5. USED CARS SOLD "AS IS" HAS ITS LIMITS - PART 2
"SOLD AS IS" DOES NOT PERMIT A USED CAR DEALER TO COMMIT FRAUD
Used cars sold "as is" invokes an old legal principle embodied in the classic warning "caveat emptor" or "let
the buyer beware". However the law does not extend "buyer beware" to any fraud or misrepresentation a
dealer makes in order to deceive a buyer in to purchasing a used car. Used car buyers who can prove a dealer defrauded them
can go to court and have the used car dealer pay for repairs and, in some cases, punitive damages. We will cover the main
sorts of a fraud a used car buyer may sue for.
INTENTIONAL MISPRESENTATION: This sort of misrepresentation, which is commonly called fraud, falls in to 3 general categories:
MISREPRESENTING THE FACTS: The used car dealer knowingly makes a false statement regarding a material fact about the car's
condition with the intent of deceiving the buyer. EXAMPLE: A used car dealer claims a vehicle's brakes have just been serviced
with "all brand new parts" when the dealer knows they have not been serviced at all.
FRAUD BY CONCEALMENT- This type of fraud fall into two sub-categories:
ACTIVE CONCEALMENT: The used car dealer actively conceals a material defect on the car with the intent of deceiving a buyer.
EXAMPLE: The dealer puts extra thick motor oil in a car's engine to conceal an engine "knock".
FAILURE TO DISCLOSE WHEN THERE IS A DUTY TO DISCLOSE (PASSIVE CONCEALMENT): The used car dealer is aware of a material defect with a car but
fails to disclose the defect when the dealer has an obligation to do so. Normally a dealer has a duty to disclose any substantial
defect that relates to car's safety or required equipment. EXAMPLE: The dealer in the normal course of preparing a car for sale
discovers the car has a major crack in the chassis/frame which could break while driving but fails to
inform the buyer.
MAKING A PROMISE WITH OUT THE INTENT OF PERFORMING IT: A used car dealer makes a buyer a promise the dealer has no intention of
performing in order to induce the buyer in to buying a car. EXAMPLE: The dealer promises a buyer that they will
install new tires on a car when the buyer brings it back at a later date.