Can a car dealer sell a used vehicle without disclosing that the vehicle was in an accident?

My brother purchased a used truck and the dealer did not tell us that it was in an accident. He went to try to trade it in for a smaller vehicle and was told by the dealer he was trying to make the deal with, that the truck had been in an accident. If my brother would have known this in the beginning he would have not purchased the truck. He and my father asked if the truck had a clean title and the dealer said yes it was clean.

Asked on November 4, 2011 under General Practice, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The dealer *may* have committed fraud in not disclosing the accident. The reason the dealer *may* only have committed fraud is that, from what you write, any fraud would have been in the form of a material omission, or a failure to disclose information which a reasonable party would assume would have to be disclosed. The assumption is that since a prior accident affects resale value, trade-in, etc., a vehicle's buyer has a reasonable belief that such would be disclosed, and the failure to do so is therefore a form of fraud. However, it is *much* more difficult to establish fraud by an omission than by an actual lie or misrepresentation, so while your brother may have a case, it is a weaker one than it would have been if he had asked the dealer about accidents and the dealer had lied.

Note that the dealer did not lie in saying that the title was clean--title refers to ownership, not condition. If there were no other claims of ownership, no liens, no security interests, etc., title was clean.

If the difference in value due to the accident is sufficient to justify retaining an attorney to seek compensation, your brother should do so. If the difference in value is only a few hudred dollars or so, it may not be worthwhile taking action--making out a negligent omission case without an attorney's help can be very difficult.


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