Used Car Purchase Problems

Used Car Purchase Problems

As part of my practice I do what are known as “consumer law” cases. The majority of these start with a phone call and someone saying, “I just bought a car.” I want to give you a quick lesson on what you can do if you buy a used car and you think you were not treated fairly.

Fortunately, Oregon has a law known as the Unlawful Trade Practices Act (“UTPA”), ORS 646.608, et seq. This law applies to car purchases as well as a variety of other consumer transactions. It is helpful in at least three ways.

First, if a car dealer makes a misrepresentation (i.e., “lies”) while selling you a car, you have a claim under the Act. The advantage here is that under the UTPA, you only have to prove your case by “the preponderance of the evidence.” This means you only have to prove that more likely than not you were lied to. Without the Act, you would have to prove fraud, and fraud has to be proven by “clear and convincing evidence,” which is very difficult to do.

Second, while every used car dealer will sell a car ‘as-is,” with no warranties as to its condition, the UTPA requires dealers to reveal, without being first asked, any “material defects” that the dealer “knew or should have known” about. This issue commonly arises where the consumer learns after the fact that the car had been in an accident prior to its purchase. The consumer may be entitled to “rescission” of the contract (consumer returns car and get money back), or money damages equal to the purchase price less the value of the car now that it’s known it has been in a prior accident.

To prove such a claim, the consumer must first prove that the dealer knew or should have known about the prior accident. This is done by either proving the dealer had documents in its possession concerning the prior accident or hiring an expert who will testify that any reasonable inspection of the vehicle (such as is done by dealers prior to selling their cars) would have revealed evidence of the prior accident.

Next, the consumer must prove that the car has a material defect. This term cannot be precisely defined. It means the problem cannot be small or minor. Defects which either largely effect the value of the car, its safety or its performance arguably are material defects.

The third advantage of the UTPA is that it provides for prevailing party attorney fees. This means if you win a suit against the car dealer, the dealer will have to pay for your attorney fees. Further, the  court may award attorney fees to a prevailing defendant “only if the court finds that an objectively reasonable basis for bringing the action or asserting the ground for appeal did not exist.”  This is highly unlikely to be the case.