Articles Posted in Car Dealership Fraud

Many times vehicles are sold with known frame or other types of body damage. Dealers are required to disclose material facts to purchasers. Damaged vehicles are probably valued at 25-80% of the price you have paid and possibly nothing if the prior damages was severe. Safety concerns are aways an important issue, on top of the monetary losses.

These cases are more common than you think. There are actually special auctions that only sell damaged vehicles to dealers. Some are even owned by insurance companies. I have litigated many cases where Certified Used Cars have been sold in a damaged condition despite an extensive 100-point inspection.
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I would have to say that it is worth the money BUT you really need to understand the limitations of CARFAX so you don’t get burned. CARFAX operates like any other database: garbage in, garbage out. It is only as good as its source of information. If you look at a CARFAX and it does not show an accident that does not mean that the car was not in an accident. It only means that the CARFAX database does not show an accident.

CARFAX does not have access to CLUE (Comprehensive Loss Underwriting Exchange), which is a huge database maintained by the insurance companies of all claims paid on autos – both property damage and bodily injury.
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Most reputable car dealers are a members of NADA, National Association of Auto Dealers. You might find this hard to believe, but there is actually a code of ethics for dealerships. Here it is:

1. ADVERTISING

This dealership is committed to advertising its products and services in a clear, conspicuous and accurate manner that fully complies with applicable legal requirements. This includes disclosing credit terms in accordance with the federal Truth in Lending Act and consistent with state and local law.
2. FINANCIAL SERVICES

Implicit in these standards is the requirement that NADA members comply fully with all federal, state, and local laws governing their businesses.

At this dealership, the finance and insurance professionals will at all times…

* Disclose fully to customers the costs, terms, and contractual obligations of credit and lease transactions. Documents will be written in a simple, plain, and unambiguous manner to the extent permitted by federal and state law.
* Offer optional insurance or other optional products in a clear and informative manner. Any purchase of such a product must reflect a voluntary choice by the consumer.
* Advertise financial services products in a clear and non-deceptive manner.
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Car salesmen have one goal: sell you a car and take as much of your money as possible. There are all types of unflattering terms that are insulting, and they describe customers. Before you buy or lease your next car you need to know this.

1. Bumping — Raising what the customer says he wants to pay for a car (“If Mr. Customer says he only wants to pay $250 a month, just say, ‘up to …?’ He’ll probably bump himself up to $300.”)

2. Closer — An experienced salesperson who is brought in to make the customer agree to the dealership’s terms.

3. The feel of the wheel will seal the deal – the idea that if customers test drive a car, they will fall in love and buy it.
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Cherry Hill Triplex was sued in New Jersey Superior Court for Consumer Fraud. The case went to arbitration and the plaintiff received a favorable award. This is not a final award since Cherry Hill Triplex has the right to present the case to a jury and let a New Jersey jury decide if they did something improper.

Plaintiff claims that she was informed the dealership no longer had the trade-in car she had left the day before, according to testimony. The sales staff then forced her to buy the van despite her objections and attempts to return the car.
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Several Bob Ciasulli automobile dealerships settled a lawsuit filed by the State of New Jersey.
They agreed to pay the State $425,000 for costs, fees and in furtherance of the interests of the State of New Jersey (2002).

These dealerships were included in the settlement:

B.C.T. Imports, Inc.; Bob Ciasulli Toyota, Inc.; Bob Ciasulli Jeep/Eagle, Inc.; Bob Ciasulli Hyundai, Inc.; Arrow Hyundai, Inc.; Arrow Auto Imports, Inc.; Mack Auto Imports, Inc.; Mack Dodge, Inc.; Mack Pontiac/Cadillac, Inc.; Monmouth American, Inc.; Monmouth Chrysler/Plymouth, Inc.; M.T. Imports, Inc.; Route 88 Vehicle Corp.; United Galaxy, Inc.; and Universal Global, Inc.

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Route 22 Auto Sales, Inc., which does business as Route 22 Toyota, is located at 109 Route 22 West Hillside; Route 22 Automobiles, Inc., which does business as Route 22 Honda, is located at 105 Route 22 West, Hillside; and Route 22 Nissan is located at 399 Route 22 West, Hillside.

They settled a lawsuit that was filed against them by the State of New Jersey for deceptive business practices (Feb. 8, 1999). It was alleged that they:

1 Used bait-and-switch advertising (this means they falsely advertised vehicles for sale);
2 Misrepresented that many products, such as GAP coverage, extended service agreements, window etching, credit life insurance or credit life accident health and disability insurance, were required to be purchased;
3 Misrepresented mileage;
4 Failed to allow lessees one business day to review the lease agreement.
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