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Experienced California Lemon Law Attorneys Serving Los Angeles County

Blasser Law specializes in consumer fraud issues regarding the sale of automobiles to the general public. We have experience successfully representing automobile consumers/buyers, automobile dealerships, and lenders. This puts us in a unique position to see all sides of a particular transaction and effectively represent our clients.

While each case is unique, there are some routine scams which plague consumers all too often. This is an unfortunate fact of life when buying a car. The list below explains some of the scams consumers unfortunately face on a fairly regular basis.

Negative Equity/Over-Allowance

This arises in transactions where the customer has a trade-in vehicle to use towards his or her down payment. The customer is typically led to believe the dealership is valuing the trade-in vehicle at the same amount he/she currently owes towards it. This creates the illusion the consumer does not owe anything towards the trade-in vehicle as part of the transaction. In truth, however, the actual cash value paid towards the trade-in vehicle is less than the credit or lease balance owing, and the dealership adds the difference to the cash price of the new or used vehicle the consumer is purchasing. This practice is illegal even if the customer knows and agrees to it.

Payment Packing

Payment packing typically begins when a dealership presents the customer with a monthly payment that is inflated. Once the dealership convinces the customer to pay a monthly payment that is higher than necessary…that’s when things get interesting. The dealership usually will proceed to stuff the transaction with all sorts of extra products and accessories which fall within the inflated monthly payment. Often times the customer is not told these extra products and accessories are optional. Indeed, many consumers are misled by dealerships who tell them the extra products and accessories “come with” the vehicle for the price they are paying. Dealerships typically use this improper practice to dupe consumers into paying for products they otherwise would not purchase such as alarms, service contracts, GAP insurance, paint/fabric protection, etc.

Single Document Rule

The Automobile Sales Finance Act (“AFSA”) requires all of a transaction’s obligations to be set forth within one single document. Many dealerships simply ignore this requirement and instruct customers to sign additional documents, such as trade-in forms stating the customer agrees to pay any difference between the value of a trade-in and the prior credit or lease balance. Another example involves dealerships who accept trade-in vehicles but who then inaccurately disclose the trade in transaction as a “cash down payment.” Yet another common example is a “hold check agreement” stating the customer agrees to pay additional money towards a down payment at some later time. All of this violates the single document rule and may entitle you to rescind your transaction.

Rewritten Contracts & Backdating

Many customers do not qualify for financing under the terms of their first purchase contract and are subsequently asked to accept different contractual terms after driving off the dealership sales lot. This often results in the dealership asking the consumer to pay an additional down payment or accept a higher annual percentage rate to qualify for a loan. Assuming the consumer agrees to the revised terms, the dealership will have him/her execute a revised contract with the new terms but will “back date” the contract to coincide with the date the initial contract was signed. This forces the customer to pay finance charges for a time frame where the contract wasn’t yet in effect. In addition to misrepresenting when the customer takes the obligation of the new contract, “back dating” often violates the single document rule because another form, customarily referred to as a “Acknowledgement of Rewritten Contract,” has the true date concerning the contract’s signature. Moreover, many dealerships do not inform consumers they can opt to cancel the contract, return the vehicle and get a refund for any down payment and trade-in instead of signing a second contract with less favorable financing terms.

Hold Check Agreements & Deferred Down Payments

Often times consumers cannot afford to pay their entire down payment on the date of their purchase. When this comes up, sometimes dealerships permit consumers to defer a portion of their down payment to a later date. Although the vehicle code recognizes these deferred down payments, dealerships must accurately itemize their details (e.g., amounts being deferred and their corresponding due dates). Unfortunately many dealerships ignore this requirement and instruct consumers to write checks for the deferred portion of their down payments which they agree to refrain from cashing until some date in the future. Often times the dealership will even instruct its consumer to sign a separate agreement laying out the date it will cash each check along with additional provisions concerning checks which come back. This creates additional obligations that do not appear in the purchase agreement.

Language Barriers

If a dealership negotiates an automobile sale or lease primarily in Spanish, then it must provide a Spanish translation of the contract or lease to the Spanish speaking consumer prior to instructing him/her to sign an English language contract. The same rule applies to transactions primarily negotiated in Chinese, Vietnamese, Tagalog and Korean. Pursuant to Civil Code section 1632, a failure to comply with this requirement gives the customer the right to unilaterally rescind the transaction.

Used Vehicle Disclosures/Misrepresentation

Dealerships are required to disclose material known facts about a used vehicle, such as: whether it was involved in a prior accident causing substantial damage; whether the vehicle was a previously registered rental car; whether the vehicle was a prior lemon law buy back that was repurchased under the lemon law; and whether the vehicle has been subject to odometer tampering.
New Vehicles vs. Used Vehicles vs. Demonstrators & Unwinds. California law requires dealerships to disclose the vehicle as either “new” or “used.” Although the “used” designation applies to demonstrator vehicles (vehicles used by manufacturer or dealership representatives) and “unwinds” (vehicles previously sold but subsequently returned), these vehicles are often represented as “new” to customers. This violates California law and is improper.

Certified Used Vehicles

Many manufacturers and dealerships describe and advertise their used vehicles as “certified pre-owned.” They further claim that this status guarantees the vehicle is in good working order and free from major structural damage or problems. Notwithstanding this, many “certified pre-owned” vehicles are sold with serious structural damages and problems. The result is that the consumer is duped into paying a premium price for damaged goods.


When a lender requires new or additional terms to obtain financing and a consumer is unwilling to agree to those terms some unscrupulous dealerships will forge the consumer’s signature onto another contract to close the transaction and fund the deal. Other examples of forgeries include credit applications (where the dealership improperly inflates the consumer’s income) and disclosure forms relating to rental cars, prior frame damage or other important details that would make a consumer second guess his/her decision to purchase a vehicle.

Lemon Law

The Song-Beverly Consumer Warranty Act is commonly referred to as the Lemon Law. It provides protection for consumers leasing or purchasing new vehicles. If the manufacturer, its representative or authorized dealer is unable to service or repair a new motor vehicle to meet the terms of an express written warranty after a reasonable number of repair attempts, it must promptly replace the vehicle or return the purchase price to the consumer. The return of the purchase price must include any amounts for manufacturer-installed items and transportation. The choice to accept a replacement versus a refund is left entirely up to the consumer. The manufacturer must also generally pay for sales or use tax, license, registration, and other financial fees…as well as incidental damages the consumer incurs (e.g., repairs, towing costs, rental car expenses, etc.). It is important to note that purchasing a car “as is” does not void the buyer’s rights under applicable lemon laws and does not provide a selling dealership with a “get out of jail free” card for failing to disclose known defects. The lemon law is not limited to cars and there are provisions to cover RVs, boats, motorcycles, and even wheelchairs.

Buyer’s Guide

Dealerships must affix a Buyer’s Guide to any used vehicle it sells and you have a right to review it prior to your purchase.

If you feel cheated or believe the vehicle you purchased is a “lemon” please give us a call or send us an email. We can help.

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Diamond Bar, CA 91765




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