Examples of New Jersey Car Dealer Fraud

October 9, 2018


Car dealers commit fraud in a multitude of ways, but the most common examples include material misrepresentation and omissions. Examples of car dealer misconduct include:

Dealer lied about the financing

Many times, dealers will take a deposit, then later tell you the financing “fell through” and request a higher down payment or demand a higher overall vehicle price. This is a bait and switch tactic and it is prohibited under the Consumer Fraud Act.


Dealer lied about the accident history of car

Under New Jersey law, a New Jersey car dealer is required to disclose to a buyer, and in its advertisements, whether a vehicle sustained prior damage totaling more than $1000.00 in repairs. Failure to disclose this information constitutes a CFA violation.

Dealer lied about the mechanical condition of the car

The purchase of an automobile is one of the most important investments you will make. The need for safety and well-being of your passengers cannot be overstated. As such, the mechanical condition of the car is one of the most important aspects when deciding which vehicle to purchase.

When a car dealer misrepresents the vehicle's condition, that is a material aspect of the purchase, and a material misrepresentation is illegal under the law. For example, a dealer may lie about a vehicle’s recall status, or misrepresent that the recalls were fixed. Dealers may also lie about the number of prior owners, or lie about the mechanical condition of the car – all of which constitutes fraud.

Dealer did not disclose car’s lemon history or lemon buyback

Dealers are required to disclose an indication on a vehicle’s title history. Indications include whether the vehicle was repurchased by the manufacturer for being a lemon. Failures to disclose whether the vehicle was a lemon is a violation of the CFA.

Dealer sold a damaged car and lied about the damage

Dealer lied about the warranty

Dealer lied about the advertised price

In addition to a claim for fraud under the New Jersey Consumer Fraud Act, when a dealer charges more than the advertised price for a vehicle, consumers can sue the dealer under the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act. This law prohibits New Jersey car dealers from giving or displaying notices that contain a provision that violate clearly established rights of Plaintiff or responsibilities of Defendants, as established by State or Federal law. N.J.S.A. 56:12-15.

Dealer used bait and switch tactics in the sale

Bait and switch tactics are prohibited in New Jersey. What is bait and switch? Bait and switch occurs where the car dealer advertises the price of a vehicle with no intention to sell the car at the advertised price. Or the dealer takes a deposit on the advertised price, then later tells the consumer that the financing “fell through” and the consumer will have to pay a higher price for the vehicle. Both are prohibited by the New Jersey Consumer Fraud Act.

Dealer gave you a Carfax that misled you

Dealer gave you a Carfax that did not disclose a prior accident


Dealer gave you an out of date Carfax that was not properly updated

To read more about the New Jersey Consumer Fraud Act, please click the link below:



If you or someone you know is the victim of a car dealer's fraud, contact Attorney Michael F. Niznik for a free consultation at 267-589-0601 or via email at Michael@NiznikLaw.com


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