When a New Car Has Damage or Was Sold Before - Whitney, LLP
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By: Daniel W. Whitney, Jr., Esq.
Whitney, LLP
409 Washington Ave, Ste 750
Towson, MD 21204
410 583 8000 - Phone
[email protected]
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Hi, this is Dan Whitney with the Whitney Law Firm in Towson, Maryland. Today we're going to talk about the interesting topic of when a new car is not really a new car. So, I've been a lawyer for about 10 years. I've handled many car dealership cases, many problems involving car dealerships across Maryland. And some of these arise out of the issue of somebody buys a car that is advertised as new and somehow they find out that it's actually not a new car. So how does this happen?

First of all, the dealer lies, which, that happens all the time, but practically speaking, what happens is usually it's one of the two things. One, a vehicle will get delivered, meaning another consumer takes possession of it, drives it off the lot as if it was their own. The vehicle gets delivered to somebody else, that person uses the car for an extended period of time. And then usually, something happens like financing is not approved, they have to bring that car back.

Now, in Maryland, there are disclosure requirements where if a car is delivered to somebody else and there's some other factors, but generally speaking, that must be disclosed to a new buyer because of course that buyer is going to want to know. They're going to find it important to know before they buy a car, "Has this been delivered to somebody else? Has somebody else used this like it's their own car? Because if so, I may not want that. I may want a real new car that's actually new in every sense of the word. And I just don't want anybody else to have possessed it and used it how they may have used it. I want a new car."

So, the first one is it gets delivered to somebody else. Somehow, the deal falls apart. It comes back and that's not disclosed. We had a case where that scenario came to light after our client bought a car that had about 600 miles on it. She went to activate the Sirius radio. And when she got home and she tried to activate it, she was told, "This has already been activated." She said, "Well, that doesn't make any sense. This is a new car. It has 600 miles. I was told that the manager's wife drove it. Why would somebody activate the Sirius radio?" And she had the foresight to say, "Well, what was the person's name who activated the subscription?"

Fortunately, it was a pretty unique name, not John Smith, but whatever it was, it was unique. I don't remember it exactly. And she contacted our office, provided the name of that person. I reached out to that person and I said, "Hey, I'm Dan Whitney. I represent this, Ms. So-and-so in connection with this car. Here's what happened. Can you tell me why did you activate the Sirius radio?" And he said, "Oh, I took delivery of the car. It was mine. I bought it. And then I got a call from the dealership about a week later saying, 'If you want to keep it, you have to put down more money'." And the gentleman said, "I didn't want to do that so I just took the car back to the dealership and gave it back to them and said, 'You keep it'."

So that's a perfect example of when a dealer should have disclosed, "This has been delivered to somebody else." But of course they didn't because they wanted to make more money and their fear was, "If we tell somebody this, they're going to say, 'I want a thousand or two off the sticker price because now it's a used car'." So of course they just stayed quiet, let their greed control them and decided to try and shoot somebody. And in that case, it didn't work out for them.

Now, the other scenario when a car that is advertised as new may not actually be new is when it is damaged before it is sold to the new buyer. So you might say, "Well, how on earth does the new car get damaged?" Well, it happens all the time. It could be damaged on a test drive. It could be damaged where a lot attendant backs into something or hit something. It could be damaged being transported from a factory. It could be damaged during a DX, which is a dealer exchange when let's say a customer wants a certain car but it's at another certain dealership and the dealerships work out a trade agreements. And a lot attendant usually would drive the car or the salesperson would drive the car back to the dealer and switched the other one out and get it there. But the point is, there's many opportunities for a new car to sustain damage before somebody buys it.

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