Used Vehicle Fraud / Used Vehicle “Lemon” Law (Ohio Law)
Were You Sold A Used Lemon?
Many Ohio consumers are victims of automobile fraud and do not even know it. Purchasing an automobile is often one of the most expensive investments Americans make, second only to their home. Most Ohio consumers rely on their vehicle for access to employment and financial prosperity. A reliable vehicle is key to the way most Americans earn a living and conduct their daily lives.
The last thing a consumer should expect when paying good money for a used vehicle is to be lied to and cheated by the dealership. Auto fraud occurs when a dealership either fails to disclose the material information about the vehicle that you are buying, or alters or destroys information that shows the vehicle’s true mileage, condition or defects. The fraud may involve the vehicle history or misrepresentations or omissions in the sales or finance paperwork.
Beware of Arbitration Clauses in Your Paperwork
For more information on arbitration, click here.
Fraudulent Automobile Schemes Can Come in Many Forms
Odometer / Rollback Fraud: You have a right to a vehicle with an accurate odometer reading or a written disclosure if it is not. There are many vehicles sold with inaccurate odometers where no disclosure is made to the buyer.
Prior Accidents: You have a right to disclosure of prior material damage to a vehicle. For example, you must be told if a vehicle has been in a major accident, even if the damage has been “repaired.” If you ask about prior accidents, you have a right to a truthful response.
Buyer’s Guide / Used Vehicles: You have a right to review, sign and receive a copy of a “Buyer’s Guide” on all used cars. Federal law requires that the Buyer’s Guide must be posted on the vehicle at the time of sale.
Prior History / Rental Vehicles: You have a right to be told if the vehicle was once used as a rental vehicle.
Copies of Signed Documents and Credit Applications: You have a right to receive copies of all documents that you sign during a car deal, including your credit application.
Negative Equity / Upside-Down on Trade-In Vehicles: You have a right to receive proper disclosure of negative equity or upside-down financing in the paperwork under federal lending laws. This includes disclosure of negative equity in your trade-in, proper disclosure of deferred down payments and proper itemization of extras and add-ons that are part of the deal.
Undisclosed Add-Ons: You have a right to truthful price and payment quotes by dealership representatives. Often dealers will quote a higher monthly payment than the deal calls for and then add in high profit making extras while telling you they are “free” or provided to you at a discounted price when that is not true.
Forgery: You have a right to personally sign all documentation. Sometimes dealers will “forget” to have you sign a document, sign it themselves and turn it into the DMV or finance company, or attempt to use it against you later.
New and Used Vehicle Disclosures: You have a right to proper disclosure if the vehicle is a “lemon” buyback. This includes an accurate disclosure of the prior problems with the vehicle.
Demonstrators: You have a right to have a clear and conspicuous disclosure in the sales agreement indicating whether the vehicle is new or used. Examples of used vehicles are demonstrators, previously registered vehicles, and vehicles that have been sold to another buyer.
Dates on Agreement/ Paperwork: You have the right to documentation that is dated correctly. Some dealer schemes involve calling you back to the dealership to sign a second or even third contract because of a “problem with financing.” The second contract often has disadvantageous terms and is “backdated.”
If you believe you are a victim of auto fraud, contact JAMISON LAW to schedule a Case Review. Attorney Mandy A. Jamison will be able to explain to you what type of fraud you are dealing with and your legal rights.
Steps to Protect Yourself from Auto Fraud
Have the Vehicle Inspected by an Independent Mechanic. Knowing a mechanic can be a valuable asset when it comes time to purchase a car. Having a seasoned mechanic inspect the vehicle can reveal prior wreck damage or undisclosed defects. An experienced mechanic can also tell you the specific problems to watch out for when buying a particular brand or model of a car, and can also tell you which cars are relatively problem-free. Once you know the type of vehicle you want, twenty minutes talking to a friendly mechanic can help you determine the best manufacturer.
You may also take the vehicle to an authorized dealership for the make of the vehicle. Have them check their computer to see if they have record that the vehicle was ever wrecked or to let you know what the mileage was every time the vehicle was in an authorized dealer for repair or service.
Arrange for Financing through your Own Bank or Credit Union. Whenever possible, obtain financing approval from your bank or credit union before shopping for your car. Banks almost always offer a substantially lower rate than what a used car dealership will offer. If you have a prior lending history with your bank and are in good standing, you can usually receive up to 90 per cent financing. Car dealerships receive kickbacks when they set up financing for you, so they want you to borrow through them. By securing an auto loan through your bank for an amount you can afford before purchasing a car, you’ll find yourself in far more control when negotiating a final price, and know the truly lowest interest rate available to you. This can save you a lot of money over the life of the loan.
Research the Vehicle History. It can be helpful to obtain a vehicle history report from Carfax.com, Autocheck.com, or a similar such report. The small cost for this service can be money well spent if prior wreck damage or rental use is uncovered. You may also have your Insurance Company run your Vehicle Identification Number (VIN) on their computer (may be called a C.L.U.E. report) to see if an accident claim was ever made with an insurance company.
Ask for a Copy of the Warranty and Read it Carefully. Used car dealers are notorious for providing “dealer warranties” or extended service contracts. While the big print in these documents promises comprehensive coverage and prompt service for the vehicle they sell you, it is the small print that dealers refer to when something actually goes wrong with your car. Read the paperwork carefully, and contact an attorney knowledgeable in auto fraud if you have questions. Be sure to clarify exactly what is covered with the salesman. If your concerns are not explicitly answered in the warranty, ask for a signed, authorized amendment from the dealer with the correct wording that you are seeking.
Get Dealership Promises in Writing. For example, if the salesman tells you that the vehicle was inspected and is problem-free, be sure that promise is incorporated in the sales agreement, with language such as “THIS CAR HAS BEEN INSPECTED FOR COLLISION DAMAGE AND COLLISION REPAIRS AND HAS BEEN FOUND TO BE FREE OF COLLISION DAMAGE OR REPAIRS.” If these statements aren’t on the paperwork, insist that they be added, acknowledged and signed by an authorized representative of the dealership.
Test Drive the Vehicle. Drive the vehicle in multiple road conditions: city streets with heavy traffic, highways with open spaces, straight and curvy roads, and hills. Test the brakes, steering, features, air conditioning, and gauges. If possible, take the independent mechanic along for the ride. If the dealer refuses to let you take the vehicle for a test drive, or insists on going with you, this should be a big “red flag.” A reputable dealer will let you take the vehicle for a test drive in exchange for your driver license.
Take Your Time and Read What You Sign. Don’t let a car salesman rush you into a one-day, stop and shop sale. Avoid impulse buying. It is to the salesman’s benefit, and your detriment, if the sale is rushed. It is commonplace for dealers to keep you at the dealership for hours, only to rush you through a flurry of documents to sign. Sales and finance paperwork and other documents often contain clauses that can hurt you if you have problems with the vehicle down the road. For example, Attorney Mandy A. Jamison strongly discourages signing any paperwork containing an arbitration agreement or jury waiver. Otherwise, cross these clauses out and have an authorized dealership representative sign by the change.
If you still have questions, contact JAMISON LAW to schedule an appointment to review your paperwork before you sign.