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The Smart Consumer's Guide to Buying a Used Car

Aug 30, 2008
The new millennium has thus far been a decade of rampant consumer fraud. Shrewd companies and salespersons cook up new way to rip off the public on a daily, if not an hourly basis. Concealed collision damage, rolled-back odometers, "laundered lemon" cars, where the manufacturer has repurchased the vehicle under lemon laws and then neglected to disclose the car's history to the next buyer, used cars sold as new - these are just a few areas where dealerships and manufacturers are frequently committing fraud against consumers. My firm, by the way, specializes in representing consumers who have purchased "lemon" vehicle or who have been the victims of car dealer fraud.

This short piece is designed to assist you in buying a used car, providing you with the proper tools to protect yourself from being ripped off on your next purchase. PLEASE PRINT THIS ARTICLE OFF AND CARRY IT WITH YOU WHEN YOU GO OUT TO PURCHASE YOUR NEXT USED CAR. SHOW IT TO THE USED CAR SALES-PERSON IF HE OR SHE BALKS AT PROVIDING YOU WITH ANY OF THE REQUIRED INFORMATION. I just purchased a used car with excellent results, and I am not an expert mechanic; rather, I'm just a shrewd consumer, which is an outgrowth of the fact that I'm a shrewd and effective consumer lawyer. The following tips, if followed, are much more likely to result in a satisfactory used car purchase.

BRENNAN'S EIGHT-POINT CHECKLIST OF REQUIREMENTS IN BUYING A USED CAR AND AVOIDING BECOMING THE VICTIM OF A FRAUD

1) Always insist on a warranty. "As-is" can easily be translated into legal jargon as, "You're stuck, sucker." Even a 30- or 10-day warranty is better than just "as-is".

2) Insist that the dealer print on the warranty, in bold letters, "THIS CAR HAS BEEN INSPECTED FOR COLLISION DAMAGE AND COLLISION REPAIRS AND HAS BEEN FOUND TO BE FREE OF COLLISION DAMAGE OR REPAIRS." This then becomes a part of the warranty.

3) Insist that the dealer prints on the warranty, in bold letters, "THIS CAR HAS NOT BEEN RETURNED TO A DEALER OR MANUFACTURER BECAUSE OF LEMON LAW DEFECTS OR COMPLAINTS." If the dealer can run a warranty service print-out, insist that they do so and attach it to the warranty itself, with an additional message printed on the warranty: "THE ATTACHED WARRANTY SERVICE HISTORY REPRESENTS THE COMPLETE WARRANTY HISTORY FOR THIS CAR, ACCORDING TO ALL MANUFACTURER'S RECORDS."

4) You will receive an odometer disclosure statement as part of the vehicle purchase. If there is any inscription on it such as "TMU" (stands for "true miles unknown"), watch out: this car's odometer has probably been tampered with.

5) Insist upon a test drive of at least 10 miles. Insist on driving the car in varying road conditions: city streets, highway, straight and curvy roads both. Really shrewd consumers arrange to have a friendly professional mechanic, not affiliated with the selling dealership, to accompany them for the ride. Paying a friendly mechanic $50.00 to do the test-drive can spare you a lot of heartache later on.

6) Before you buy, have the car inspected by a non-dealer-affiliated professional mechanic. The friendly professional mechanic who accompanied you on the test drive should do just fine for this. Have the car thoroughly looked over, as you will probably be depending on the vehicle, especially for its safety and dependability, for the next several years. Later on, anything beyond routine maintenance expenses will prove galling, so know what you are getting into up front.

7) Do research. You may like the looks of the car, but it pays to check out the vehicle's service record with Consumer Reports or on the Internet. See the National Highway Traffic Safety Administration site (search under "NHTSA") for warranty, defect and repair information about any car you are considering buying.

8) Although they are controversial, I recommend buying an extended warranty, particularly if you intend on keeping the vehicle for a long time.

That's the checklist, which should provide joy rather than grief in most cases. It's your insurance policy, so print it out and carry it with you when you next make a used-car purchase. Check off each number as you complete that step of the list; then you'll stand a much better chance of not becoming the victim of a fraud in a used car sale.

