Auto Fraud & Selling Damaged Cars. Do I need a Consumer Attorney?
DO NOT LET THE DEALER LIE TO YOU ABOUT THE HISTORY
Vehicles that have been damaged can be most lucrative for the dealer to sell. The position is obvious. The dealer can acquire a vehicle at low cost make some minor changes and resell the vehicle in excess of what the fair market value is for that particular vehicle. Freely the dealer might say that it is an irrelevant or tiny white lie however had the customer been made known aware of the defect with regard to the vehicle the transaction would not have occurred the same way. The law in New Jersey requires complete fair and honest disclosure if you think that the disclosure would make a difference in the customer's purchasing decision. This would fall under the category of material in omission of fact. If you omit a material fact from a transaction you are responsible. If you mislead the customer you are responsible. The seller vehicle misrepresenting the history of vehicle or misrepresenting the condition of the vehicle you are liable under most circumstances.
New Jersey consumer laws are some of the strongest in the nation. They prohibit deceptive conduct. There is a large market in buying and selling damaged cars. There are entire auctions dedicated to selling damaged cars.
Selling damaged cars or cars with a negative history is one of the dirty little secrets of the automotive industry. There are certain resources for buying damaged or salvaged vehicles. Many of these auctions are only open to dealers or those who intend to resell the vehicles. The dealers who buy these vehicles from auction frequently fix them and resell them to third parties without disclosing that the vehicle has been in an automobile accident. The vehicle then moves through the stream of commerce and ultimately into the hands of an innocent consumer despite the fact that it has been in a serious automobile accident.
The law in New Jersey assumes that if the seller of a vehicle, a professional seller, makes a representation as to the condition of the vehicle being that it had one owner, that it was driven by a little old lady or that the vehicle was not in an accident, it is the seller’s responsibility to make sure that the representations associated with the sale of the vehicle were correct, proper and accurate. The law again assumes that the seller of the automobile is familiar with the regulations governing the industry and they have an obligation to make sure that the representations associated with the sale of the vehicle are correct.
As a practical matter, it is an industry standard to inspect a vehicle upon acquisition and prior to the sale, which is also known as PDI or pre-delivery inspection. It is during this pre-delivery inspection - which consists of an extensive inspection, usually with trained or skilled certified mechanics - that the dealership should be aware of any prior defects in the vehicle including, but not limited to, damage on the vehicle. It is a common practice in the industry for a dealer to use something called an elcometer wherein they measure the thickness of the paint to determine if the vehicle has been previously painted. If the vehicle has been previously painted, there is a “red flag” and they need to make further investigation to determine that the vehicle has not been in an accident despite the obvious signs of repairs.
Ultimately, the issue becomes: what is the reduction in value of the vehicle had the disclosure been made? Is there a separate market value for vehicles which have been damaged or involved with some type of negative history? As an example, is a negative history of a rent-a-car vehicle worthy of a deduction of market value price? Studies have shown that any negative history of an automobile, whether it be an accident, a rental or some other “negative event,” can potentially affect the market value of the vehicle.
Why would somebody pay market price when there is a reason to deduct from the market price? There are many guides to determine the nature and extent of the market value of any vehicles, such as the Kelly Bluebook and Galves. These books indicate that there is a reduction to the market value of the vehicle for the condition. However, these resources do not provide an appropriate or an exact percentage of reduction, but this number is attributable to the vehicles by experts such as those selling the vehicles, being the new and used car dealerships.
The New Jersey Consumer Fraud Act takes into account all of these considerations when such a case is being litigated. Ultimately, damaged cars or cars with negative histories are worth less and there is no reason that the consumer should pay full price for a vehicle which is not worthy of the market value. Is a vehicle with prior frame damage or repairs in excess of $5,000 equal to an identical or similar vehicle without the similar history? Absolutely not.
The selling of damaged cars is a rampant problem in the automotive industry, which continues on a daily basis. If you think your new or used car has been damaged, you should take appropriate legal action against the dealer.
Call us and let the New Jersey laws assist you in obtaining justice.
The New Jersey Consumer Fraud Act is applicable to those situations in which you acquire a vehicle and there was prior damage which was not disclosed. Many times, there is not any need to prove that the defendant intended to mislead the plaintiff. If the selling dealer makes a representation the potential customers allowed to rely thereon.