Friday, May 18, 2018

I made a bond claim on a car dealer… why am I getting sued?

If you have just been served papers (summons and complaint) from a car dealer’s bond, you’re probably already aware that Oregon car dealers are required by law to carry a bond. When a person is a victim of a car dealer’s fraudulent representations, he/she can make a claim on the dealer’s bond. If the bond receives multiple claims that exceed the amount of the bond, the bond company will initiate an action with the court and present the entire bond amount for the claimants to work out among themselves. That action is called an “interpleader”.

If the Complaint you have been served says “Interpleader” on it, you are likely named as a possible claimant to the bond and probably not being accused of doing something wrong. In Oregon, you must file an answer with the court within 30 days of receiving the Summons and Complaint to stake your claim to the bond. If you fail to file your answer on time, you may lose out on your claim to the bond altogether. If you need assistance filing an answer, or if you just want to discuss your options, you can contact Hanson and Walgenkim for a free consultation. 

Friday, April 27, 2018

Can I Sue a Car Dealership for Misrepresentation?

If you just bought a car and it’s not working as it should, you may be wondering if you can sue the dealership. If the dealership made a material misrepresentation in order to sell you the car, you might have a case.

There are many forms of misrepresentation. For example the dealer may have lied to you about the condition of the vehicle. You may have asked the dealer if your car was ever in an accident. If that car was in an accident and the dealer answered no, that lie is a misrepresentation. Another common misrepresentation is false advertisement, such as bait and switch. You might see a dealer advertise a car for one price, and then attempt to sell it for a higher price or attempt to sell you a different vehicle altogether.

Another misrepresentation that you can sue a dealership for is lying about the mileage. Federal and state laws require accurate disclosures of a vehicle’s mileage. If a dealer fails to tell the truth about the mileage, you might be able sue that dealer.

There are many more misrepresentations out there and it is something that happens every day. If you feel like a dealer made a misrepresentation please call for a free case evaluation today.

Friday, June 23, 2017

My Car Failed DEQ!

Photo by Robert Couse-Baker
My car failed DEQ. Now what?

Many Oregonians buy used cars and find out it will not pass DEQ. Frequently, these same buyers ask “is it illegal to sell a car that won’t pass DEQ?” The quick answer is yes, it is illegal.

Legal requirement

If a dealer sells a used car to someone who lives in a metro area that requires DEQ testing, the dealer must ensure that the vehicle can pass the DEQ test at the time of sale, unless the dealer first discloses that the car cannot pass. Typically what happens is a consumer buys the car, then a few days down the road the check engine light comes on. When the consumer takes the car in for its DEQ test, it will fail. According to the Oregon Department of Environmental Quality, if a check engine light is illuminated on your dashboard, your car will not pass the DEQ test.

Why did the Check Engine light come on after I bought my car?

A check engine light can come on for a variety of reasons, but they all relate to something needing attention with a car. If a dealer has a car in his inventory that has a check engine light on, he can simply reset the light without fixing the problem. This will keep the light off until the car completes a drive cycle. The amount of time needed for the drive cycle to complete will vary from car to car, but it is usually long enough for a dealer to sell the car. Frequently these are problems with emission sensors or faulty catalytic convertors, which will require repairs.  This practice is illegal under Oregon’s Unlawful Trade Practices Act.

Is it illegal for a dealer to sell a car without a catalytic converter?

Many used cars are sold with aftermarket parts installed or with modified exhaust systems. This might include a straight pipe, high performance mufflers, or other equipment intended to increase the car’s performance. If the dealer does not disclose that these modifications will cause the car to fail DEQ, that is illegal. It is illegal because a car with faulty emission equipment will not pass DEQ.

What do I do?

It is illegal for a car dealer to sell a car in Oregon that cannot pass its DEQ test to a consumer who lives in a DEQ county. If you just purchased a used car and it has failed its DEQ test or the check engine light has recently turned on, please call our office at 503-383-1496 for a free consultation to see if we can help you with your problems.

Tuesday, May 30, 2017

FTC Buyers Guide 2017

On November 18, 2016 the Federal Trade Commission (FTC) amended the Used Motor Vehicle Trade Regulation (FTC Used Car Rule), which made several changes to the FTC Used Car Buyers Guide. The FTC Used Car Buyers Guide is a sticker approved by the FTC, and required to be affixed on the rear passenger window of used vehicles a dealer is offering for sale. The 2016 amendment to the FTC Used Car Rule purposely corrected a common confusion to the Buyers Guide – the AS IS clause.
Used car dealers often use the AS IS clause of the Buyers Guide to avoid any and all liability arising from used car sales. Whenever a consumer complains about a car purchase, dealers usually refuse to provide any remedy, believing that the AS IS clause shields them from all liability. Many consumers are also convinced that they have no remedy even when the dealer has plainly violated various consumer protection statutes. In an attempt to clear up the confusion, the FTC made the following amendment to the AS IS clause:
Old Rule:

YOU WILL PAY ALL COSTS FOR ANY REPAIRS. The dealer assumes no responsibility for any repairs regardless of any oral statements about the vehicle.

