form of false advertisement. This technique is especially common intent sales and other off-lot locations. The contest may involve a supposedly secret "winning" vehicle which the consumer may "win" by sitting in the right car or having a key that fits the ignition. Consumers are deceptively induced to submit credit applications disguised as contest registration, or may be fraudulently induced to buy a junky or more expensive vehicle on the pretense that they will win a second, better car for "only a dollar."

"Curbstoning" is the term dealers use for the practice of selling a vehicle in what appears to be an individual, on-the-street transaction. This is done usually because the car dealer does not want to sell the car on the dealer’s lot, often because it has been wrecked and rebuilt, has odometer or title problems, or other substantial defects. In other words, the car is in such bad condition that the unscrupulous dealer does not even want to sell it in his own name.

"Retail" Auctions are often promoted as selling vehicles which have been "seized" by government authorities. Vehicles sold at these auctions are typically very cheap junkers. Consumers must bid without an opportunity for a test drive or mechanical inspection. Most or all sales at these auctions are complete "As Is," which doesn’t leave the consumer with much legal recourse.

If the consumer wants to shop around on the internet, there are other opportunities for fraud and dirty dealing. Websites are often linked to dealerships which will use consumer’s personal information to solicit business. Also, dealer websites could overvalue a potential trade-in vehicle just to get the customer in the door.

The commonly used car value guides are available online, such as NADA, Edmunds, and Kelly’s. Remember "blue book" value is an average only -- but actual condition and the local market determines the true fair market value of a vehicle. Be aware of different values for retail, wholesale and average loan amount and know which one of these you are looking at.

These are several ways a dealer uses dirty dealing to get a consumer to buy a vehicle. Once the consumer is at the dealership, there are much more opportunities for fraud and dirty dealing in buying a vehicle.