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Fraudulent, Deceptive, or illegal Car Sales. Pennsylvania Lemon Law.
What You Should Know When Shopping for a Car. Making Warranty Claims Against Car Dealers, Manufacturers, and Service Contract Companies.
How to Protect Yourself When Purchasing a Car.
Buying a car is a transaction fraught with danger for consumers. In a worst case scenario, a buyer can end up owing tens of thousands of dollars for a car that breaks down and can’t be driven. Car dealers want the buyer’s attention to be on the car, which will look great, even if it is used, while distracting the buyers’ attention from the terms and conditions of the sale.
The terms and conditions are in the paperwork, including especially the installment sale agreement, which the buyer usually does not see for the first time until after deciding to make a purchase and a lot of times never reads. Yet, the terms and conditions specify whether there is warranty coverage along with the details of the financial terms. The primary purpose of the terms and conditions is to limit the rights of buyers and protect the dealer and finance company. The purpose of the contract is to bind the consumer after the consumer no longer wants the transaction.
Buyer’s should not sign an installment sale agreement without taking time to read it. A smart consumer should tell the salesperson their purchase decision is not final until they read and approve of the written terms and conditions of the sale. In many instances, the contents of the written contract will govern the terms of the transaction over any verbal representations of the salesperson. The contract is the written document and not the salesperson’s verbal representations.
One document the buyer can see before the purchase is the Buyer’s Guide that is supposed to be posted on the car’s window. Purchasers should make a point of reading it. If the purchaser does not understand the information in the Buyer’s Guide, they should try to look it up on the internet or ask someone who knows, but be skeptical of whatever the sale’s person says.
Car Buyer Protections
Pennsylvania Lemon Law Protects New Car Purchasers
The Lemon Law applies to new car purchases and requires dealers to honor their new car warranty. If the dealer cannot fix a new car after three tries during the first year of ownership, the dealer is required to replace the car or rescind the transaction and refund the buyer.
Express Warranties
An express warranty is the written warranty you may get when you purchase a car. When you purchase a new car, you will receive the manufacturer’s warranty. You may also receive the remaining portion of a manufacturer’s warranty when you purchase a used car if the coverage is transferable. A certified used car may come with a manufacturer’s warranty for certified used cars.
A car dealership may also provide its own written warranty on the sale of a used car. If a car is no longer covered under a manufacturer’s warranty, the only express warranty a buyer can receive is going to be provided by the dealer. The willingness of a dealer to provide an express warranty on used cars is the best indication of the dealership’s willingness to stand behind the vehicles they sell. The longer the warranty and the more thorough the coverage, the better.
A car dealership has no obligation to provide a warranty and may sell used cars “as is,” meaning without a warranty. When a car is validly sold “as is,” the dealer has no responsibility for the repair of the vehicle, even if it breaks down right away. In that situation, a buyer’s only recourse against the seller may be to prove the sale was fraudulent. Dealers often try to sell used cars “as is,” and buyers should avoid these transactions.
Unfortunately, warranties are usually complicated contracts filled with terms and conditions designed to limit, condition, or deny coverage, to give the warrantor an out from fulfilling their responsibility. When your warranty claim is denied, that is certainly the time to call a lawyer.
Implied Warranties
Every sale of a car by a dealer includes an implied warranty of merchantability, unless it is disclaimed by the buyer. The implied warranty of merchantability means that the car was fit for its intended purpose or in fair average condition at the time of sale. Basically, it means that the car cannot be broken when sold. Sometimes, a car can have a defect at the time of purchase that does not manifest itself until later when the car breaks down. If you can trace a breakdown to a part that was worn out at the time of purchase, that might be a breach of the implied warranty of merchantability. When a car is sold “as is” that means the implied warranty is disclaimed.
Service Contracts
A service contract is a form of warranty protection you purchase from a third party. We’ve all seen the advertisements. Service contract companies promise to pay to repair your car if it breaks down. Dealers usually receive a commission on the sale of service contracts, so they push them. Service contracts tend to also be complicated contracts filled with terms and conditions designed to limit, condition and deny coverage, so the company never has to pay for repairs.
