- Office of Consumer Affairs and Business Regulation
When selling or trading in a car to a dealership, it is important to remember that both the dealership and the consumer have certain rights and responsibilities.
If you are trading in a car for a different one, make sure to read and sign the purchase documents which should be titled Motor Vehicle Purchase Contract. Make sure the Vehicle Identification Number (VIN) on the document matches the VIN of car that you picked out. The VIN is most commonly on the dashboard (visible through the windshield) and on the driver’s side door jamb. In some vehicles, the VIN may also be on the engine or hood. Also, check the paperwork for any hidden fees such as doc fees or a VSI fee and make sure the price of the car is the same as the price you agreed to.
Some consumers may have a loan on the vehicle they are trading in or selling to the dealer. Always contact your lender to make sure you are taking all of the proper steps, including clearing the title of any encumbrances. Some dealerships offer the financing themselves, known as Buy Here Pay Here, instead of working with external finance companies. Regardless of who the lender is, never accept any dealer’s verbal promise to take care of everything once you hand them the keys! You are still responsible for that loan and may face any number of negative financial consequences if you do not make sure it is properly paid.
Some consumers have been unpleasantly surprised, years after they thought they were no longer responsible for the car, to find that the vehicle was reported as repossessed, or not reported as being paid at all. You can check your credit report once a year at no cost to make sure the loan has been reported as paid. The Consumer Financial Protection Bureau has more information about credit scores and how to obtain reports.
It is crucial to keep a copy of every single document you sign and read them carefully! You may need these for any number of scenarios including utilizing your rights under the state Lemon Laws. And be sure that if you sign for anything electronically, you read what you are signing, check the VIN matches throughout the document and double check your paper copy, which the dealer is required to provide you with, matches the document you signed electronically.
It’s equally important to read every document you sign when you are purchasing a vehicle. The Federal Trade Commission recently charged a group of four auto dealers operating in Arizona and New Mexico, with performing illegal activities, such as falsifying consumers’ income and down payment information on vehicle financing applications and misrepresenting important financial terms in vehicle advertisements. The FTC additionally advises that you review the final financing application that you are about to sign and be sure it correctly lists your income, how much you paid upfront, and other personal information. Double check that the total price and the financing are what you agreed to. You don’t want to end paying more than you are able.
If you feel that the business has done something unfair or deceptive, you may have recourse. The Attorney General’s Motor Vehicle Regulations details sales requirements among other guidelines. Consumers may also pursue action under the Massachusetts Consumer Protection Law or small claims court. For claims greater than $7000, you may wish to hire an attorney.
