17 Reasons to Sue a Car Dealership & How

Buying a car should be an exciting experience, but sometimes it becomes a nightmare.

Car dealerships can engage in unethical or illegal practices, leaving buyers feeling cheated and frustrated. When this happens, legal action might be your best recourse.

Let’s explore 17 compelling reasons to sue a car dealership and how the claims process works.

1. Dealership Misrepresentation and Fraud

Car dealerships sometimes lure customers with attractive offers that don’t exist when they arrive.

Bait-and-switch Tactics

Dealerships might advertise a vehicle at an unbeatable price, only to claim it’s “just been sold” when you show up. Then, they try to push you toward a more expensive model.

This practice, known as bait-and-switch, is prohibited under Mississippi’s consumer protection statutes.

To protect yourself:

• Screenshot or save any online advertisements.
• Bring printed copies of ads to the dealership.
• Get all promises in writing before signing anything.

A skilled consumer protection attorney can help you build a strong case against deceptive dealership practices and seek fair compensation for your losses.

2. Odometer Tampering and Undisclosed Vehicle Damage

Some unethical dealers roll back odometers to make cars appear less used than they are. Others fail to disclose significant damage or accidents in a vehicle’s history. Both practices are forms of fraud that can lead to lawsuits.

Red flags to watch for:

• Wear and tear that doesn’t match the mileage.
• Inconsistencies in maintenance records.
• Carfax or similar reports that show gaps or discrepancies.

3. “Lemon Law” Violations – Selling Defective Vehicles

Mississippi’s lemon laws protect consumers who purchase new vehicles with serious defects. If a dealer knowingly sells a car in bad faith and without proper disclosure, you may have grounds for legal action.

A vehicle might qualify as a lemon if:

• It has a substantial defect covered by warranty.
• The problem persists after a reasonable number of repair attempts.
• The new car is out of service for 15 or more days due to repairs.

4. Breach of Warranty

When you purchase a car, it comes with certain written and implied warranties.

You may have grounds for a lawsuit if a dealership refuses to honor these warranties or makes it unreasonably difficult to cover repairs.

Improper Warranty Repairs or Refusal to Fix Issues

Sometimes, dealerships perform negligent warranty work or refuse to address problems that it should cover.

This situation leaves you with ongoing issues and potentially unsafe driving conditions.

5. Unfair and Deceptive Financing Practices

Some dealerships receive higher profits by sneaking unnecessary fees into the sales contract.

Hidden or illegal fees added to contracts

These expenses might include:

• Excessive documentation fees.
• Undisclosed processing charges.
• Bogus “preparation” fees.

Always review your contract carefully and question any charges you don’t understand.

6. Discriminatory or Predatory Lending Practices

Federal and Mississippi laws prohibit discriminatory lending practices based on race, gender, age, or other protected characteristics.

If you believe a dealer has targeted you for unfair loan terms based on protected characteristics, you may have a case against the dealership.

7. Contract Disputes and Delivery Issues

When you sign a contract for a new car, you expect prompt delivery. However, some dealerships fail to meet their obligations, leading to frustrating delays and potential legal issues.

Failure to Deliver the Vehicle as Promised

You eagerly await your new car after signing the purchase agreement and perhaps making a down payment.

However, the dealership didn’t follow through with delivery, claiming:

• Vehicle is still in transit.
• It’s waiting on final inspections or detailing.
• A delay with paperwork processing.

False Reasons for Delay

While short delays can happen, excessive or unreasonable holdups may indicate a problem.

Dealerships might use delay tactics when:

1. Selling a car they don’t have in stock.
2. They hope you’ll accept a different, less desirable vehicle.
3. Trying to pressure you into accepting different terms or additional fees.

Remember, once you’ve signed a contract, the dealership must deliver the vehicle as agreed. Excessive delays without valid reasons can constitute a breach of contract.

In extreme cases, you may need to take legal action seeking consequential damages or the benefit of the bargain in restitution.

8. Changing Prices or Terms After Signing Contract

Once you’ve signed a vehicle purchase agreement, the dealership is legally bound to honor those terms.

However, some dealers may attempt to alter the agreement after the fact, claiming there was a “mistake” in the paperwork, the manager “didn’t approve the deal,” or “your financing fell through.”

Stand firm in the situation, review your contract carefully for any clauses about changes or cancellations, and document all communications with the dealership.

Signed agreements are legally binding, and dealerships cannot unilaterally change their terms without your consent.

9. Refusing to Cancel the Sale or Return Deposit

Your sales agreement may offer you the right to cancel a car purchase within a specific timeframe.

Unlike other states, Mississippi has no “cooling-off period,” giving consumers the right to cancel a car purchase. So, parties must write these terms into the contract.

However, if a cooling-off period exists and the dealership refuses to honor it, the business would be breaching the terms of the agreement.

Deposit Refunds

Similarly, if you paid a deposit and the deal falls through, the car dealer should return your deposit.

Some dealerships may try to keep your money by claiming it’s “non-refundable” or that you’ve forfeited it by canceling.

However, these claims are only sometimes legally valid.

Always send a written cancellation notice within the allowed timeframe and demand the return of your deposit. If the dealership refuses, consider consulting with a consumer protection attorney.

10. Negligence and Improper Care

When you entrust your vehicle to a dealership for service, test drives, or storage, they have a duty of care to protect it from damage.

