Wednesday, January 10, 2018

Used Car Buyer Watch List: “As-Is – No Warranty”

When you walk onto a used car lot, the prices can vary widely based on make, model, age, and warranty. It may be tempting to save money by taking the car labelled “as is – no warranty”. But doing so could cost you far more down the road.

The last blog posts have focused on the purchase agreements between new car buyers and the dealership. But used car buyers are wise to watch out for mandatory arbitration clauses and short claims periods as well. For used car buyers, “as-is” language can cut them off from important consumer protection laws. 

What Warranties Come with Used Cars?

Buying a used car doesn’t mean you are automatically on the hook for whatever problems may arise. In most cases, a used car comes with certain warranties:

Implied Warranty of Merchantability

Most goods sold come with an “implied warranty of merchantability”. In other words, when you buy a thing, the seller promises it will do what it is supposed to do. Cars, for example, will safely transport passengers over the road. If a defect exists at the time of sale that prevents the vehicle from doing what it was designed to do, the implied warranty of merchantability allows a used car buyer to hold the dealership accountable to make it right.

Implied Warranty of Fitness for a Particular Purpose

Sometimes, your conversations with the salesperson at a used car dealership can create an “implied warranty of fitness for a particular purpose”. If, for example, you and the dealer discuss buying a used truck to haul your horse trailer, but then the dealer sells you a vehicle that’s not up to the task, this implied warranty may allow you to bring it back and find something that better fits the bill.

Manufacturers’ Warranties

Some late-model used cars may still be covered by manufacturers’ warranties. These usually apply to a specific part (like the engine) and last for a set number of years or miles. If there is a problem with that part of the car, consumers can ask the manufacturer to fix it, often by bringing the vehicle back to the dealership for repairs.

What Happens When You Buy a Vehicle “As-Is – No Warranty”?

Often, the cheapest vehicles on the used car lot come “As Is – No Warranty”. This means that the dealer makes no promises about the condition of the vehicle, including its ability to safely function as a vehicle. 

Dealers are supposed to clearly mark when a vehicle will be sold “as is”, but sometimes less scrupulous dealerships will bury the “as is” language in the purchase agreement or buyer’s order. When that happens, a used car buyer could unknowingly sign away their right to have a car that behaves as intended, putting them on the hook for thousands of dollars of repairs later on. Because the purchase agreement and buyer's order control the terms of the sale, buyers may have trouble proving that the dealership didn’t give proper notice of the no-warranty condition to get their repair costs covered under the normal implied warranties.

What to Do If You See an “As-Is – No Warranty” Disclaimer

Before you sign a used car purchase agreement, look closely at the Buyer’s Guide and the contract for language indicating the car is sold as-is. Unlike some of the other watch list items, dealers probably won’t be willing to strike out this disclaimer to close the deal. If you see this language, stop, go back, and take a closer look at the vehicle:

  • Have an independent mechanic inspect the vehicle before you buy it. (You do have the right to do this!)
  • Ask for a maintenance and repair history on the vehicle.
  • Get a vehicle history report (e.g., Carfax Autocheck, NMVITIS).
  • Research the make and model for common complaints, lifespans, and repair needs.
  • Look for inconsistencies in age or wear that suggest tampering like odometer roll-backs.
  • Look for signs of accident or flood damage, like mismatched paint, over-spray, or a musty smell.

There can be some good reasons to buy a used car “As-Is – No Warranty”. But if you don’t go into the deal with all the necessary information it could leave you paying thousands of dollars more than the car is worth.

Dani K. Liblang is a lemon law lawyer at The Liblang Law Firm, PC, in Birmingham, Michigan. She helps new and used car buyers enforce warranties and recover for defective vehicles. If you bought a lemon, contact The Liblang Law Firm, PC, today for a free consultation.

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