Two men sitting at a desk, reviewing paperwork at an auto dealership

Fraud Claims Defense for Auto Dealerships

Auto dealerships can have much more complex legal cases when compared to other businesses. Due to the nature of an auto dealership, they have to deal with different types of people, vendors, lenders, manufacturers, all while adhering to city and state laws.

If you own or manage an auto dealership, ensuring your i’s are dotted, and your t’s are crossed every day and with every deal can be the difference between keeping your business or losing it. A prolonged, expensive legal dispute could cost you thousands of dollars and lost revenue.


A common reason for someone to start a fraud claim against your dealership is for misrepresentation. They may believe that you failed to disclose certain information about your business, their purchase, or otherwise. Deceptive trade practices could also fall under misstated facts, an error in pricing, or forgetting to disclose vehicle defects.

When purchasing a vehicle with your dealership, every buyer has their own bill of rights. These cover both used and new car sales. If your dealership fails to meet all of these requirements, you could be facing fraud claims. However, sometimes it’s not so simple as outright deception.

You may find that your employees or even yourself may not have purposefully forgotten to include an option to cancel to your buyer, or you may have accidentally given your buyer the wrong information or price on their vehicle. However, if that happens, the buyer is still covered by the bill of rights even if you made these mistakes in error.

Financing Regulations

In addition to misrepresentation claims, if you fail to follow federally regulated vehicle financing rules, your dealership may face additional penalties or claims. Many auto dealerships offer in-house financing options, and ensuring each of your employees fully understands the laws and regulations and adheres to them can be key to avoid legal issues down the road.

Not only does your financial department need to be aware of these regulations, but your sales department should also be aware of the repercussions for over or undervaluing vehicles and trade-ins. Ensuring you have no undisclosed fees and are transparent in all of your sales can help you stay away from any potential fraud claims as well.

How a Lawyer Can Help Your Auto Dealership

Understanding all of the ins and outs of auto dealership fraud and potential lawsuits can seem daunting, especially for a small business owner. Even for bigger dealerships, being unprepared or undereducated in all of the laws and regulations can have serious impacts on your business. Hiring a strong, experienced legal team and defense on your side to prepare you to avoid any disputes can help, and we can certainly assist in handling any fraud claims as they arise.

If you have questions and would like to speak to one of our lawyers today, please contact us. Our offices are open, and we’re looking forward to hearing from you.