It always pays to spend time doing research and due diligence before any major purchase is made. This extends to automobile purchases as any buyer would prefer value for money.
So, when unscrupulous auto dealers misrepresent information about a particular vehicle, buyers are cheated out of a fair exchange for all the effort and money they put in.
If a dealership has been found to have defrauded a number of customers for years, these victims can band together to hire the services of a class action attorney to seek appropriate compensation.
Below are some telltale signs of auto dealer fraud that consumers should watch out for.
- Dealer claims that the price initially advertised is no longer applicable
- Addition of “free” package options
- Dealer recommends an alternative financing option due to buyer’s credit score
- Dealer asks a non-buyer to sign on a car loan to serve as “reference” for the actual buyer
- Dealer allows the buyer to take a vehicle home but calls afterward to say that financing was not approved
This is the bait-and-switch tactic. The advertised vehicle probably never had a particular price point in the first place.
When potential customers call in to ask for more details about a certain car they saw in an ad, a dishonest dealer will offer a “better” car as an alternative — but at a higher price. They may be held liable for auto dealer fraud for doing so.
What consumers can do: Always be wary of deals that are simply too good to be true. The consumer can walk away or call to verify the advertised offer. Take screenshots or bring a copy of the car ad if getting in touch with and/or visiting the dealership. Look out for any fine print in the advertisement, as well.
Be extremely wary of auto dealers offering so-called “free package options.” What supposedly are freebies or enhancements may not actually be so in the purchase contract. These freebies come in many forms, including longer warranties, rust protection, flood flights, and other supposed upgrades.
What consumers can do: Be thorough in examining the contract before signing on the dotted line. If the contract mentions certain features or additional free package options, ask the dealer to take these out. Or, if there really are free additions to the package, make sure the contract doesn’t stipulate extra charges.
When processing a loan application, some car dealers may suddenly backtrack and say that credit score is insufficient to close the purchase. The goal is usually to get a buyer to say yes to an alternative financing option that largely favors the dealer.
What consumers can do: Before seriously engaging a dealer in a car purchase, the consumer should already have a solid knowledge of their credit score. Aside from loved ones and close family members, no other person should be more knowledgeable about one’s financial standing than themselves.
If a non-buyer is asked by an acquaintance or a close friend to co-sign on a car loan upon the suggestion of a dealer, auto fraud is likely taking place. Parties who sign on a car loan are responsible for paying back the total amount. This often happens when someone can’t qualify for a vehicle purchase on their own.
What consumers can do: Co-signing on car loans is a big red flag. Never agree to such a setup or simply walk away from the deal.
This is what is called a yo-yo sale. If financing purportedly did not come through even after a buyer went home with a vehicle, sneaky dealers would allow the buyer to keep the car. But in exchange, they would levy higher interest rates or down payments.
What consumers can do: It’s well within one’s rights to decline the offer. After refusing, the buyer can reclaim any trade-in or payment made if the car is returned within 24 hours from the time the dealer called about it. On the other hand, the deal can be accepted but financing must be done through official channels (e.g., banks, credit unions).
Suspect auto dealer fraud? Consider pursuing legal action
The team of experienced lawyers from Hogue & Belong Attorneys at Law will help you seek justice against businesses engaging in auto dealer fraud.
If there are other victims of these illegal activities, the team can build a strong case for a class action lawsuit. Rest assured that you’ll be working with one of the best class action attorneys in San Diego. Give them a call at 619.238.4720 or send an email to inquiries(at)hoguebelonglaw(dotted)com.