New Rule:


Contrary to what dealers think, AS IS does not mean that the dealer is completely absolved of any liability after the sale. As the new language suggests, AS IS simply means that the dealer is not offering any warranties with the sale of the vehicle. The Oregon Attorney General has further clarified this distinction in the official commentary of the Unlawful Trade Practice Act:
“Unless explicitly disclosed prior to a sale or lease, a motor vehicle that is offered for sale or lease to the public is represented, either directly or by implication, to be roadworthy when it is sold, to have an unbranded title and to have no undisclosed material defects. . . for used vehicles, even if the dealer states on the FTC Buyers Guide (“As Is”) that the dealer is not providing a warranty, the dealer must still disclose material defects about which the dealer knew or should have known.”
OAR 137-020-0020(3)(o) Official Commentary. In other words, if the dealer is selling a car that is not roadworthy, has a branded title, or has other material defects, the dealer must make a separate disclosure. Simply providing the AS IS disclosure in the FTC Buyers Guide is not enough.
Generally, it is a good idea to write down all of the dealer’s promises or representations on the contract prior to signing. However, even if you signed the AS IS clause and failed to write anything down, you may still have a remedy for purchasing a car with problems if the dealer knew or should have known of the defects. 

Thursday, January 8, 2015

Top 10 Things You Should Do When Buying a Used Car

by Young Walgenkim, Adam Hanson, Christopher Hamilton

Whether you are a first time car buyer or a seasoned veteran, you want to be equipped and ready before taking on a car dealer. If you are buying a car in Oregon, here are the top 10 things you should remember to do in every used car purchase.

10. Take someone with you.

It is much easier for a salesperson to take advantage of you when you are alone because you are more vulnerable to suggestions. Also, if you don’t take someone with you, you don’t have a witness if something goes wrong.

9. Get pre-approved for your loan.

Unless you are paying cash for your purchase, you should always check with your bank or credit union to see if you can get a good interest rate before you purchase your car. Dealers employ many different tactics to try to make the most out of the sale, and many of them involve manipulating financing numbers. If you get pre-approved, you take away many of the dealer’s tools to take advantage of you. Also, although it is illegal in many states, many dealers charge a higher price for financed vehicles vs. cash purchase.

8. Take the car to a mechanic

If you are serious about making the purchase, take the time and spend the extra couple of hundred dollars to take it to your mechanic to find potential problems before you make the purchase. You are already spending thousands of dollars for this vehicle. It makes sense to spend a little extra to make sure you know exactly what you are buying. If your mechanic finds problems with the vehicle, it gives you negotiating leverage if you still want to buy the car. If the dealer will not let your mechanic inspect the car, it’s a good indication they are hiding something.

7. Look up the dealership

You want to find out who you are dealing with before you even decide to visit the dealership. There are many consumer review websites, such as the Better Business Bureau (BBB), Yelp, Google+, etc. that will give you an idea of what kind of reputation the dealership has. Also, you can look up the dealer on the Attorney General’s website to see if complaints have been filed against them. Here is the link for Oregon:

Finally, make sure to check out the dealership’s website. Sometimes dealers make all kinds of promises on their website that they may not promise in person. Some examples are “Free CarFax for every vehicle,” “All of our vehicles are fully inspected,” and “We give full warranties on all of our vehicles.” If you find these promises on the dealer’s website, print them out and ask the dealer to honor them.

6. Look up and save advertisements

Search the VIN number of the car you are interested in on Google. Many times, different ads will show different prices and offer different promises. In Oregon, the dealership is required to offer you the lowest price the dealer has advertised. Also, save every ad you can find on your car. If problems arise in the future, the ads may come in handy. For more information, see our older blog post on this subject:

5. Ask for a Carfax or Autocheck

Most dealers run a vehicle history check (either CarFax or Autocheck) on every vehicle in their inventory. It only makes sense to know what they know before negotiating a price for the vehicle. So, don’t be shy about asking for a copy. Sometimes dealers leave out certain information, so you need to get the entire vehicle history.

Carfax will report prior wrecks, odometer discrepancies, and service history. But remember, Carfax may not report everything. Just because the the Carfax is clean does NOT mean the car is clean. Carfax is not a substitute for an inspection by a mechanic.

4. Take pictures

Most of us carry around cameras everywhere we go. Why not put it to a good use when buying a car? If any problems arise in the future, you want to have proof of what the car looked like before you purchased it. Be sure to take pictures of the following:

  • the body on all sides
  • close up pictures of all stickers on the car
  • under the hood
  • the dash (including the odometer)
  • the interior
  • the underside

3. Ask lots of questions

Remember, you are buying a car with a mysterious past. Don’t be afraid to ask as many questions as you can think of. What the dealer tells you can become a promise that you can hold them to. So ask about any problems with the engine, transmission, leaks, etc. Ask if the car has been in an accident in the past. Ask whether it was inspected by the dealer’s mechanic. If it was, ask for an inspection report.