Accidents during test drives, theft of personal items, improper storage or handling, or service-related incidents are all grounds for bringing a negligence claim against the dealership.

• Report issues to management immediately.
• Get repair estimates from independent mechanics.
• Consider filing a claim with the dealership’s insurance.

Remember, dealerships are legally obligated to exercise reasonable care with your property.

11. Improper Inspection or Nondisclosure

Dealerships, particularly those selling used cars, have a legal and ethical obligation to perform reasonable inspections of the vehicles they sell and disclose any significant issues they discover.

Some businesses may try to cut corners by skipping thorough inspections, hiding known issues, or misrepresenting the vehicle’s condition or history.

To protect yourself, always get an independent inspection before purchasing a used car and carefully review the vehicle history report.

If you discover undisclosed issues after purchase, document the problems thoroughly and notify the dealership in writing.

Give them a chance to rectify the situation, but consider legal action if they refuse to take responsibility.

12. Title and Registration Problems

Dealerships are responsible for handling title and registration paperwork efficiently and accurately.

Delayed or incorrect paperwork can lead to the inability to drive the vehicle legally, difficulties obtaining insurance, and problems selling or trading in the car later.

If you’re experiencing title or registration delays, contact the dealership in writing, demanding immediate action.

Check with your state’s DMV to verify if the business has submitted paperwork, and consider filing a complaint if delays persist.

13. Not Paying Off Previous Liens

When you trade in a vehicle with an outstanding loan, the dealership typically agrees to pay off that loan as part of the deal.

If they fail to do so, you could end up responsible for two car payments and face credit score damage.

Contact your previous lender to verify the loan status and notify the dealership in writing, demanding immediate action if you suspect the dealership hasn’t paid off your trade-in.

14. Violating the Truth in Lending Act

The Truth in Lending Act (TILA), codified under 15 U.S.C. 1601 et seq and 12 CFR 226, requires dealerships to provide clear and accurate information about financing terms.

Violations might include:

• Understating the annual percentage rate (APR).
• Failing to disclose all finance charges.
• Misrepresenting the total cost of the loan.

If you spot these discrepancies, document them carefully. They could form the basis of a TILA lawsuit.

15. Spot Delivery Scams and Yo-Yo Financing

In a spot delivery scam, the dealership lets you drive off with the car before finalizing financing. Later, it calls you back, claiming the original terms fell through.

They pressure you to sign a new contract with worse terms, often threatening repossession if you refuse.

This practice is fraud in Mississippi. Contact a consumer protection lawyer immediately if you fall victim to a yo-yo financing scheme.

16. Failure to Disclose Prior Rental or Fleet Use

Some dealerships try to pass off former rental or fleet vehicles as personally used cars.

This situation matters because:

• Rental cars often experience more demanding use.
• Fleet vehicles may have higher mileage.
• Factors affect the car’s value and reliability.

Dealerships must disclose a vehicle’s history, including rental or fleet use. Failure to do so is grounds for legal action.

17. Violating the Used Car Rule

The Federal Trade Commission’s Used Car Rule requires dealers to provide a “Buyers Guide” for every used car they sell.

This guide must include:

• Whether the car is sold “as is” or with a warranty.
• The percentage of repair costs the dealer will cover under warranty.
• A list of the car’s major mechanical and electrical systems.

If a dealership fails to provide this guide or misrepresents its information, it violates federal law.

Taking Legal Action Against a Car Dealership

If you are in any of these seventeen situations, you should take the following action.

1. Gather evidence: Collect all relevant documents, including contracts, advertisements, communications, and repair records.
2. File a complaint: Report the issue to the Mississippi Consumer Protection Division or Better Business Bureau.
3. Consider mediation: Some parties resolve their disputes through third-party mediation, which is often faster and cheaper than a lawsuit.
4. Consult an attorney: An experienced Mississippi consumer protection law firm can assess your case and advise on the best course of action.

Filing a Lawsuit in Mississippi

Suing a car dealership involves several steps:

1. File a complaint: Your attorney will draft and file a formal complaint outlining your allegations against the dealership.
2. Discovery phase: Both sides exchange information and evidence related to the case.
3. Negotiations: Many cases settle out of court during this phase.
4. Trial: If a settlement isn’t reached, your case will go to trial, where a judge or jury will decide the outcome.

Throughout this process, be prepared to provide detailed documentation and testify about your experience.

Statute of Limitations for Car Dealership Lawsuits

In Mississippi, the statute of limitations for most car dealership-related lawsuits is:

• Six years for some breach of written contracts or warranty claims.
• Three years for fraud claims and some written contracts or warranty claims..
• Three years for personal injury (negligence).

However, these timeframes can vary depending on the specific nature of your claim.
Always consult with a consumer protection law firm as soon as possible to guarantee you don’t miss deadlines.

Protect Your Consumer Rights With Knowledge

Understanding your car buyer rights is your first defense against dealership fraud and misconduct.

From false advertising to financing scams, the 17 reasons we’ve explored highlight the importance of staying vigilant throughout car buying.

Ready to Take the Next Step?

If you believe you’ve been a victim of car dealership misconduct in Mississippi, schedule a FREE case evaluation with the Ware Law Firm to discuss your situation and learn about your legal options.

Our experienced consumer protection lawyers will guide and represent you while you protect your rights and seek justice.