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The risk of buying a used vehicle “AS IS” from a Virginia car dealership

Are you in the market for a used car in Virginia? Your inclination may be to rush through the transaction because you think you know what you want, or you may not want to prolong the shopping experience during COVID-19. However, it is smart to take time to review, understand and ask questions about the Buyers Guide.

The Buyers Guide is a standardized form federal law requires dealers (that sell at least six vehicles annually) to post on vehicles they are offering for sale. An important component of the Buyers Guide is the requirement that the dealer note whether it is selling the vehicle “AS IS” or with a warranty. This information is incorporated into the vehicle sales contract and in order for the dealer to disclaim (not be responsible for) any warranties, the buyer must sign an acknowledgment of an AS-IS status.

What does it mean to buy a vehicle “AS IS”?

“AS IS” is like “buyer beware” – meaning that the purchaser of the AS-IS vehicle assumes all risk that the car may need repair and will be responsible for that expense. The seller-dealer is essentially saying that they do not guaranty that the vehicle is defect- or damage-free, nor are they giving any warranty that they will make repairs or be responsible for repair or replacement costs.

Obviously, this brings potentially expensive risk to the buyer. To be safer in an AS-IS car transaction, the potential purchaser should have the vehicle inspected for damage or defect before purchase. Choose a third-party, reputable mechanic with no ties to the dealer and whom you trust. There are also companies that will perform a prepurchase inspection for a fee, and will stand behind their inspections.

What about warranties?

If a car is not sold in an AS-IS condition, there is an implied warranty that it operates as expected and that the seller-dealer will repair any damage that exists at the time of sale. This is the “warranty of merchantability.”  However, if a dealer sells the car “AS IS,” they are disclaiming that warranty and are not making any promises that the car works as expected, or even works at all.

Unlike implied warranties, a dealer cannot disclaim an express, written warranty. In other words, they cannot tell you, in writing, that the car has certain features or conditions, or that certain repairs will be made, and then take that written promise back in a form disclaimer. They can disclaim any future repair warranties or express warranties that were not written (i.e., during the sales presentation, the salesperson tells you that any problems with the car will be fixed, for example).

What about vehicle safety inspections?

Under Virginia law, a motor vehicle dealer must submit the vehicle for a Virginia Motor Vehicle Safety Inspection prior to selling it to you, and if it is not in a condition capable of passing the safety inspection, they must tell you all reasons why not. They cannot disclaim that obligation. When they put the “passed” safety inspection sticker on the car, they are giving you an express written warranty that the car was capable of passing the safety inspection and cannot disclaim that even if they have you sign an AS-IS disclosure.

Are there any other exceptions?

While a properly documented AS-IS sale will usually bar a claim for a defective vehicle, there are exceptions. If the dealer does not complete the paperwork properly, the sale may not truly be AS IS. A dealer can not lie to you or conceal defects and avoid a claim for fraud through an AS-IS disclaimer. A lawyer experienced in motor vehicle matters can look at your used car transaction and your sales contract to determine whether the dealer properly disclaimed responsibility for defects in the vehicle.

If you feel you might be the victim of fraud or other violations of law by a car dealer or if you are wondering about express or implied warranties or repair obligations of the seller-dealer, contact a consumer protection attorney in Virginia to understand your legal options. You may be able to revoke your acceptance of the car and cancel the transaction if the dealer made promises that turned out to be untrue. Your lawyer may help you negotiate a settlement of such a disagreement with the dealership or you might have grounds for a lawsuit. Money damages to compensate for financial loss and legal fees may be recoverable.