2. Read the documents

After hours of negotiating comes the signing of paperwork. Many consumers gloss over this portion because they are exhausted from hours of negotiating. Dealers know this and try to sneak in undesirable terms to your contract. This is when you need to be the most alert. If you don’t understand something, have them explain it to you. Make sure the paperwork accurately reflects what you are agreeing to. Here are some common items to look over.

  • Purchase price
  • Trade-in value
  • Addons (warranties, service contract, theft protection, etc.)
  • Unknown charges

Remember when you asked the dealer all those questions about the car? You can write down their answers on the contract and have them sign it. Also, if you don’t agree with something on the contract, cross it out and write in your changes.

1. Be prepared to walk away (don’t sign just because you are exhausted)

By the time you are in the office reviewing the contract, you are probably willing to sign anything to be done with the deal. No matter what the dealer tells you, you always have the option to just walk away. Before you sign anything, ask yourself these questions:

  • Do I really want this car?
  • Is this a fair price for this car?
  • Are they giving me a fair price for my trade-in?
  • Can I really make these monthly payments?

Don’t be pressured to sign anything you are not comfortable with. Remember, you can always walk away.

Wednesday, August 6, 2014

What does “As-Is” mean in a car deal?

If you just bought a used car from a dealer, you probably signed several documents saying you are purchasing the car “as-is.” What does this mean? It basically means you get what you see. No warranties, no promises.

Does this mean I am stuck with this car?

Well, no. Although the “as-is” clause protects the dealer to some extent, there are still remedies available to the consumer.

1. Uniform Commercial Code (UCC) Rejection/Revocation.

The UCC allows the buyer to reject any purchased goods within a reasonable time for inspection. So if you just purchased the car, you may be able to return it and get your money back. If you decide to “reject” the car, you must notify the dealer immediately, and not treat the car as you own. Even after accepting the car, if you later learn that the car is substantially different from what was described or promised, you may be able to revoke your acceptance.

2. Express Warranties

Just because the dealer is selling you the car “as-is” doesn’t mean he can turn around and make all of his promises invalid. If the dealer makes factual promises or representations of the car (such as “this car has 50,000 miles on it” or “we put a new engine it last year”), that is an express warranty that you can hold him to. In most states dealers cannot disclaim express warranties.

3. Unlawful Trade Practices Act (UTPA) Disclosures

In Oregon, car dealers are required to make disclosures about certain defects on the cars they sell. The Attorney General’s Official Commentary to the Motor Vehicle Price and Sales Disclosure Rules states:

“Unless explicitly disclosed prior to a sale or lease, a motor vehicle that is offered for sale or lease to the public is represented, either directly or by implication, to be roadworthy when it is sold, to have an unbranded title and to have no undisclosed material defects. . . Examples of negligent disregard of some things that should put a dealer on notice and trigger its duty to disclose might include, but is not limited to, a large pool of oil or antifreeze under the vehicle, dark colored smoke coming from an exhaust pipe, water stains on carpet or doors, a different color paint than the body under the hood or in the trunk or tires that are worn very unevenly.” OAR 137-020-0020(3)(o), Official Commentary.

Check your state’s Unfair and Deceptive Acts and Practices (UDAP) statute to see if your state provides similar prohibitions.

If you bought a car that is causing you problems, the best thing to do is to contact an attorney and ask about your rights and remedies.

Saturday, April 5, 2014

Does Oregon have a 3 day return law for car purchases?

The short answer is no. The 3 day return law (or 3 day right of rescission) generally applies to real estate purchases, and not to vehicles. But that does not mean you are completely out of luck. If you really want to return the car you just bought and get your money back, you may be able to use some of the following methods:

1. Denied financing

If you signed a financing agreement at the dealership, the dealer is likely looking to “sell” the financing contract to a lender under the terms stated. If the dealer cannot find a lender who will approve the financing under those terms, you have the right to cancel the contract. Many dealers don’t know this law, so expect some opposition. They will likely try to pressure you into a new financing agreement with a higher APR and/or monthly payments. 

2. Lemon Law - Trouble with new cars

If it’s a new car you bought, Oregon’s lemon law allows you to bring the car back to the dealer for repairs. If the problem remains after 3 attempts (or 30 days in the repair shop, or 2 attempts to fix a serious safety defect) you have the right to return the car and get your money back.  

3. UCC Rejection/Revocation

The Uniform Commercial Code allows the purchaser the right to reject or revoke any good if it does not conform to the contract. So if the dealer promised you a car with a V-6 engine, but you were given a 4 cylinder engine, you may be able to “undo” the contract and get your money back.

4. Unlawful Trade Practices Act (UTPA)

The UTPA provides the consumer with protections against a wide range of deceptive tactics, some of which include lying about quality of the vehicle, and failure to disclose serious problems. Although the UTPA does not specifically provide a remedy to “undo” the contract, if the problem causes severe reduction to the value of your car, you may be able to get a full rescission. Be prepared to face great opposition from the dealer, as they will attempt to hide behind the “as-is” clause of your contract.

The best thing to do is to contact an attorney who will know how to handle these situations and help you maximize your recovery. If you are determined to go at it alone, just be prepared for long waits and bitter fights. If there’s one thing dealers hate, it’s taking a car back.