What Are Common Forms Of Car Dealer Fraud?
on December 12, 2017

Everyone knows that when buying a new car, it’s important to be skeptical over things like pricing, advertising, and quotes. The process of buying a car can be complicated further when a car dealer is misleading or deceitful. This is considered car dealer fraud, and as a consumer, you have the right to receive accurate and fair information during the car buying process.

Car dealer fraud can occur at any stage or area of the car buying process. To help you navigate and look out for deceptive practices, here are some common forms of car dealer fraud:

  1. Inflation of Invoice Pricing

The invoice price is the amount a dealer paid the manufacturer of the vehicle. A car dealer may report a higher invoice price by adding additional costs to the invoice price, ignoring that those costs were already included in the original invoice price. This makes it seem like the car is worth more when it’s really not.

  1. The Bait and Switch

It’s common to see dealers promote sales prominently in their advertisements to attract customers. This action can become fraudulent when an advertised deal lures people into the dealership for an advertised sale, but find the vehicle or sale to be unavailable. Consequently, consumers will then be aggressively persuaded towards a different, higher-priced car.

  1. Concealing “Add-On” Prices

“Add-ons” are optional warranties or prepaid service programs that are offered at your dealership. During the buying process your dealer may offer these services to you, but concealing them into the final price of your vehicle is a red flag of fraudulent activity. You should be aware of all aspects of the final vehicle price, as well as the prices of each optional “add-on” should you wish to purchase them.

  1. “New” Dealer Returns

Let’s say a car was found to be a lemon as per lemon law and the car was returned to the dealership for a defect that substantially affected the vehicle’s performance or safety. The dealer can engage in fraudulent activity by reselling this car and calling it “new.” Regardless of if the car had been fixed, or was immediately returned shortly after purchasing, the car can no longer be considered new. It’s important to check a car’s history at the time of purchase.

  1. Odometer Rollback

When in the market for a used car, vehicle mileage is a way for consumers to gauge how far along a car is in its lifespan. Adjusting the odometer to conceal a car’s true mileage is a form of fraud and one that could increase the price you pay for the vehicle substantially.

If you suspect you’ve been a victim of car dealer fraud, it is advised you contact the dealer first.

Many states require you to allow the dealer to correct the issue before further legal action is taken. Make sure to document this interaction for your records, highlighting the issue and how you would like to see it resolved.


If you’re looking to seek legal action in a car dealer fraud case, contact Lemon Law Lawyers today. Our team of knowledgeable attorneys can help you protect your rights as a consumer.

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