What is Dealer Fraud?
Auto Dealer Fraud refers to deceptive and unlawful practices used by automobile dealers during advertising, pricing negotiations and sales and financing of a vehicle.
These practices can occur during almost any stage of the vehicle purchasing process.
Bait and Switch
This is a form of false advertising. The dealer advertises the vehicle at an enticing price, but when you go to the dealership, they inform you the advertised vehicle is no longer available, and then they try to pressure you into purchasing a more expensive vehicle, or the same vehicle at a higher price.
This is where the dealer adds on additional options to the price without disclosing it to you.
Vehicle Trade-in Undervaluation
The dealer purposefully undervalues or underpays you for your trade-in.
Negative Equity Vehicle
Or Trade in Overestimation, where you owe more on your vehicle than it is worth, but the dealer misrepresents the value by elevating it to the amount you owe and adds the difference to the new vehicle price.
New Dealer Return
This is when the dealer misrepresents and sells a vehicle as “new”, when it was actually returned to the dealership because of a defect or persistent mechanical problem
Failure to Disclose
Also known as Title Fraud, is where a dealer has a Salvaged or Flood-Damaged Vehicle and is sold to the consumer without disclosing the vehicle has incurred significant damage, has been designated as a salvage vehicle or has been flood damaged.
Odometer or Mileage Rollback
](Related to Title Fraud) where the vehicle mileage has been altered to conceal the true vehicle mileage.
This is where the dealer quotes you an inflated monthly payment, and you accept. Then they add on additional accessories trying to obtain the quoted amount.
Certified Use Vehicle
Where certain dealerships and manufacturers implement a “Certified Use Vehicle Program” that are supposed to guarantee the vehicle is in good working order and free from major structural damage, but then label “unqualified” vehicles as “Certified”.
Where the customer does not qualify for the financing terms of the original contract, and has the customer return to sign a new contract with different terms and “backdates” the new contract with the date of the original contract.
In many states, victims of auto dealer fraud are required to contact the auto dealer first to afford the dealer the opportunity to resolve the problem, before the victim can pursue legal action. If the dealer fails to resolve your issue, you may then consult an attorney and determine if you should proceed with a civil lawsuit.
It is not the position of WCCSC that ALL auto dealers commit fraud however, if you are a victim of dealer fraud we may be able to assist you with identifying the issues. WCCSC\’s support automobile dealership that conduct business fair and honestly.