Frequently Asked Questions About California Auto Dealer Laws
Understanding your rights when purchasing a vehicle from a dealership in California can help protect you from potential fraud and misrepresentation. Our attorneys at Auto Law Firm, PC, have compiled answers to common questions about dealer disclosure requirements and other important aspects of California auto sales laws.
Do dealers have to disclose accident history in California?
No, dealerships are not required to disclose accident or damage history in California. However, dealers cannot make false statements about accident and damage history. For example, if you asked about prior accidents and the dealer says “this vehicle has never been in an accident,” and that statement is not true, then you would have a misrepresentation claim. If you think you have a misrepresentation claim, contact us for a free case evaluation.
Do dealers have to disclose a history of mechanical problems in California?
No, California law does not specifically require dealers to disclose prior mechanical issues with vehicles they sell. However, dealers are prohibited from making false statements about a vehicle’s mechanical condition. If a dealer explicitly denies mechanical problems when asked or misrepresents the vehicle’s condition, this constitutes fraud. Undisclosed mechanical problems can lead to significant repair costs and safety concerns for buyers. If you suspect a dealer concealed known mechanical issues, you may have grounds for legal action.
What is a “salvage” vehicle?
A salvage vehicle specifically refers to a vehicle that has been branded with a “salvage” title by the California Department of Motor Vehicles. This designation occurs when a vehicle has been damaged to the extent that the repair costs would exceed its pre-accident value, typically due to collision, fire, or flood damage. Many consumers mistakenly believe that any vehicle with an accident history or frame damage automatically has a salvage title, but this is not the case. Undisclosed title brands represent a serious form of dealer fraud, as they significantly affect a vehicle’s value and insurability.
How long does a dealer have to pay off the loan on a trade-in vehicle?
In California, dealers must pay off the loan on a trade-in vehicle within 21 days of taking possession. This requirement helps protect consumers from continuing to be responsible for loan payments after trading in their vehicle. If a dealer fails to pay off your trade-in loan within this timeframe, you may face credit damage and remain liable for the debt. Delayed payoffs can also result in additional interest charges and late fees that you should not be responsible for.
Can a dealer cancel my contract after the purchase?
Yes, dealers in California can cancel a contract after purchase, but only within 10 days and under specific conditions. Most purchase contracts include a “Seller’s Right to Cancel” provision that allows the dealer to cancel if they cannot secure financing for your purchase. For this cancellation to be valid, the dealer must notify you within 10 days of the purchase date and must return 100% of your down payment and any trade-in vehicle. If the dealer cannot return your trade-in, they cannot legally cancel the contract.
We Can Help Protect Your Rights
If you believe a dealer has violated California auto sales laws or misrepresented a vehicle’s condition, contact us at (619) 878-7037 or email us for a free consultation. Our experienced lawyers help consumers throughout California fight against auto dealer fraud and unfair practices.