Generally speaking, car salesmen don’t exactly have the cleanest reputation. Each year, consumers in the United States lose substantial sums of money to car buying scams. The auto industry is one of those fields where there are so many small details that taking advantage of the everyday buyer is not overly difficult.
Over the years, salesmen and dealerships have become very adept when it comes to car buying techniques, some of which are unethical, or just plain unlawful and fraudulent. Fortunately, many of these can be avoided with a bit of due diligence. Here are five of the most common ones to keep an eye out for when you are looking to purchase a new or used vehicle.
1. Odometer Tampering
Tampering with the odometer is one of the oldest car dealership scams in the book. According to the National Highway Traffic Safety Administration, odometer fraud costs American car buyers more than $1 billion every year! Even though this shady practice has become a bit harder as most vehicles today have digital displays, it still happens. Some scammers are able to reprogram the odometer with relatively inexpensive software. Or, they can use devices made legally for recalibrating faulty odometers.
In California, odometer fraud violates the Car Buyer’s Bill of Rights. If a dealership is exposed for this, they might be liable for punitive or compensatory damages under California’s Consumer Legal Remedies Act.
So how can you counter this scam?
Luckily, it’s pretty easy to avoid this one. Start by looking at the vehicle’s mileage listed on the maintenance records, then compare it to the CarFax Odometer Check. If there is a big difference, head for the door.
2. Claiming the Vehicle Was Sold “As Is”
The “as is” concept can be tricky. Essentially, when you buy a vehicle “as is,” it means you agreed to purchase the vehicle regardless of the condition and the seller is not responsible for issues once the deal has been made. The “as is” scam dealerships will sometimes try to pull is to quietly eliminate the Implied Warranty of Merchantability, which is a limited and basic warranty claiming that the vehicle will provide safe transportation. These warranties are automatically imposed on used vehicles sold with an express warranty.
In the case the vehicle is defective, the common tactic is that the salesman will claim it was sold “as is” and you have no rights. Sometimes, a car salesman will demand that you sign an “as is” agreement to trick you into believing this lie.
Fortunately, the law is on your side. Under California Lemon Law, the only way to legally eliminate the Implied Warranty of Merchantability is to clearly display an “as is” label on the vehicle while it is being showcased for sale. The label must state that:
- The vehicle is being sold “as is” or “with all faults.”
- The risk of quality and performance of the vehicle is with the buyer.
- If the vehicle is defective, the buyer takes full responsibility for any needed repairs.
No agreement or “fancy footwork” can sidestep these requirements. In bigger cities, this dealership service scam is very common and extremely dangerous. In most cases, salesmen try this when they know a used vehicle is defective. As a lemon law attorney in San Diego, I see this issue fairly often. If you bought a faulty used vehicle “as is,” yet there was no clear label, reach out to a lemon law lawyer right away.
3. Hidden Add-Ons in the Lease Agreement
Leasing a vehicle can certainly get confusing, especially if you haven’t done it before. This is another area that unscrupulous car dealerships tend to jump on. A very common tactic these dealerships employ when leasing cars is hiding add-on features within the fine print of the lease to drive the price up.
Most of the time, these are useless features like pinstriping, VIN etching, undercoating, cheap fabric protector, etc. In some cases, they will try to add in an extended warranty as a way to increase the monthly rate. Keep in mind, buying an extended warranty on a leased vehicle is absolutely ludicrous, as the manufacturer bumper-to-bumper warranty will typically cover everything throughout the duration of the lease. Be wary of these add-ons in the lease agreement, or you might end up paying more than you bargained for.
4. Charging the California Tire Fee for Used Vehicles
This is one of the most common car dealership secrets you’ll see in California. To give you a background, the California Tire Fee (which is listed in the California Public Resources Code Section 42885) requires that everyone who purchases a new vehicle must pay a fee for four new tires and a spare. Now, this fee is pretty small. It is $1.75 per tire, which comes out to $8.75 total. The law requires that the fee collected is then paid to the state.
Since the fee is so small, unethical dealerships may try to impose it on every single vehicle they sell, both new and used. Most buyers don’t think much of it and mindlessly agree to pay the fee. Keep in mind, this tire fee ONLY applies to new vehicles. If you are buying a used vehicle and they try to tell you the fee is required by the government, they are trying to scam you and pocket the money. For some used car dealerships, this small charge adds up to thousands – or even hundreds of thousands – of dollars based on how many vehicles they sell.
5. Selling Prior Rental Cars without Informing the Buyer
If a vehicle has been previously used as a rental car, it tends to have a lower resale value due to the common perception that the vehicle has been abused by renters and may need costly future repairs. As a result, the California Vehicle Code requires dealerships to disclose any prior rental registration to the customers before they purchase a vehicle.
In a perfect world, all car dealerships would follow this rule. However, many scammers will buy former rental cars at auctions for pennies on the dollar, then try to sell them at a higher price without disclosing the former rental status. This is easy money when dealing with young or inexperienced consumers. Fortunately, foiling this sketchy plot is very easy. Online resources like AutoCheck and CarFax sometimes do a good job of letting you know whether a vehicle was once registered as a rental. All you need to do is enter the VIN number and you should get the information you need.
If you bought a defective vehicle that you found out was a rental after the fact, a good lemon law lawyer should be able to help you in getting a claim.
The harsh reality of buying a vehicle is you always need to be on your guard. Negligence behind the scenes at car dealerships happens all the time and some unethical salesmen prey on inexperienced car buyers. If you don’t have the knowledge and critical eye for how to beat these car salesman, you could very well get burned.
If you are wondering what to do if scammed by a car dealership, feel free to contact us with questions. In the case that the vehicle is defective, you might be entitled to benefits under California Lemon Law.