6. USED CARS SOLD "AS IS" HAS ITS LIMITS - PART 3
REMEDIES FOR FRAUD, NEGLIGENT MISREPRESENTATION, AND PROVING FRAUD

NEGLIGENT (UNINTENTIONAL) MISREPRESENTATION is essentially a misrepesentation made with NO INTENT to defraud. It usually involves a:

1. Used car dealer makes a misrepresentation that dealer SHOULD HAVE KNOWN was false but didn't know it OR a
2. Used car dealer fails to disclose a fact (they had a duty to disclose) because the dealer was unaware of that fact but SHOULD HAVE BEEN AWARE of it.

WHAT FRAUD IS NOT: A used car salesperson telling a buyer the used car is in "good condition" isn't fraud. Statements such as "it's a great buy", etc. are NOT MATERIAL representations and can NOT be the basis for fraud.

DAMAGES: There are two methods of determing damages for fraud. Both involve giving the buyer the quality of used car the buyer believed they were actually getting:

1. OUT OF POCKET LOSS: The dollar amount a buyer would have to pay to put their car in the condition they believed they were getting when they bought it. EXAMPLE: A buyer was mislead and purchased a car that needed a new engine costing $3,000.00. The court would award $3,000.00
2. BENEFIT OF THE BARGAIN: The difference between the car's real value as sold and the real value as the buyer believed they were buying. EXAMPLE: A buyer buys a car for $6,000.00 with the odometer rolled back from 92,000 miles to 32,000. The car with 32,000 miles is worth $10,000.00 and the actual value of the car is $5,000.00. The buyer is awarded $5,000.00 ($10,000.00 - $5,000.00)
   NOTE: Courts will often use the method which awards the buyer more money so the defrauding party does not profit at all from their fraud.

PUNITIVE DAMAGES: If the fraud is outrageous the court may award a buyer additional money so as to punish the dealer and deter such conduct in the future.