Put simply, it is illegal for an auto dealer to sell a vehicle having existing damage or prior accidents without disclosing the true condition of the vehicle to a buyer. This is one of many ways commercial sellers can—and too often do—commit dealer fraud. It is an easy, if illegal, way to mark up the resale price of a vehicle, especially after a dealer picks up the vehicle at auction pricing.
In California, dealers are not required to sell a warranty with every vehicle, which makes California a target market for dumping damaged cars, especially where there are questions or holes around chain of title. A vehicle from a flood zone, for example, might evade a flood salvage title by being cleaned up by the seller and transferred to a dealer that sells cars “as is.” Likewise, if a car is in an accident that is not reported to an insurer or to the police or to the Department of Motor Vehicles, it can be cleaned up and offered for sale without alerting a potential buyer to look closely for poorly repaired or unrepaired damage.
A dealer is, however, not legally permitted to sell a vehicle in damaged or unsafe working condition without fully informing potential buyers of the vehicle's accurate status. Furthermore, a dealer is not allowed to sell a vehicle with an accident history report the dealer knows to be inaccurate even when selling a vehicle as-is. These rules are designed to encourage dealers to perform their own used car inspections upon receiving or purchasing a vehicle and prior to setting a vehicle's price and offering it for sale. Dealers are greatly incentivized to take care in offering only safe and soundly running autos to the public, and while some ‘misses' might genuinely be chalked up to human error, the existence of unrepaired accident damage that could have and should have been discovered on inspection may be indicative of dealer fraud.
If you know or suspect a dealer sold you a vehicle with a false history report or based on other false representations, you can file a Record of Complaint Form (form no. INV 172A) with the Department of Motor Vehicles (DMV). While filing a formal complaint does not replace self-advocacy or outside legal assistance to pursue remedial action, it does create a government record of your complaint, which may be important evidence in the event of litigation. It also provides notice to the DMV that a particular dealer is neglecting important safety laws.
If you purchased a vehicle with unrepaired accident damage from a dealer, you should consult with an attorney about the facts of your case and whether you are likely to prevail if the matter is taken to court. Fortunately, the existence of unrepaired accident is relatively straightforward to document and prove if you catch it early and have it diagnosed and documented by a professional. Since it is not necessary to show that the dealer was aware of the unrepaired damage or that the dealer intended to deceive the buyer, it may be easier, in many cases, to work with an attorney to present the compelling evidence to the dealer and work with the dealer to either replace the vehicle, void the sale, or have the damage repaired rather than going straight to court.