Auto Financing Fraud

The Buyer Does Not Have to Beware

The market for new and used cars can be a treacherous one, even for the most well prepared consumers.  The sheer number of forms and documents connected with the average vehicle transaction can be daunting, and can open the door to a host of unscrupulous, if not outright illegal, business practices.

At Norris Law Firm, PLLC, we help clients who have become unwitting victims of auto financing fraud.  Our firm advocates for consumers who have been taken advantage of by a one-sided or unconscionable car deal.  If you have been the target of auto financing or other dealer fraud abuse, you may have the right to seek various remedies — including a rescission of your sales contract and full refund or compensatory or statutorily imposed damages.

A Brief Guide to Auto Financing Fraud

Not all frauds are so easy to uncover, and simply sorting through the true nature of your sales transaction and can be difficult.  Listed here are some common frauds that affect the buyers of new and used vehicles:

  • Spot Delivery Sales (also called conditional delivery) –  This occurs when the dealer lets the buyer take the vehicle before the dealer is able to fully sell or assign the retail installment sales contract to a third-party lender.  North Carolina law specifically governs how such a transaction can occur, and dealership’s often break this law in the course of finalizing a deal.  If you have been contacted by a dealership and told you must return to “sign new paperwork” because the “financing fell through”, then you may have legal rights that need to be protected.  contact ustoday to find out more.
  • Hidden Interest Rates – Some smaller car dealerships, such as “buy here pay here” lots, will sell consumers a vehicle on a retail installment sale, requiring the consumers to make weekly, bi-monthly, or monthly payments with “no interest”.  This is invariably misleading at best and an outright lie at worst.  The dealerships will, in fact, increase the price of the vehicle substantially above its true market value to offset the risk involved in the retail installment sale.  The statement that the vehicle is being sold on a ‘no interest’ basis is untrue because the interest is built into the price of the vehicle.  The true interest charges on such sales can be astronomical, and almost always violate usury laws as well as other federal laws.
  • Negative equity – When a car dealer does not disclose to the buyer that his or her trade-in is worth less than the amount owed on the car, the purchaser may be the victim of negative equity fraud.  In such instances, the dealer may fold the difference into the purchase price of the car without telling the customer.  Many times this occurs where the prices of the vehicles in the dealer’s inventory are not disclosed on the vehicle or in any advertisement, requiring the customers to ask the salesperson the price of the car.  This allows the dealer to vary the vehicle price depending on who the purchaser is and what he or she brings to the table.

This list is by no means exhausted and, along with other types of sales fraud, such as false advertising or bait and switch sales, cost consumers millions of dollars every year (or rather, reap millions of dollars for car dealerships).  At Norris Law Firm, PLLC, we advocate for consumers to level the playing field.

Learn How our Law Firm Can Assist You

To discuss your situation and learn how we can help you, contact us.  Call 919-981-4475 for a free initial consultation to learn whether you have been a victim of financing fraud.

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Office Location

1033 Bullard Court, Suite 207
Raleigh, NC 27615
Phone:  (919) 981-447
Fax:  (919) 926-1676
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