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Dealing with Dealerships: Problems & Solutions to Buying a Used Vehicle

Updated: Jan 18, 2022

With the demand for vehicles rising to record levels, buyers have increasingly complained about their experiences with used car dealerships. One reoccurring issue buyers have is getting the vehicle title from the dealership. Buyers have also complained about damages and mechanical issues almost right after driving off the lot. While buyers can usually solve title problems themselves, complex issues involving contract enforcement and vehicle damages may require asking a lawyer. This article will be addressing FAQs to help buyers figure out what they should do next.


Note: This article is about buying used vehicles and might not apply to new vehicle purchases.


What if the Dealership Fails to Transfer Title?


Dealerships must transfer title to the vehicle when the buyer takes delivery of the vehicle (physical possession). However, the dealership may send the title to the financing company beforehand. The financing company has twenty-five (25) days to provide the buyer with the title. The dealership must provide the buyer with the title within thirty (30) days after the sale. OAC 710:60-3-54; See Okla. Stat. tit. 47, § 1107. If the dealership fails to do so, the dealership may be penalized with a $100.00 fine. Dealerships may also incur a $100.00 fine by not properly reassigning the title.


Buyers can submit a complaint to the Oklahoma Used Motor Vehicle and Parts Commission ("Commission"). The Commission then notifies the dealership about the complaint. Dealerships have ten (10) days to respond and must send the Commission copies of all documents. The Commission reviews the complaint and response, conducts further investigation if necessary, and resolves the problem either by telephone or holding an informal mediation with the parties.





Do Dealerships have to Disclose Vehicle Defects to the Buyer?


The Oklahoma Vehicle License And Registration Act requires dealerships to give a written disclosure of any "material damage(s)" to the vehicle. Okla. Stat. tit. 47, § 1112.1(A). Dealerships must also disclose whether the damages were subsequently repaired or not. Vehicle damages are "material" if the cost to make repairs exceeds 3% of the vehicle‘s value or $500.00, whichever is greater and includes the cost for labor and parts. However, this calculation may be reduced by replacing the damaged components with new original manufacturer equipment, parts, or accessories, unless the cumulative repairs or replacement values exceed 10% of the vehicle's retail value. § 1112.1(B)(1). If the cumulative cost of repairs and replacements exceeds 10% of the vehicle's retail value then the damages are deemed "material" and must be disclosed. Damage to the frame or drive train, occurred in connection with the theft of the entire vehicle, or to the suspension (other than wheel balancing or alignment) of the vehicle are material and must be disclosed. § 1112.1(B)(2)-(4).



Dealerships that fail to disclose material damages to the vehicle may be liable for the cost of the repairs. In some instances, dealerships may also be liable for paying punitive damages. In Sides v. John Cordes, Inc., the plaintiffs were awarded actual and punitive damages by the trial court. 1999 OK 36 ¶ 2, 981 P.2d 301, 303. The plaintiffs bought a vehicle from the defendant dealership believing the vehicle was new. However, the dealership did not disclose that the vehicle sustained damages during a storm and needed repairs. Id. The plaintiffs sued the dealership for fraud and gross negligence. Id. at ¶ 3. The Oklahoma Supreme Court affirmed the trial court's decision in favor of the plaintiffs and the $4,525.00 award in actual damages and $45,250.00 in punitive damages. Id. at ¶¶ 4, 19, 918 P.2d at 303, 307.


However, if the dealership gives the buyer a written disclosure or the damages don’t meet the value requirements, then buyer might be out of luck. Most contracts for used vehicles have an “As-Is” clause and disclaim any warranties. As-is clauses mean that the buyer is accepts the vehicle in whatever condition it's in at the time of the sale regardless of whether the buyer knows about a defect. As-Is provisions must be clearly and expressly written in the contract. Further an As-Is clause will not protect the dealership from any fraudulent misrepresentations or knowingly hiding vehicle defects from the buyer. As-Is clauses also don't protect dealerships from defects that the buyer could not have found after a reasonable inspection. One way buyers can protect themselves is by having a mechanic inspect the vehicle before the buyer takes delivery. Buyers should talk to a lawyer about their options if a defect is discovered.

What if there’s No Written Contract?


Licensed used vehicle dealerships must have a written contract that's received pre-approved by the Commission. OAC 765:10-3-1(a), (c). Wholesale dealerships are required to maintain copies of all records for at least three (3) years after the sale. OAC 765:20-3-1. Buyers can obtain a copy of these documents by submitting a complaint to the Commission.


Generally, a dealership cannot enforce a contract against a consumer unless it's put into writing. See Okla. Stat. tit. 12A, § 2-201. While Oklahoma does recognize verbal contracts, special rules apply for transactions that involve “goods,” that cost more $500.00 or more. See Okla. Stat. tit. 15, § 134; Okla. Stat. tit. 12A § 2-201(1). However, there are exceptions. Buyers should contact a lawyer to determine whether their contract is enforceable.



When can a Buyer Rescind a Purchase Agreement?


There's a laundry list occasions when a buyer might be able to rescind a purchase agreement. The best way to find out if rescission is available is by talking with a lawyer. However, the regulations do allow buyers to cancel their purchase if (1) the dealership conditions the sale on the buyer obtaining financing; and (2) the sale is not completed within fifteen (15) after the buyer takes delivery of the vehicle. The dealership may also receive a $100.00 fine.



Takeaways

  • Dealerships have up to thirty (30) days to transfer title of the vehicle to the buyer.

  • Buyers who haven't received the title to their vehicle after thirty (30) days should submit a complaint to the Commission.

  • Dealerships must give buyers a written disclosure of any "material damage" to the vehicle and disclosure whether the damages were subsequently repaired.

  • Dealerships may be liable for the cost of repairs and punitive damages for failing to disclose material damages.

  • An agreement to purchase a vehicle might be unenforceable if it isn't in writing.

  • Sales conditioned on the buyer receiving financing for the purchase may be rescinded if the dealership fails to complete the sale within fifteen (15) after the buyer takes delivery.


Need More Help?

Many legal problems depend each individual's facts and circumstances. At Martuch Law, our experienced attorneys will examine your situation and assess the relevant law. Martuch Law offers free consultations and case assessments with no obligation. We also offer Limited Scope & Unbundled Services to help clients reduce their overall legal expenses.


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