Auto dealer fraud comes in many different forms. Sometimes, those attempting to sell a vehicle intentionally omit certain information when communicating with the prospective buyer. Other times, they misrepresent the condition of the vehicle or mislead a customer about the true costs of the purchase.
When someone buys a vehicle through a dealership, they have certain types of legal protection. Purchasing directly from a vehicle’s prior owner comes with fewer overt legal protections, but some used car buyers view it as a cost-effective solution. There isn’t a dealership markup when someone tries to buy a used vehicle from the person who previously owned it. Unfortunately, not everyone selling used cars on the resale market is honest about their identity.
Licensed dealers may try to hide their background
Given that there are so many rules limiting the conduct of professional vehicle salespeople, sometimes salespeople have an incentive to complete a transaction as though they were a private seller. They may list the vehicle for sale on a website or put it at a park-and-sell lot and never tell the people who look at the vehicle that they are a licensed vehicle salesperson.
This practice, known as curbstoning, may lead to consumers overpaying for vehicles that have come through a dealership without receiving the protection that they would for a traditional dealership used car purchase. Often, the goal is to pass off vehicles in poor condition with minimal legal risk for the dealership that acquired the vehicle. For example, dealerships are required to conduct a safety inspection and to certify the results to buyers. Some dealers may try to pass off a purchase as a private sale in an attempt to avoid that responsibility.
Those who discover that they have purchased a used car from a dealer who didn’t disclose their identity may have grounds to take legal action based on claims of fraud. As such, learning more about the most common types of auto dealer fraud could help used car buyers make use of the legal rules in place for their protection.