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BUYING A USED VEHICLE - YOUR LEGAL RIGHTS

Posted by Adam Alexander | Nov 22, 2019 | 0 Comments

The old English principle of Caveat Emptor (let the buyer beware), is a very good rule to remember when you are purchasing a used vehicle. Generally, the Michigan Lemon Law does NOT apply to used vehicles. (Unless it is covered by a manufacturer's express warranty at the time of purchase or lease). Moreover, dealers are not required by Michigan law to give used car buyers a three-day right to cancel. So what can you do if you purchase a defective used vehicle?

DO YOUR HOMEWORK

Purchasing a used vehicle requires more preparation than you may think.  What seems like a relatively minor life choice can turn your world upside down in a matter of hours.  I know this because I have spoken with hundreds of Michigan consumers over the past 24 years and I have filed hundreds of breach of warranty auto cases. Lives are altered and finances are ruined based of this seemingly simple decision. This is how my conversation often goes:

Consumer: “I just bought a used car/truck a few days/weeks/months ago and it broke down. The dealer/seller refuses to fix it or help me. What can I do?”

Me: “Did you get a warranty with it?”

Consumer: “No, it was sold AS-IS”.

Me: “Did you get it inspected by a certified mechanic before or after you purchased it?”

Consumer: “No”.

Me: “You have limited legal options, and what options you do have may cost you a lot of money in attorney fees”.

USED VEHICLE WARRANTIES

If your used vehicle comes with a warranty, be sure to read the terms and conditions and understand the limitations.  Most used vehicle warranties are short term, have limited coverage for only specific mechanical problems, and sometimes come with a co-pay or labor-only coverage. And of course, most used vehicle warranties have a “pre-existing condition” exclusion.

A pre-existing condition is a current problem or repair that a vehicle had before you purchased the vehicle or extended warranty. This is very problematic for consumers because, from my experience, sellers and warranty companies almost always claim that a defect was pre-existing in an effort to deny coverage. So, if you are considering purchasing an expensive after-market or third-party warranty for your vehicle, understand the potential drawbacks and know what is covered

BUYER'S GUIDE (THE STICKER ON THE WINDOW)

The seller is required by federal law to include a window sticker on the vehicle with very detailed information, including:

-the major mechanical and electrical systems on the car, including some of the major problems you should look out for;

-whether the vehicle is being sold "as is" or with a warranty;

-what percentage of the repair costs a dealer will pay under the warranty;

-to get all promises in writing;

-to ask to have the car inspected by an independent mechanic before you buy;

-the dealer's contact information, including the contact for complaints; and

-to remember: spoken promises are difficult to enforce.

Be sure there is a Buyer's Guide on display and be very careful to read that guide before you make the purchase. If there is no Buyer's Guide, seriously consider passing on that vehicle. If there are inconsistencies with the information on the Buyer's Guide and what the seller is telling you, beware.

AS-IS DISCLAIMER

If you purchased the vehicle “as-is” it means you buy it with all its defects and nonconformities.  The as-is notice should be displayed clearly on the Buyer's Guide. Essentially, because there are no implied warranties, you may not have a legal claim if the vehicle breaks down.  The only potential claim you may have is for fraud. 

FRAUD IS DIFFICULT TO PROVE

In general, to constitute actionable fraud you must establish that (1) defendant made a material representation; (2) it was false; (3) when it was made and defendant knew that it was false, or made it recklessly, without knowledge of its truth and as a positive assertion; (4) defendant made it with the intent that it should be acted upon by plaintiff; (5) plaintiff did act in reliance upon it; and (6) plaintiff thereby suffered injury. Hi-Way Motor Co v Int'l Harvester Co, 398 Mich. 330, 336; 247 N.W.2d 813 (1976), quoting Candler v Heigho, 208 Mich. 115, 121, 121; 175 NW 141 (Mich. 1919). 

My biggest hurdle as a lawyer is proving the seller made ANY material representation. Many statements made by salespersons are verbal. This creates a “he said, she said” scenario which does not play well in a court room. Auto sales professionals know that most of their verbal promises are not binding in court. Therefore, they will tell you a lot of good things about the used vehicle, such as:

“It runs great;”

“you won't have any problems with it;”

“everything is in working order;”

“it has a few problems, but we'll fix those for you;” or

“it's never been in an accident”.

You and I know these are sometimes lies. But, unfortunately, statements like these do not create a warranty and they likely won't support a fraud claim in court. Michigan courts view statements like this as “opinions” or “puffing.” 

In sum, salespeople will say just about anything to get you to buy. The documents you sign at the dealership will often include disclaimers and other legal language that prevents you from filing a successful legal claim against them.  So how can you avoid being lied it?

HIRE A MECHANIC TO INSPECT THE VEHICLE BEFORE YOU PURCHASE IT

Ask the seller to allow you to have the car inspected by an independent mechanic before you buy it. In fact, ask before you start talking price, before you test drive it, and actually the minute you walk on the lot. If they don't allow this, walk away. While it is not a requirement to allow an inspection, most sellers will let you do it. Sometimes they send a salesperson along with you while other dealers will simply put a temporary plate on the vehicle and allow you to drive it away after providing proper identification.

These days there are companies who specialize in pre-sale inspections in most metropolitan locations. If there are no options in your area, make a few phone calls to local mechanics and see what they would charge. It's worth every dollar you have to spend to avoid purchasing a wreck.

ASK THE SELLER TO PUT IT IN WRITING

If the salesperson makes representations about the mechanical health of the vehicle, ask them to write it down and sign and date it. If they won't do that, how can you trust the representation?

DO SOME RESEARCH ON THE VEHICLE

Consider paying for some information on the vehicle prior to purchase. For example:

CarFax offers a vehicle history for $39.99 at https://www.carfax.com/vehicle-history-reports/.  The CarFax report often includes basic information regarding accidents, prior repairs and sometimes allows you to spot odometer rollbacks.

The Michigan Secretary of State offers a title history. The order form is here: https://www.michigan.gov/documents/bdvr154_16269_7.pdf. A title history is important in used car cases if you suspect the vehicle had a salvage title, the odometer was rolled back or the vehicle was in a significant accident.

CONCLUSION 

Your legal rights in a used vehicle transaction are limited. If a seller lies to you about a very specific and material fact, you may have a potential cause of action for fraud. If a seller hides known defects from you, or you feel you have been defrauded, contact the Alexander Law Firm at (248) 246-6353.

About the Author

Adam Alexander

I was born to solve problems and with an innate ability to separate right from wrong. I turned these virtues into a career focused on fighting corporate overreach and deception and representing consumers who are wronged.  Since 1996 I have helped thousands of Michigan residents fight back and pro...

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