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We handle cases across the United States. Allen Stewart is licensed to practice law in Texas, California, New York, Pennsylvania, Missouri, North Carolina, Ohio and Arizona.

Know the common types of dealer fraud

Know the common types of dealer fraud
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Vehicle shopping can be tiring and confusing. It can be a challenge to find the right mix of what fits your budget and what you hope to drive. With this complex challenge ahead of you, it pays to do your research beforehand.

It helps to look into the vehicles you are considering, in order to find any years that have specific defects or concerns. Look into potential weaknesses in the vehicle and be ready to have an experienced mechanic look over any potential purchase. It is also a good idea to consider getting accident reports and history on any vehicle you are weighing the purchase of. Knowing the history of the specific vehicle, as well as potential things that can go wrong with that specific make of vehicle, can better prepare you for future investments to keep your daily driver functioning and on the road.

As part of that research, it is a good idea to see what potential fraud can be involved in a vehicle purchase. Car dealers have been known to commit fraud while selling vehicles, a situation that makes things expensive for the auto buyer down the road.

Below are a few examples of fraud methods car dealers employ to get a vehicle off the lot and into the hands of an unsuspecting auto buyer.

For more information on arbitration and other frequently asked car dealer fraud questions, click here.

“Bait and switch” is a classic tactic involves literature such as a flyer or an online ad on social media (or elsewhere) advertising a specific vehicle with low miles, appealing features and a reasonable price. This ad seems too good to be true, and generally it is. When auto buyers get excited and visit the dealership to get more information, that vehicle is “no longer available.” However, the salesmen attempt to show off a more expensive, perhaps less appealing vehicle and convince the buyer that they really wanted that vehicle the entire time.

Hence, bait … and switch.

Odometer rollback occurs when an auto buyer looks at a vehicle and sees a- signs that the vehicle has more wear and tear than the mileage displayed on the odometer would indicate or b – physical evidence in the dashboard that the odometer has been tampered with. This may include either marks around the display or, in older models, numbers that aren’t flush where they are supposed to be.

Like an odometer rollback, a car dealer can be aware a vehicle has been damaged significantly in an accident and still present the vehicle to a buyer as nearly new condition. They tend to avoid discussion of accidents or otherwise find a way to convince the buyer the vehicle is in good shape when, in fact, they know it is not.

If you think you have been a victim of odometer fraud, contact Allen Stewart. The consultation is free.

These are the situations where a vehicle should be checked over by a reliable mechanic known to the auto buyer and not affiliated with the dealership. The dealer may follow through with the falsehoods to the point where they bring in a mechanic that works at the dealership to help convince the buyer the vehicle is in good shape. A mechanic who is not affiliated with the dealership will be more likely to be honest about the condition of the vehicle and any potential to cost the buyer money in the near future. This also can be a good way to avoid buying a lemon, which is discussed in detail below.

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Padding the price occurs when the auto buyer is attempting to gain financing for a vehicle they want to own. The dealer may convince the buyer they don’t qualify for lower payments or a better APR. Likewise, they may work to convince the buyer they need additional insurance or other add-ons that mean a higher price tag and therefore more money for the salesman and dealership.

Different states have different regulations in regard to lemon vehicles. Sadly, more than 200,000 vehicles a year fall into the lemon category. For those who buy a lemon and are afraid they will be stuck with not only payments but no viable transportation, consider the following criteria and see if your vehicle is a lemon under the Texas Lemon Law.

The Texas Lemon Law covers cars, trucks, SUVs, RVs and electric vehicles that are within the first 24,000 miles driven or first 24 months of ownership and are covered by original warranties from the dealer or manufacturer. These vehicles must show a defect that means the driver and passengers are at risk of harm when driving the vehicle. Also, the vehicle must have a defect that, despite four or more visits to the service department (this number is specific in the Texas Lemon Law), remains unresolved.

Think you have a lemon,click here to fill out a 30 second form

A vehicle that sits idle for 30 or more days (again, during the first 24 months since purchase or the first 24,000 miles) and there is no loaner vehicle provided to the vehicle owner would fit the criteria of a lemon. If the vehicle fits these criteria, the next step is to file a complaint with the Texas Department of Motor Vehicles, which oversees the complaints related to the Texas Lemon Law. A complaint can be filed online (with payment of a fee). Once that complaint is filed, it is assigned to someone who works in that department. From there, a mediation is scheduled. If both sides can’t find a resolution during mediation, then a hearing is scheduled. An examiner is assigned, and both parties are given a chance to share their stories at the hearing. The examiner then has 60 days to provide a written decision. If either party has an issue with that decision, an appeal can be filed.

Lemon laws are confusing. Read our guide to the lemon law process.

In the event the examiner finds in favor of the auto owner, then the options are repurchase, replacement or repair. The manufacturer is required to finance the repair to a satisfactory conclusion. They also may be required to reimburse the auto owner for previous repair attempts. In the event of reimbursement, the number of payments made and the value of the vehicle with the current miles driven are considered. Likewise, for the replacement, a vehicle of value comparable to that of the defective vehicle (with miles driven and payments made taken into consideration) is provided to the vehicle owner. However, any aftermarket additions are not considered in either case. Regardless of the value of the additions, that money spent is moot when the replacement or reimbursement is in consideration.

A lemon law lawyer is a good resource when these situations arise. They understand what the mediator and later the examiner might be looking for, they know what potential issues can arise when documentation is not available and they have an idea of how to steer your case toward success as soon as it begins. Choose a lemon law lawyer with a history of success in lemon law cases, and they and their staff can help resolve your issues in a timely manner.

Vehicle shopping is a challenge for those who aren’t informed and aren’t aware of particular methods of fraud that car dealers can engage in. Finding a way to prepare yourself before starting the process is a good way to avoid these situations. This is good for your stress levels and your wallet.

This information brought to you by Allen Stewart P.C.

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