June 18, 2019

Can a dealer sell a car as "new" if it was used as a rental?

Dear Consumer Ed: 

I purchased a brand new car in 2018. In cleaning out my car I found a rental agreement indicating that my car was used as a rental car for the dealership.  When I purchased the car it had about 400 miles on it. The vehicle was sold to me as "new," and the dealer never disclosed that the dealership had used it as a rental or for any other purpose. Is that legal?

Consumer Ed says:

In Georgia, a “new” motor vehicle is generally one that has never been previously titled or sold at retail to anyone other than a new motor vehicle dealer. From your description, it sounds like the dealership may have used the vehicle as a loaner or rental vehicle for customers, perhaps while their vehicles were being serviced or for other short periods of time.  However, there is no clear indication that the dealer ever titled or sold the vehicle to any consumer as part of those prior uses. 

Even though the vehicle you purchased appears to meet Georgia’s legal definition of “new,” dealers are not allowed to misrepresent the actual condition of the vehicle. For instance, it is generally presumed in Georgia that new vehicles have not been used to a significant extent. There are limited circumstances in which a dealer’s failure to disclose the extent that a new vehicle has been driven might be problematic, but since determining this would require a very fact-specific inquiry, it is something you would need to discuss with a private attorney.

For future purchases, bear in mind the following:

  • When you purchase a new car that has been driven extensively before being sold at retail, you may have increased bargaining power. So, when you are shopping for a new car, pay special attention to the odometer disclosure. Before you sign a sales contract, note the number of miles already on the car to help you decide whether you're willing to pay the purchase price.
  • You may also want to ask the dealer to provide an extended warranty as a concession, since the manufacturer's warranty isn't extended when the vehicle has been driven by the dealer before retail sale. You should also ask how the car was used (i.e., whether the car was driven as a demo vehicle by a salesperson, used by a family member of the dealer, or whether it was driven by many different people) to help you decide if you want to buy the car, and at what price. 

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

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