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Attorney Jim Harrison

Dealers Can Hide Some Damage Repairs to New Cars

James R. Harrison

March 9, 2012

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New car sales are on the rise. This upswing in the market follows several years of flat or declining sales.

If you are considering a new car purchase, you should know about an Arizona law that gives you limited protection against a dealer practice that is more common than you might have thought.

New cars generally must be shipped great distances from the manufacturing plant to a dealer location. In some cases, these journeys include ocean voyages. Custom equipped railroad cars and trucks can be loaded with automobiles stacked at angles.

Unlike other reasonably fragile consumer products, such as televisions, refrigerators or lamps, new cars are not surrounded by packing material to prevent accident damage in transit.

Because of these methods, some cars are damaged by accident during shipment to the dealer. Others are damaged while on the dealer’s lot. It is not uncommon for dealers to repair accident damage on a new car and conceal this fact from prospective buyers. To a degree, this practice is legal in Arizona.

If the cost of repair does not exceed 3 percent of the manufacturer’s suggested retail price of the car, Arizona law does not require the dealer to inform a buyer of the damage or the steps taken to correct it. The law requires that repair costs be measured by the warranty rate for labor and parts.

For example, if repair costs on a $30,000 automobile do not exceed $900, no disclosure is required. Furthermore, dealers are not required to tell buyers about any damage to glass, tires or bumpers if these parts were replaced with comparable equipment.

More severe damage to a new car must be disclosed in writing. A dealer’s failure to do so gives the buyer a right to sue for damages.

Justice of the Peace Courts and their Small Claims Divisions can be used for this purpose. Although a lawyer is not required, you should consult one if the dealer will not informally resolve the matter to your satisfaction.

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