AUTO AUCTION CLAIMS
 

Many consumers purchasing cars from auctions believe they are buying a used car at a wholesale price.  Frequently they end up paying thousands of dollars for vehicles with  altered odometers, mechanical problems, accident damage and other problems.  The sellers create an as-is form to eliminate any liability and generally the auto auction refuses to provide a refund. However, auctions frequently violate state and federal disclosure so there are certain claims which can be made.  

1. FEDERAL ODOMETER LAW 

The federal odometer statute states, "A person transferring ownership of a motor vehicle shall give the (buyer) the following written disclosure: 

a) Disclosure of the cumulative mileage registered on the vehicle, or

b) disclosure that the mileage is unknown.  49 U.S.C. 32705

Federal regulations dictate a specific form and a certification.  (See form at the end of this page).  

Many auction houses do not provide an odometer statement or do not provide the odometer certification as the federal regulations require.  Note that when confronted with any discrepancies, these facilities almost always deny liability.  

THE FEDERAL WINDOW STICKER RULE

Federal law requires a window sticker indicating whether the car is sold as is or with a warranty.  16 Code Federal Regulations (CFR) 455 tells a dealer: 

A) "Before you offer a used vehicle for sale to a consumer, you must prepare, fill in as applicable and display on that vehicle a ``Buyers Guide'' as required by this Rule. (1) The Buyers Guide shall be displayed prominently and conspicuously in any location on a vehicle and in such a fashion that both sides are readily readable...  (2) The capitalization, punctuation and wording of all items, headings, and text on the form must be exactly as required by this Rule. The entire form must be printed in 100% black ink on a white stock no smaller than 11 inches high by 7\1/4\ inches wide...

At the end of this webpage is a copy of a federal window sticker.

B) Other FTC Regulations  

There are other FTC regulations which dealers and auctions frequently violate:  

 "It is a deceptive act or practice for any used vehicle dealer... (1) To misrepresent the mechanical condition of a used vehicle; (2) To misrepresent the terms of any warranty offered in connection with the sale of a used vehicle; and (3) To represent that a used vehicle is sold with a warranty when the vehicle is sold without any warranty...  {or to] fail to make available, prior to sale, the terms of any written warranty offered in connection with the sale of a used vehicle.    16 CFR 455 

Sec. 455.4 "Contrary statements. You may not make any statements, oral or written, or take other actions which alter or contradict the disclosures required by Secs. 455.2 and 455.3. You may negotiate over warranty coverage, as provided in Sec. 455.2(b) of this part, as long as the final warranty terms are identified in the contract of sale and summarized on the copy of the window form you give to the buyer."

Sec. 455.5 "Spanish language sales. If you conduct a sale in Spanish, the window form required by Sec. 455.2 and the contract disclosures required by Sec. 455.3 must be in that language."

C. Remedies for Window Sticker Violations

Failure to place the window sticker on the vehicle is a deceptive practice and under New Jersey law as well as some other states, the consumer may sue for additional damages.  The consumer may also attempt to cancel the deal.  

FEDERAL FORMS 

1. FTC Window Sticker

2. Federal Odometer Disclosure Statement 49 CFR (Code of Federal Regulations) 580.1 

REFERENCES

Sheldon, Automobile Fraud (National Consumer Law Center, 2000) www.consumerlaw.org)

 

____________________________________________________________ 

BUYERS GUIDE

IMPORTANT: Spoken promises are difficult to enforce. Ask the dealer to put all promises in writing. Keep this form.

__________________________________________________________________________________________________________

VEHICLE MAKE MODEL YEAR VIN NUMBER

____________________________________________________

DEALER STOCK NUMBER (Optional)

WARRANTIES FOR THIS VEHICLE:

AS IS - NO WARRANTY

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

WARRANTY

FULL LIMITED WARANTY. The dealer will pay ____% of the labor and ____% of the parts for the coveredsystems that fail during the warranty period. Ask the dealer for a copy of the warranty document for a full explanation of warranty coverage, exclusions, and the dealerís repair obligations. Under statelaw, "implied warranties" may give you even more rights.

SYSTEMS COVERED: DURATION:

_____________________________________ __________________________________

SERVICE CONTRACT. A service contract is available at an extra charge on this vehicle. Ask for details as to coverage, deductible, price, and exclusions. If you buy a service contract within 90 days of the time of sale, state law "implied warranties" may give you additional rights.

PRE PURCHASE INSPECTION: ASK THE DEALER IF YOU MAY HAVE THIS VEHICLE INSPECTED BY YOUR MECHANIC EITHER ON OR OFF THE LOT.

SEE THE BACK OF THIS FORM for important additional information, including a list of some major defects that may occur in used motor vehicles.

__________________________________________________________              _____________________________
                                      CUSTOMER'S NAME                                                                                 STOCK NO.

________________________________________________________________________

 

    ODOMETER DISCLOSURE STATEMENT   

Federal law requires that you state the mileage upon transfer of ownership.  Failure to complete or provide a false statement may result in fines and / or imprisonment.

I, __________________________________________ (transferor's or seller's name, Print) state that the odometer now reads ___________________ (no tenths) miles and to the best of my knowledge that it reflects the actual mileage of the vehicle described below, unless one of the following statements is checked.
(1) I hereby certify that to the best of my knowledge the odometer reading reflects the amount of mileage in excess of its mechanical limits.
(2) I hereby certify that the odometer reading is NOT the actual mileage.
WARNING - ODOMETER DISCREPANCY.

___________________________________________________
  TRANSFEROR'S SIGNATURE (SELLER)
____________________________________________________
  PRINTED NAME
____________________________________________________
  TRANSFEROR'S ADDRESS (STREET - SELLER)
____________________________________________________
  CITY                                                        STATE                                     ZIP CODE
____________________________________________________
  DATE
 ___________________________________________________
  TRANSFEREE'S SIGNATURE (BUYER)
____________________________________________________
  PRINTED NAME
____________________________________________________
  TRANSFEREE'S ADDRESS (STREET - BUYER)
____________________________________________________
  CITY                                                        STATE                                     ZIP CODE

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