I will now explain some issues concerning the documentation normally accompanying a used-car sales transaction, including points to keep your eyes peeled for and some definite red flags that signal you not to buy that car.

All dealerships try to put off the documentation step for the end. Whenever I buy a used car, I insist that the documentation step be done first. In short, after I've become interested in a car, I want to see the documentation then and there, before I begin discussing sales terms. All dealers have "dealer jackets" containing all documents for each separate car on the lot. Review these papers first, and only then go for a test-drive and mechanical inspection.

At the time of the sales close, you can expect that the salesperson or a clerk will present you with a stack of fine-print documents which would take a week to read. No one - not even an experienced lawyer - can read all of those documents in a short time. However, you must at least glance at these documents, and keep an eye out for the following pertinent information:

The "Odometer Disclosure Statement"

This is a document required by federal law to accompany all sales of used cars. Read it, and make sure the dealership signs it, for by doing so the dealership is certifying that the actual miles on the car are accurately reflected on the odometer. If the "Odometer Disclosure Statement" has an entry such as "TMU" (which stands for "True Miles Unknown"), or "Actual Miles Unknown", or any such entry, don't buy the car! In all likelihood, the vehicle has more miles on it than what is actually showing on the odometer.

The "BUYER'S GUIDE"

The "Buyer's Guide" is the window sticker on a used car which shows whether the car comes with a warranty. My firm suggestion to all used car buyers: only buy cars with warranties. Do not buy cars "as-is." The salesperson will frequently tell you that some little old lady only drove the car to and from church, and that dealership knows the service history of the car because that's where it was serviced, etc., etc.--it's all a pile of prairie pickles. If you buy a car "as-is", expect to be ripped off. Expect problems with the car. When a dealership sells a car "as-is, it is telling you clearly that it wants no further responsibility for the vehicle as soon as you drive it off the lot. And if the dealership doesn't want any responsibility for the car, what does that tell you about the vehicle?

The moral of the story: buy cars with warranties, even if the warranty is for only 30 days. Warranties give you rights in case the car was sold to you fraudulently or it turns out to be a lemon. When you buy a car "as-is", that may be the end of the line for you as far as pursuing any fraud or lemon-law claim.

The 'Warranty History"

You have to request this, and you should request it. Many dealerships have access to the warranty history of the cars they sell, and particularly in the case of new car dealerships for the same make of vehicles. For example, if you are buying a used Chevy from an authorized Chevy dealership which services and sells new Chevys, then that dealership has computerized access to the warranty history of the car. This means that you can learn of any repairs done to that vehicle while it was under its original warranty. You can quickly learn if the car was a lemon by its warranty history.

If you don't understand the "warranty history", have some knowledgeable explain it to you. Make sure you understand it before you buy the car.

And, insist that the "warranty history" be attached to the warranty itself, with a representation that it represents the complete warranty history for that car. This then gives the consumer additional legal rights if it turns out the vehicle was sold fraudulently or it is a lemon.

"DISCLOSURE NOTICES"

If you are given anything called a "Disclosure Notice", or the like, BEWARE!!! Read over all the documents to ensure that you are not being sold a recycled, or "laundered", lemon. Anything called a "Disclosure Notice" which discusses the mechanical condition of the car is a red flag to back out of the deal and leave the dealership. You do not want to buy a "laundered lemon" - it will likely cost you more trouble than you ever imagined possible. In short, don't buy a car if there's any indication that it's a "laundered lemon."

The above, then, are the basic documents you must keep your eyes peeled for. In fact, for your own protection you must demand to see them. The dealership may not have the "warranty history", but it should have all the others.
About the Author
Robert F. Brennan, Esq. is a principal with Brennan, Wiener & Associates, an AV-rated law firm in La Crescenta, CA.  His firm specializes in consumer protection litigation, including lemon law, car dealer fraud and consumer class actions.  He can be reached through his website: http://brennanlaw.com
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