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What is a car dealer fraud case?

I often have colleagues who see that I am a Philadelphia Car Dealer Fraud Lawyer ask:

  • How do you sue a car dealership?

  • What do car dealer fraud cases entail?

  • What are the requirements for a car dealer fraud case?

  • What is the difference between a lemon law and a car dealer fraud case?

The cases that are most often reported are cases involving a car dealership selling defective automobiles. Philadelphia car dealerships, and those throughout Pennsylvania, New Jersey, New York, and Delaware, will often purchase damaged vehicles at auction. The dealership will then fix the damage, and sell the vehicles claiming there is no accident history. Other times, the car dealership will fix a damaged vehicle, then certify the vehicle through the car manufacturer. This certification is an attempt to further assure to the customer that the vehicle has not been damaged.

The difference between fraud and lemon law cases comes down to the age of the vehicle. A new vehicle (less than one-year since purchase) could qualify as a lemon if found to be defective after purchase, and this type of case will take advantage of the lemon law statute in the state where the vehicle was sold. A car dealer fraud case usually involves the consumer protections laws of the state, and will normally involve a vehicle more than one-year old.

Car Dealership Fraud Case Example:

Let’s use a Lexus as an example. A Philadelphia car dealer purchases a used Lexus from a wholesale auto auction. The Lexus has been in a front-end collision accident and has frame damage. The dealership then attempts to fix the damage, puts on a new coat of paint and new fenders, and then certifies the vehicle through the Lexus Certified Pre-Owned Program. The dealership then sells this vehicle as a Certified Pre-Owned Lexus for $40,000.

FRAUD #1: Now, right here we already have the dealership engaged in a fraudulent activity. Pre-Owned programs have specific criteria that preclude frame-damaged vehicles from being admitted. The dealership knows that the vehicle was in an accident which caused frame damage, and also knows that the certified pre-owned Program would deny the car from the program if the frame damage was made known to the manufacturer. So the dealership hides this fact, and passes the vehicle off as a qualified car.

FRAUD #2: Next, the dealership commits a second act of fraud when it tells the car buyer that the car was never in an accident.

FRAUD #3: Third, the dealership commits a further act of fraud by claiming that the car qualifies as a certified pre-owned vehicle to the consumer. Dealerships use certified pre-owned monikers to induce customers into buying their vehicle. In the example above, the dealership did so knowing that the vehicle did not qualify for the program, and the dealership therefore committed fraud.

FRAUD #4: The dealership commits a fourth act of fraud by selling the vehicle for $40,000 knowing that the defect/damage would bring the value of the vehicle down to $30,000. The dealership knowingly sold a defective vehicle for price that it did not qualify for, and used the fraudulent statements about the vehicle’s accident history and certification to boost the sale price. This is fraud.

Michael F. Niznik is a Philadelphia Car Dealer Fraud and Lemon Law Lawyer who handles cases throughout Pennsylvania and New Jersey. If you or someone you know is having trouble with a vehicle that they purchased, contact the Law Office of Michael F. Niznik for a free consultation. We maintain two offices for your convenience and can be reached 24/7 at 267-589-0601.

Tags: Philadelphia car dealer fraud lawyer, Montgomery County car dealer fraud lawyer, New Jersey car dealer fraud lawyer, Lemon Law lawyer, Philadelphia lemon law lawyer, New Jersey lemon law lawyer, used car fraud lawyer, Pennsylvania car dealer fraud lawyer.

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