- Office of Consumer Affairs and Business Regulation
It is becoming increasingly common for dealerships and private sellers to advertise their cars through a website, through an app, or through social media. Because different laws may apply depending on the details of each listing, the Office of Consumer Affairs and Business Regulation seeks to educate consumers about their rights and responsibilities when buying a car online.
Some cars are listed though an individual or through a business that functions as a type of brokerage. The individual/business never actually owns the car; they take a commission for listing someone else’s car for sale. This is not necessarily illegal, but consumers should be alert for potential scams and pitfalls. Used car dealers must obtain a Class II license from their municipality, and may only sell vehicles at the address on their license (540 CMR 18 (2) (a)). It is illegal for a licensed dealership to pay someone to pose as the owner of the car. This is known as curbstoning.
Consumers should always check who is listed on the purchase documents. Dealerships are required by law to include certain information on the purchase documents, called a Motor Vehicle Purchase Contract (AG Motor Vehicle Regulations 940 CMR 5.04). Even if the dealership does not use the proper format, the consumer is still allowed to use the purchase documents to demonstrate that the dealership, and not the individual who posted the vehicle for sale, was the owner of the car. Consumers who then have problems with the car may be protected under the Used Vehicle Lemon Law. If a consumer has a problem with the transaction, but not the car itself, the consumer can treat the brokerage as a business, even if the brokerage is only one individual, for purposes of filing suit under the Consumer Protection Act, Chapter 93A and/or Small Claims Court.
Private sellers who list their own cars for sale might choose to use an app to connect them to potential buyers. These sellers are still responsible for their car under the Used Vehicle Lemon Law and the Failed Inspection Law, and are also required to include certain information on the Bill of Sale. In general, the app is not responsible for problems with the transactions as they simply connect the buyer and seller. It is important to read the Terms and Conditions of any app, or social media such as Facebook, before buying or selling a car using these methods.
Buyer beware: Some motor vehicle auctions which are not open to the public may choose to market their vehicles directly to consumers. For example, they may list cars on their website and direct potential buyers to a list of out-of-state brokers who will buy the vehicle on the consumer’s behalf. Consumers may be enticed by low prices but this kind of transaction is extremely risky. Consumers lose their Lemon Law rights since neither the auction nor the broker is considered the selling dealer. If the car has mechanical or other problems, it may be difficult to find recourse.