Protection Against Fraud & Deception
Pennsylvania law requires dealers to disclose on their own certain defective conditions, including:
Frame bent, cracked or twisted;
Engine block or head cracked;
Vehicle unable to pass State inspection;
Transmission damaged, defective or so deteriorated as to require
replacement;
Vehicle flood damaged; and
Differential damaged, defective or so deteriorated as to require
replacement.
The direction to disclose these defects implies that dealers may not have to disclose others defects. But dealers cannot lie about the condition of a car. General descriptions that a car is “good” or “reliable” may not be specific enough to count as a misrepresentation, so it might be a good idea to ask a seller a lot of specific questions about the condition of a vehicle. The more specific, the better. Here is a list of some very specific questions a buyer can ask a dealer about the condition of a used car:
◦ Whether the car has been in prior accidents?
◦ Whether the engine has defective gaskets?
◦ Is coolant leaking into the oil or vice versa?
◦ Whether the engine has had all the maintenance required by the manual?
◦ Whether the engine has had all required oil changes?
◦ Whether the engine is leaking oil?
◦ Whether the engine is leaking coolant?
◦ Whether the transmission fluid has been changed?
◦ Whether the coolant has been changed?
◦ Whether the transmission shifts smoothly?
◦ Whether the transmission is slipping?
◦ Whether the chassis is rusting?
◦ Whether all conditions that could set off the check engine light have been repaired?
◦ Is the catalytic converter worn out?
◦ Does the dealership have a written record of the maintenance or repairs performed on the car in anticipation of selling it?
◦ Ask the dealer to give you a Carfax? (But buy your own if the dealer won’t provide it. The carfax does not replace asking specific questions to the dealer.)
◦ Whether the engine bearings worn out?
◦ Whether the piston rings good?
◦ Whether the shocks and struts in good condition?
◦ Have the shocks and struts ever been replaced?
◦ Whether the motor mounts worn out?
A salesperson may not know the answers to a lot of these questions, but that is probably not what they are going to say. They are probably going to say their mechanics checked out the car and found it to be in sound mechanical condition. When the salesperson denies the existence of specific conditions, and the denial turns out to be false, that is the type of fraudulent misrepresentation that can be actionable, even if you purchased the vehicle “as is.”
What To Do When Your Used Car Breaks Down?
After a used car breaks down, you need to notify the dealer and ask them to fix it. When you do not get satisfaction from the dealer, you want to take the car to another mechanic you trust for an estimate. You want the mechanic to give you a diagnosis of the problem with the price for the repairs. You need to go to another mechanic because the dealer might not be telling you the truth about the vehicle’s condition.
After you get an estimate from a mechanic, you can show it to the dealer and ask the dealer to repair the car. Even if you do not expect the dealer to repair the car, the dealer’s refusal is proof the dealer is breaching any applicable warranties. If you end up taking the dealer to court, one of the things the dealer may ask is why you never showed them the estimate, told them about the problem, or asked them to fix the car.
Service Contracts
The same applies if you are dealing with a service contract. The service contract company will want you to obtain a diagnosis showing a covered breakdown. They may also ask you to have a mechanic tear down the engine at significant cost, so their inspector can further evaluate the engine. It might depend on the wording of the contract, but after the car owner obtains a diagnosis of a covered breakdown, it may not be legal for the company to insist on the owner paying for any additional tear down of the engine.
Legally, the burden is supposed to be on the owner just to obtain a diagnosis of a covered breakdown to make a claim. The burden then shifts to the service contract company to establish an exclusion to coverage. The car owner should not have to pay for any further diagnostics so that the company can establish an exclusion to coverage.
Frequently, even if you have a warranty, the first thing a car dealer, manufacturer, or service company will do is try their best to deny your claim. They may deny your claim illegally. At that point, you are going to need a lawyer to fight back. If you think your claim was wrongfully denied, that is a situation I would like to review.
Lemon Law
For a new car that has broken down within the first year of ownership, you want to keep taking the car back to the dealer who sold it to you. The Lemon Law requires the buyer to give the dealer three chances to repair the car before the buyer can demand a replacement car or refund.