Can a car dealer be liable for selling a flood damaged car?
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Can a car dealer be liable for selling a flood damaged car?
My husband and I bought a car about a month ago from a dealer with good reviews. We got the car for a good deal but like three days after the check engine light turned on. I started to get suspicious of the car thinking that it was salvage since it had a weird smell and yesterday I noticed that under the driver’s seat the metal it’s starting to rust. I couldn’t contact the seller today because it’s labor day but I want to be prepared when I go in to talk to him.
Asked on September 5, 2016 under General Practice, Colorado
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
The dealer is liable, on the basis of fraud, if the dealer knew, or reasonably must have known (that is, any dealer in its circumstances logically must have known) of the flood damage; in the dealer knew of the flooding but didn't disclose it, that misrepresenation or lie constitutes fraud, which could give you grounds to potentially rescind the contract (return car, get money back) or at least get monetary compensation (e.g. the difference between what you paid and the lesser value of a flood-damaged car). The key is, though, the dealer must have known: if the dealer legitimately did not know, then they are not liable, because in that case, they did nothing wrong.
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