Question

In the US, the Federal Trade Commission (FTC) is tasked with collecting information from consumers and passing on this information to other administrative bodies and policy makers.While the FTC cannot resolve individual complaints, it aggregates this information and passes it on to relevant agencies so that other agencies and policy makers can formulate laws and regulations.

You went to a used car dealer and purchased a used car (“as-is”) without a warranty contract. Let’s say that you cut them a check for $2500 and drove it off the lot. Within 20 minutes of driving it, the car’s engine dies. You take it to your mechanic, who tells you that the timing belt failed and the engine seized as a result. You now need a brand new engine (worth over $3000)

How might you act to resolve this issue? Are there any laws or regulations that could protect your rights in this situation? Are there any governmental bodies that might help you with this situation? Are there any state or federal governmental representatives that might help you in this situation or even prevent such situations from happening to someone else in the future?

Answer 1

Let us first understand what is given.

a) The car is purchased in "as-is" mode. (b) There is no warranty contract

The points that need to be thought about are:

c) Is there an "implied warranty" or not (d) any other dealer guarantee (e) Any contract that mentions about return policy or not (f) whether there is any written assurance about trial of the car and purchase on satisfaction

The Federal Trade Commission has a rule where it wants the dealer to display a Buyer's Guide which mentions the Used Car Rules. This guide is given to the buyer after the sale is done. The guide mentions detail of the vehicle, whether the dealer is selling it on "as-is" basis or with warranty. It mentions about promises made by the dealer to be written which works as a contract.

Now here in this case it is an "as-is" sale and purchase it is important to note whether there was any promise that was made to the buyer or not and if there was a promise made then whether it is written as contract or not. If it is not written then it becomes a very difficult case. This is why many states don't allow "as-is" sale of the used car by the dealers.

Here in this case there is not even an implied warranty as the car was sold and the buyer drove it off.

The best way to try to solve this problem and to avoid this double loss is to

1) directly approach the dealer and apprise him with the problem. The dealers need to do business and may not want to ruin the reputation though any buyer should first get the car inspected from an inspector by paying a small fees or get a warranty from the dealer or should have a trial run however here none of these happened and that is why it is a double loss.

2) if the dealer is not ready to help then the buyer should reach the local representative of the car manufacturer. Generally the representative tries to solve and pacify the consumer locally.

3) If that is of no help because of a bigger issue then the consumer should approach "State Attorney General" or "American Association of Motor Vehicle Administrators.

Though the main problem is of warranty which is missing here thus it would be a difficult case since the onus lies with the buyer to check and recheck the health of the car before purchasing and to have a warranty which mentions what could be done in case of damage or theft and what all should be covered in the warranty.