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Caveat emptor: Let the buyer beware. Nowhere does this phrase have more application than the purchase of a used car. The purchase of a used car is a major investment for a college student. What first appears to be a major means of fulfillment can become a major source of stress when the engine fails and the repair bills start to mount.
Fortunately, Maine law provides some limited protection for used car purchases from dealers. A dealer is defined as anyone engaged in the business of selling used motor vehicles. The statutory requirements imposed on dealers do not apply to a private sale. Thus, if you respond to a classified advertisement from someone who is selling their only car, your primary protection is to have the car fully inspected by a mechanic you trust before you hand over the purchase price. I also recommend a full independent inspection before buying from a dealer.
Dealers are required by law to provide potential purchasers with two types of written information: A warranty statement, and a disclosure statement.
In the warranty statement, the dealer must provide proof that the vehicle has been inspected and meets the inspection standards. While this sounds like a broad form of assurance, it only pertains to the standards for inspection, including the body, brakes, exhaust, glass, horn and lights, mirrors, seat belts, steering, tires, windshield wipers and pollution control equipment. Notice the inspection standards do not include the engine or the transmission, the most expensive components of a vehicle. If the engine fails the day after you drive the car off the lot, this warranty may not help you.
A dealer is also required to describe in the warranty statement any other warranty the dealer is providing. This additional warranty is entirely optional to the dealer; they are not required to provide additional warranties. Fortunately, market competition has encouraged dealers to provide various types of used car warranties. I encourage you to shop around to find the best warranty available.
If an additional warranty is provided, the dealer must describe its basic terms and coverage. The warranty must describe where any repairs will be done, the expiration date or mileage when the warranty will expire, and the extent of the warranty, i.e. a repair warranty. It also must state what the dealer will do if a problem occurs.
If the dealer breaches either warranty, the buyer must first give written notice of the alleged breach before bringing suit. If court action is required, the buyer can seek to rescind the sale to recover the purchase price, less the cost of any damage to the vehicle caused by the buyer, and any loss in value if the car has been owned for more than thirty days. Attorney’s fees may also be recovered.
The dealer is also required to provide a disclosure statement. This includes identification information for the vehicle; the dealer’s duty to disclose the name and address of the previous owner; all known mechanical defects; all known substantial damage of $2,000 or more; a statement whether implied warranties are excluded or modified; a statement if the vehicle was repossessed or returned to the manufacturer for warranty or “Lemon Law” problems (new cars only); and the dealer’s refund policy. If the vehicle was bought at an out-of-state auction, the dealer does not need to provide the disclosure but must indicate the car was purchased at auction.
The dealer is obligated to obtain the necessary information from the seller. This requirement offers the dealer some protection from a fraud suit if the dealer has simply passed on the information received from the seller. For example, if the seller tells the dealer the car has never been in an accident, and it is not obvious to the dealer the information is false, the dealer probably could not be sued for fraud if you later find out the car was hit by a dump truck and repaired.
For this reason, it important for you to ask the dealer for the name and address of the prior owner. You should then contact the prior owner to verify the dealer’s information. If the information is verified and is later proven false, you may have a claim against the prior owner. If the information does not check out, you should not buy the car from a dealer that is providing misinformation.
As in any important transaction, it is important to do your homework, what lawyers call “due diligence.” If you do, the odds are much greater that you will not get stranded on the road when your gleaming 1988 Miata breaks down on your way to your final exam. If the dealer offers additional warranties, these may offer you some protection against a huge repair bill.
Bangor Daily News