Car Dealer Misrepresentation Liability in California

Under federal law, car dealers cannot misrepresent the mechanical condition of a vehicle, the terms and conditions of an existing warranty, or the existence of a vehicle warranty. When someone relies on a misleading or false claim when they buy a faulty vehicle, they may have a claim against the California dealer that sold them the car.

Generally, the two types of claims that arise from deceptive vehicle dealings include negligent misrepresentation and fraudulent misrepresentation. In some situations, it may be possible to sue a car dealership for misrepresentation.

If someone has already purchased a car and then later determines there is an issue with the vehicle, they might have a legal cause of action against the dealer from which they purchased the vehicle. To have a successful lawsuit against a car dealership for misrepresentation, the buyer must show that the dealer omitted or misrepresented material facts about the vehicle, the buyer suffered a financial loss, and they would not have purchased the car if they knew the material facts.

To prove these elements, an individual will have to show that they asked about the condition of the car and the salesperson did not disclose any problems. In these cases, eyewitnesses to the interaction can be very helpful.

To find out if you are eligible to sue a car dealership for misrepresentation in California, it is important to consult with California lawyers.

What Are Some Common Car Dealer Lies in California?

There are many different types of lies and statements that vehicle salespeople and car dealers make to try and entice people into purchasing a car quickly in California, such as:

• We will give a great deal on the trade-in
• This deal is only good for today
• The dealer can lower their monthly costs
• Simply “sign and drive”
• They are providing the lowest rate that is available
• The accident report is trustworthy
• There is another person interested in this vehicle
• The price is not negotiable
• That fee cannot be waived
• The extended warranty is needed on this purchase

Customers should always only buy a vehicle if they feel comfortable doing so at a price they are comfortable paying. The tactics and statements discussed above are commonly used to pressure people into quickly making vehicle purchases.

What Are the Types of Auto Dealer Misrepresentation Claims in California?

In general, there are two main ways auto dealers engage in misrepresentation in California, including failing to disclose material facts and blatant misrepresentation. Common situations in which these arise include:

• Failing to disclose information about the history of the vehicle, such as:
  • Accidents
  • Defects
  • Insurance losses
  • Frame damage
• Bait and switch advertising
• Tampering with the odometer
• Stating that the car has features or options that it does not
• Not honoring a warranty
• Claiming that the customer’s issue is outside of the warranty coverage
• Deceptively inflating the price of the vehicle
• Claiming that the buyer’s financing did not go through and that they need to bring the car back, called yo-yo financing

If you have dealt with any of these situations at car dealerships in California, it is important to have a legal consultation in California to find out your options.

What Is Fraudulent Misrepresentation Under California Law?

In California, fraudulent misrepresentation includes any type of lie or false statement that a car dealer or salesperson uses to trick a customer into an agreement. These misrepresentations can arise in many different ways, such as:

• Gestures or body motions, such as a nod
• Through silence or inaction
• Written words
• Spoken words

A claim of fraudulent misrepresentation is commonly used in connection with contract law. One example of how this may occur is when someone purposefully makes a statement they know is false to another party in order to induce them into signing a contract that they otherwise would not have.

For example, when a car salesperson is not honest about the accident history of a used car in order to get the purchaser to sign the contract, it can be considered fraudulent misrepresentation.

How To Sue a Car Dealer for Fraudulent or Negligent Misrepresentation in California

In order to sue a car dealer for fraudulent or negligent misrepresentation in California, a plaintiff, or buyer, will need to prove the six elements of the claim, including:

• The car dealer or salesperson made a false representation
  • This often involves a direct statement but may include speech that is intended to communicate a fact or create an impression, illusion, or belief.
• The car dealer or salesperson knew that the representation was false or made the representation recklessly without knowing if it was actually true at that time
• The salesperson or car dealer made the representation intending for the plaintiff to rely upon it
• The plaintiff relied upon the representation of the salesperson or car dealer
• It was reasonable for the buyer to rely upon the representation
• The plaintiff suffered financial damages as a result of relying upon the salesperson or car dealer’s false representation

It can be difficult to provide all of these elements in a court of law. Because of this, it is essential to have help from a California lawyer who is trained in gathering evidence of the deceptive trade practices used, finding witnesses, and advocating for their clients in court.

If a plaintiff makes a successful claim of misrepresentation in California, they may be able to obtain contract damages or contract rescission. Contract damages include financial compensation for their losses from the purchase.

Contract rescission means treating the contract as if it never happened and returning both parties to their previous status. This may mean cancelling a contract where the buyer has not made a payment and the buyer returns the vehicle to the dealership.

What Is Negligent Misrepresentation Under California Law?

In California, negligent misrepresentation occurs when someone states a fact without first making sure that it is actually true. Negligence means an individual did not reasonably act under a certain set of circumstances.

The plaintiff, or buyer, has to prove several elements to have a successful negligent misrepresentation claim, including:

• The defendant, or car dealer or salesperson being sued, made a representation in a contract
• That representation was false
• It was made carelessly or without reasonable grounds to believe it was true
• The plaintiff reasonably relied on that representation
• Relying on that representation was the legal cause of the plaintiff’s losses

In these situations, the car dealer or salesperson did not exercise reasonable care or competence to communicate or find information that was true. In other words, they did not verify information which the purchaser relied upon.

Should I Consult a California Auto Fraud Attorney?

If you have experienced any issues at a car dealership in California, it is essential to reach out to a California auto fraud lawyer. If you have purchased a car, motorcycle, truck, or van based on misrepresentation from a car dealer, your lawyer can determine if you have a claim for negligent misrepresentation or fraudulent misrepresentation.

If you have sold a vehicle and you have been sued for negligent misrepresentation or fraudulent misrepresentation, your lawyer may be able to help you avoid liability. Your California auto fraud attorney will be able to explain California law and how it will apply to your situation.

LegalMatch’s free attorney matching services can help you find a California auto fraud attorney in your area at no cost who can start helping you right away. It only takes about 15 minutes to submit your auto fraud concern, so get started today.