Auto-related Issues

Auto Fraud

Any claim based on fraudulent vehicle sales begins with whether the vehicle was new or used when purchased. A new car purchase is protected by Kentucky’s lemon law, which offers protection for the lesser of the first 12,000 miles or first 12 months. Also, a new vehicle will have substantial manufacturer warranties to protect the buyer. But for used vehicle sales, Kentucky law is the wild west for dealers. This is because the Commonwealth is an “as-is” state.

“As is” is code for buyer beware. This means you have to protect your interest in one of the most complicated financial transactions that ordinary citizens and consumers will ever have to conduct on their own.

Protect Yourself

Here are some things you can do to protect yourself in a used-vehicle sale:

  • Have the vehicle inspected by a mechanic you trust.
  • Ask for a CarFax report and review it. A CarFax report may alert you to odometer and accident-related problems. A CarFax report may also give you the service history of the vehicle. Many dealers may want to provide you with other reports like AutoCheck, but these aren’t as good as comprehensive.
  • If you the benefit of time, order and review the title history for the vehicle and/or contact the prior owner. 

Ask questions and record or make contemporaneous notes of the answers. Thankfully, a dealer is not allowed to lie to you about the condition of vehicle before sale. Questions to ask include:

  • Has the vehicle been in a prior accident?
  • Does the vehicle have flood damage?
  • What repairs to the vehicle did you perform to get it ready for sale?
  • Are there any open recalls for the vehicle?
  • Who performed the repairs for any closed recalls for the vehicle?

Warranties and Service Contracts

The Buyer’s Guide on the vehicle’s window should note any unexpired manufacturer or dealer warranties for the vehicle. If these exist, you should make sure that you know all the details for any existing warranty: what does it cover? how long is the coverage good for? Keep copies of the warranty in your vehicle. The same with service contracts.

Service contracts are a profit center for vehicle sales. Usually, the issue of service contracts does not come up until you’re signing the final paperwork. And the conversation is like walking through the looking glass. You may have spent hours or even days and weeks being told what a great vehicle you’re buying and what great shape it’s in. Now at the wire, you get pushed with fear of examples of what could go wrong and the catastrophic cost of repairs. While a service contract may indeed be a valuable investment, you aren’t given any choice as to providers by the dealer. You have no way to negotiate price or evaluate the reliability of the service contract administrator. The best practice is to research independent providers of service contracts prior to negotiating a sale so that you can be armed with price and coverage to compare with whatever the dealer is offering you.

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Auto Deficiency Defense

Your car or truck has been repossessed. And you’ve been sued to collect the balance due on your loan. If the dealer gets a judgment against you, most likely your wages or bank account will be garnished to pay for a vehicle you no longer have. If this is you, you may be down, but you are not out.

We can help. We do more than just defend lawsuits to collect the balance of a vehicle loan, we look for grounds to bring counterclaims for violations of the law and your statutory rights. We fight back, using:

Under TILA, there is no statute of limitations for bringing a counterclaim to an auto-deficiency lawsuit for violations of TILA. Under such a counterclaim, you can recover damages up to the amount sought by the creditor, which could completely wipe out the debt. We will study your loan documents to look for violations of TILA that we can use and press to your advantage.

The KCPA can be a powerful tool to fight back against an auto-deficiency lawsuit. The KCPA is broadly written to cover the fertile minds of schemers and scammers who are always looking for new ways to cheat and steal from consumers. We will ask you questions and investigate the sale of the vehicle at issue to see if you too might have a claim under the KCPA.

Under Kentucky’s UCC, a secured creditor, like the creditor or car dealer suing you, has to dispose of the vehicle at issue in a commercially reasonable manner in order to recover a deficiency balance from you, i.e. collect a money judgment against you. And the creditor or dealer has the burden of proof on the issue. This makes the sale of the vehicle after repossession the most vulnerable element of the creditor’s or dealer’s lawsuit. This will be key to our counterattack to lawsuit filed against you.

Often, car financing documents include an arbitration clause. If so, this clause was put in place specifically to deny you your right in court and to prevent you from bringing or joining a class action, which often is the only meaningful legal avenues to get a creditor’s or dealer’s attention and make them pay for their violations of the law. But you can use the arbitration clause to force the creditor or dealer to dismiss the lawsuit against you and file the claim as an arbitration, which costs substantially more than filing a lawsuit. This move may get rid of the debt and negative information from your credit report all together or may give you considerable leverage in terms of settling the debt for less than the amount you were sued for.

Most likely, the creditor or dealer suing you to collect the auto-deficiency balance is also reporting the debt on your credit report. The credit information may be demonstrably wrong, which can be proven by the very documents that the creditor or dealer filed in the lawsuit against you. If so, we can set up a FCRA claim against the creditor or dealer.

The plaintiff suing you may have bought your defaulted loan for pennies on the dollar and is coming after you for the full amount claimed due. If so, the plaintiff could be subject to the FDCPA, which is a strict-liability statute. We are well versed in the FDCPA and, if it applies, can wield it as powerful tool in your favor.

Cost

You may be asking how much with this cost me? Or have already decided you cannot afford legal representation. Quality and dedicated representation may cost a lot less than you think. Depending on where you reside in the Commonwealth, we offer flat-fee rates ranging for $975 for representation through the summary judgment stage of litigation. This means we will file an answer to the complaint or moved to dismiss the complaint, serve discovery, answer discovery, file motions to compel arbitration—where appropriate, respond to motions for summary judgment, and file motions for summary judgment. We accept payment plans.

Also, if we can develop counterclaims or other claims on your behalf, we may be able to force the creditor or dealer suing you to pay our fees and costs. And in some cases, we may be able to recover damages and make them put into your pocket.

If you have been sued to collect a balance due and owing on a car or truck loan, please call, text, or email us today. The initial consultation is completely free.