Lawsuit of the Month - April 2022

Dealer XT 22 Apr 2022 5 min read


If you sell cars for less than $10,000, you may think your dealership is not at risk of consumer claims and demand letters. The truth is, lawsuits against dealerships for sales of lower-priced vehicles are more common than you think. 

Check out this real-life demand letter sent to a California car dealership recently:


Important Points:

  • The total price of the car, including tax and license, was only $3,809.45.

  • The customer was claiming that the mileage on the car was WAY higher than the mileage that was advertised and listed on the contract.

  • It was actually just a typo! 

  • The customer saw the actual mileage when they sat in the car and drove away.

  • Still, the customer demanded:

                - Cancel the contract

                - Refund all their money back 

                - For the Dealer to agree to a formal and public court injunction (VERY bad)

                - Attorneys' Fees and Costs

Smaller dealers are easier targets for Plaintiff’s lawyers due to the many loopholes that may be found in their processes, disclosures, inspections, and other important steps in selling a car.

A helpful tip to keep in mind is to have a proper procedure in place. It is also helpful to keep all records of the deal jacket, date and time-stamped pictures of the vehicle, and full evidence of the negotiation with signed disclosures of the history and condition of the vehicle.

An automated lawsuit prevention system is the BEST way to protect yourself. Also, make sure your employees are aware of the importance of good customer service, disclosing vehicle history properly, and handling complaints promptly and professionally.

Do you have good procedures in place to safeguard your business? 

Are you sure? We’re happy to schedule a complimentary consultation to discuss.