Suing an Auto Dealer for Fraud

Use these links to jump to different sections:

• Pennsylvania’s Lemon Law
• Federal Laws Governing Used Cars
• Lawyer Up

Auto fraud is a problem that continues to affect many Pennsylvania residents. Perhaps a car dealership sold you a vehicle with known defects without disclosing them. Maybe the dealer misled you as to the terms of warranty coverage or failed to provide you with a valid title. Whatever the case, if you have been the victim of consumer fraud, you may have several remedies available to you under state and federal laws. “Vehicles are very complicated and manufacturers sometimes try to push stuff out there without adequately making sure it’s safe and working properly,” says Christina Gill Roseman, a consumer law attorney in Pittsburgh. “I have a case now where an older vehicle burned up, when it was not running and just outside my client’s garage. We filed suit, had a motion hearing and, lo and behold, six days later, Kia issued a recall for this exact issue. They may think, ‘Problem solved,’ but what about all those other people out there who had this issue and you told them nothing was wrong? I’m out here fighting for a reason.”

Pennsylvania’s Lemon Law

All states currently enforce lemon laws designed to protect buyers of certain vehicles that fail to meet certain basic performance and safety standards. Pennsylvania’s Lemon Law specifically applies to new car purchases that meet the following criteria:

• The vehicle is sold or leased for personal use (as opposed to commercial use);
• The vehicle is designed to transport 15 or fewer people on public roads;
• The vehicle was purchased in Pennsylvania and subsequently registered here, or purchased in another state and initially registered in Pennsylvania; and
• The vehicle suffers a “defect or condition that substantially impairs” its “use, value or safety” during the 12 months following delivery, the first 12,000 miles driven, or the term of the manufacturer’s warranty, whichever expires first.

Under these circumstances, the dealer and manufacturer are required to repair and cover any defects in the car. If the vehicle cannot be repaired—or it remains with the dealer for a total of 30 days during the Lemon Law period—you have the right to demand a refund or a replacement vehicle. The dealer may, however, demand an “offset” to account for the time you were able to use the vehicle. Such an offset cannot exceed 10 percent of the purchase price or 10 cents per mile driven prior to the first repair began. Also note you cannot assert your rights under the Pennsylvania Lemon Law if your vehicle suffers any problems due to your abuse, neglect, or alteration of the motor vehicle.

Federal Laws Governing Used Cars

The Pennsylvania Lemon Law only applies to new vehicles. But that does not mean purchasers of used cars are without any legal protection. The Magnuson Moss Warranty Act is a federal equivalent to the Lemon Law that does not impose the same mileage or new-car restrictions as Pennsylvania does, although the initial defect must still occur within the term of the manufacturer or dealer’s original warranty. The Federal Trade Commission also enforces a Used Car Rule that prohibits any car dealer from misrepresenting the “mechanical condition” or warranty terms of any used vehicle. The dealer must also disclose upfront if a vehicle is sold “as-is” and without a warranty. And where there is a warranty, the dealer must inform the buyer how much of any repair costs will be covered. It is also important for used car buyers to exercise their own due diligence. You should always obtain a vehicle history report, which contains a record of any prior accidents involving a car or truck. If a car salesperson knowingly sells you a car that has an accident record and fails to disclose that fact, you may be able to sue for damages.

Lawyer Up

“Is it possible to do something like this on your own? Yes. Is it a good idea? No. Because the manufacturers treat me very differently than they treat unrepresented consumers. ‘Oh no, your car has to be this very special, very narrow thing to qualify under Lemon Law, I’m very sorry,’” Roseman says. “They will lie and misrepresent the law.” Roseman deals with lemon law cases “all day, every day,” she says. And with representation, the process can proceed much more smoothly and quickly, and legal action increases your chances of a good result. The other reason to call an auto fraud attorney, she says: “It’s free. Most of the attorneys in Pennsylvania who do what I do, if you lose, you don’t pay us.” Lemon law attorneys often utilize fee shifting, which is similar to contingency but better, Roseman says. “With contingency, you don’t pay any money down but the attorney gets 33 to 40 percent of your recovery. With lemon laws, the attorney fees are awarded in addition to your reward. It doesn’t diminish your recovery in any respect. So there’s no reason not to.” For more information on this area of law, contact an auto dealer fraud lawyer, and see our overview of consumer law.