Know the differences between Lemon Law and Auto Fraud and Avoid Getting Duped

Did you recently purchase a vehicle and found it to be defective? Does the defect compromise the vehicle’s functionality and put you at risk? Did you purchase a car and end up coughing up more than its actual cost?

Well, chances are, you might be a victim of auto fraud or a lemon vehicle. However, knowing for sure can be a bit difficult to find out. Although there are several differences between the two, they can often time overlap.

Let’s take a closer look at these two terms to get a better perspective:

Lemon Vehicle and Lemon Law in California

Lemon law applies to both new and used cars. It differs from state to state. California’s lemon law offers compensation for car owners whose vehicles do not perform appropriately after purchasing. It covers most types of vehicles including motorcycles.

Here are the conditions that qualify your vehicle as a lemon:

  • The vehicle (new or used) has manufacturing defects that can adversely affect the value, safety, or the use of the vehicle.
  • The vehicle is covered by a warranty provided by the manufacturer, dealer, or distributor.
  • The warrantor, through its authorized repair facility, was given a reasonable number of opportunities to repair, typically 3, 4 or 5 visits.

Typical defects covered under the state’s lemon law include:

  • Power steering loss or other steering defects
  • Premature brake/rotor wear
  • Seat belt failure
  • Defective seat belts
  • Electrical problems
  • Engine computer malfunctions
  • Cruise control malfunctions
  • Airbag defects
  • Air conditioner mold
  • Paint defects
  • Anti-lock braking system failure
  • Automatic transmission failures
  • Body problems
  • Brake pedal failure
  • Fuel injection system leaks
  • Steering pull
  • Stalling
  • Sudden acceleration and surge
  • Uncontrolled acceleration
  • Fuel line defects that can cause fires
  • Engine fire and failure

Auto dealer fraud

Auto dealer fraud involves deceitful practices by automobile dealers. This can include deceptive practices during the advertising of the vehicle, price negotiation, or the sales and financing of the vehicle. Fraud can take place at any stage during the vehicle purchase process.

Some of the common types of auto dealer fraud include (but are not limited to) the following:

Non-Disclosure of Previous Taxi, Limo, and Rental – If a vehicle was used as a taxicab, limousine, rental vehicle, or a publicly owned vehicle, they are bound to have traveled long distances and include damages. This significantly reduces the vehicles’ resale value. By concealing the previous usage of the vehicle, dealers are committing fraud.

Non-Disclosure of Frame Damage – Frame damages in a vehicle can seriously deteriorate the car’s ability to provide ample security during an accident. This is because the car’s frame is the foundation and is considered to be an essential safety feature. Vehicles with frame damage can, therefore, be a potential threat to the users’ safety. These damages need to be briefed to the buyer in a written disclosure.

Non-Disclosure of Previous Accident – If a vehicle has been involved in a prior accident, the selling party should be disclosing the nature and extent of the damage to the buying party.

Non-Disclosure of a Salvage Title – Occurs when the dealer doesn’t sell a vehicle with the complete disclosure of the salvage title status.

Non-Disclosure of an Accurate Condition of Vehicle – As the term indicates, this refers to committing fraud by selling a car and not giving the buyer accurate details of the condition at the time of purchase.

Non-disclosure of a “Lemon Law” Buyback – There can be occasions when a manufacturer repurchased a lemon vehicle. In such case, the dealer needs to notify this to the buyer.

Mileage fraud or Odometer Rollback – Another common auto fraud practice is tampering with the odometer and not revealing the vehicle’s true mileage.

“Bait and Switch” Advertising Practices – Bait and Switch is a fraudulent practice, wherein dealers lure buyers by advertising a vehicle at an incredible price. When the buyers want to purchase the vehicle, the dealers tell them that the vehicle is no longer available and compel them to buy another, more expensive vehicle.

Warranty Fraud – This occurs when the dealer claims that the warranty offers certain protection whereas it doesn’t. Also, it can include falsely representing an extended service contract with the extended warranty.

To sum it up, here’s a table comparison of Lemon Law and Auto Fraud differences:

Auto Fraud Lemon Law
Typically involves used vehicles, but can include new motor vehicles Includes both new and used vehicles, sold with a warranty
The claim is usually against the auto dealer The claim is usually focussed on the manufacturer
Covers problems or defects that stem from the dealer lying and concealing information Covers problems or defects during ownership
Covers any vehicle irrespective of warranty Vehicles covered by a warranty
Intentional fraud Defects in materials and workmanship

Stay Away From Fraud

Buyers aren’t usually aware of auto dealer frauds or lemon vehicles until later. Even when they are, many don’t know the proper steps to take.

Don’t let this happen to you. Get in touch with an attorney or a California lemon law attorney (if your vehicle is a lemon) and start the process of filing the claim.

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