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Brand New Car Issues: Your New Car May Not Be as New as You Think

A woman holding car keys while entering a car and smiling at a car dealer that illustrates how new cars might not be as brand-new as you think

If you’re forking over $30,000 for a new car, it’s important to consider matters related to auto insurance. Also, you expect it to be as fresh as it was when it first rolled off the factory line. After all, that’s your hard-earned money. Not to burst your bubble, but that may be wishful thinking.

While manufacturers make every attempt to get their new cars to potential buyers in perfect condition, there are far too many unpredictable opportunities along the way to promise perfection, including the delivery route from ship containers to auto carriers. The fact is your new car may have been damaged in transit or on the dealer lot and, as is often the case, the dealership is under no obligation to provide you with information of any fixes that were performed on your new ride. If it was their fault, they should repair it.

What Does Damage on a New Car Look Like?

Common problems include scratches, dings, and sometimes more extensive damage can describe brand new car issues. Cars are usually shipped by over-the-road transport trailers if sold within the U.S., but if they arrive from overseas, they travel by transport vessel to reach their destination. Once the vehicle arrives, it can be moved along the port to a waiting truck to be taken to a dealership several hundred miles away.

The more times the vehicle is loaded and unloaded, the more vulnerable it is to damage. If minor visible damage is noticed, the vehicle is often pulled aside and fixed before being sent on to the dealership. But, the risk of additional damage doesn’t stop there. After the dealer takes delivery, it can face further damage by simply moving it around the lot or from other vehicles being moved or test driven around it.

If the vehicle sustains damage on the dealer lot, it will likely be fixed and can be sold as new, unbeknownst to the buyer, which could be you.

Wait. A Dealership Can Sell Me a Damaged Vehicle Without Telling Me?

If the amount of the vehicle’s problems fall below a certain threshold, the dealership you purchase the car from is not required to disclose this information to you. California, known for being a consumer-friendly state, sets the threshold at only three percent, while most other states have set their thresholds from three to six percent of the vehicle’s MSRP as the amount requiring disclosure to the purchaser.

North Carolina state law requires car dealers to disclose damage on new cars that exceeds five percent of the MSRP, but are not obligated to report damage to glass, tires or bumpers, if the items are replaced with original-equipment parts.

Therefore, a vehicle with an MSRP of $28,138 can have up to $1,400 in corrections done to it and the dealer doesn’t have to disclose it to you. While reputable dealers are more likely to disclose damage that may be serious, many others will not and will simply sell the vehicle without any warning whatsoever.

How Can I Make Sure My New Car Was Not Damaged?

Expectations aside, you need to protect yourself by carefully inspecting your new car from top to bottom. Check the paint for:

  • Visible signs of buffing
  • Discoloration or mismatched color
  • Mismatched pigment, if metallic

Inspect the doors, hood, trunk lid, and bumpers for signs of touch-ups, repair or replacement. Don’t be afraid to ask the dealer for information about repairs of any kind, including to the engine or transmission have been completed due to some fault. In fact, some states actually require the dealer to respond truthfully and disclose these, regardless of the amount, if the customer asks.

So, if you’re about to spend your money on something you believe to be perfect, pose the question. You never know what the car dealer will volunteer.

Research Your Vehicle Choice in Advance

Even though damage can happen to any make or model prior to purchase, some vehicles may lend themselves more to engine trouble and more time in a repair shop than others. There are numerous places you can check to find out how your choice stacks up and which cars have a tendency to brand new car issues. For example, JD Power is an established company with more than 50 years of experience providing insight into brands and products. JD Power can provide stats including problems with new vehicles, as well as those with satisfactory quality as reviewed by other owners like you.

Hispanic couple checks for brand new car issues at the dealership

What are Lemon Laws?

Lemon laws pertain to cars that appear to have defects beyond fixing. Most states have some form of a lemon law to protect consumers. Lemon laws typically apply to a new vehicle. If you believe the new ride you just laid out money for has faults beyond repair, here are the approximate standards you must establish in order to have you vehicle qualify as a lemon car. Each state has its own rules and process.

  • The problem must have happened within a certain number of miles driven. The troublesome vehicle should still be under warranty coverage.
  • Defects must be categorized as major problems that include engine trouble, automatic transmission, faulty steering, brakes or, in some states, significant minor issues.
  • The car dealer or manufacturer has had the opportunity to have a mechanic or repair shop attempt to fix the issue. States set different numbers of times for repair attempts, usually four, although if the defect is a safety-related issue that number could be as low as a one-time attempt.

If your lemon law challenge is successful, you can expect a full refund of your money. In addition to a full refund, if the car dealer challenged you in a court of law, your legal expenses may be covered.

California’s Lemon Law

California has its own law for brand new car issues. Under California’s lemon law claim, you may have a lemon if within 18,000 miles or 18 months:

  • There have been at least two attempts at repair work by the manufacturer on a warranty coverage problem that could cause serious injury or death
  • The automobile or truck has been out of service for 30 or more days due to a warranty coverage issue

Under California’s lemon law, you must show that the damage or defect was not caused by the owner’s abuse. If you have a true lemon, you are entitled to a full refund or a replacement.

Federal Consumer Protection

Consumers of products in the U.S. have legal rights under certain legislation and consumer rights acts, including the Magnusson-Moss Warranty Act. This law applies to any product that costs more than $25 and comes with a written warranty. Besides having terms specific to warranty coverage, this law also provides attorney’s fee coverage for consumers in a lawsuit.

If you have a complaint about a dealer, states have a protection agency or you can contact the Federal Trade Commission. In the UK, people have access to the Consumer Rights Act of 2015 for protection. The Consumer Rights Act replaced three other laws in the UK: the Sales of Goods Act, Unfair Terms in Consumer Contracts Regulations and the Supply of Goods and Services Act.

Talk to Your Finance Company

It’s important to keep your finance company in the loop. You’ll be expected to continue making payments throughout the process – if you don’t, you could face a repossession and lose all rights under lemon laws. If you want to be proactive, ask your finance company how they handle these types of circumstances.

Make Sure You Don’t Have Brand New Car Issues

Purchasers can help avoid problems in several ways, including purchasing an extended warranty. An extended warranty, or a service contract, typically begins when the manufacturer’s warranty coverage ends, although the two may overlap. An extended warranty covers the cost of a visit to a mechanic or repair shop for corrections or maintenance.

There are different types of service contracts, including powertrain, component and specialty coverages. It all depends on how much money you have to spend.

Always be prepared to hire an attorney who will fight for your legal rights if you find yourself up against a stubborn dealership or manufacturer with a claim.

What’s are My Options with Used Cars?

Unfortunately, they don’t have the same protection as new ones unless they are still under warranty, but don’t despair. A faulty used car may have some remedies and you may have recourse against a private seller.

Sellers, including private sellers, are required to disclose accident history. Depending on the year of the auto, this could be crucial since newer models are able to withstand a crash much better than ones built in a long-ago previous year (or decades). When spending your hard-earned money on a used car, it’s a good idea to always inspect the service records from the seller. Ensure your choice has records that show an odometer reading that closely matches the one you see on the dash.

If there are issues after you purchase, first, approach the seller to give them an opportunity to make things right. If necessary, take it to a trusted mechanic or repair shop. They can usually tell if it suffered from major abuse from a previous owner. You may need this paper trail and information if you end up in court.

Get Affordable Auto Insurance Online Today

It’s also important to ask questions when shopping for the best auto insurance rates available. Know what you’re paying for before you buy. Freeway Insurance offers all types of insurance for your budget. Get a free car insurance quote online, give us a call at 800-777-5620 or visit us at one of our convenient locations.

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