If I traded in a car without disclosing mechanical problems and ow the dealer wants to cancel the deal, can they?

Traded in a truck (for a new one) that needed a new engine with out disclosing it to the dealer. They test drove it but never inspected it before they agreed to purchase it. Then 6 days after the paperwork was signed, they called saying it had a knock; 17 days later they called saying it needs a new engine and that we knew about it and that they want to cancel the deal. Can they? We never signed nor stated that is was mechanically sound. They had 3 hours to inspect and drive it. It was sold “as is”.

Asked on July 9, 2012 under Business Law, New Mexico

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

An "as is" sale does not protect you when you commit fraud. Fraud is the knowing misrepresentation--or lying about--material (important) facts which are relevant to the decision to enter into the transaction. Fraud can also be found from a knowing or deliberate omission, or failure to disclose, problems of which the seller was aware  and which the law could consider him/her to be under an obligation to disclose--such as the fact that a vehicle needs a new motor. If you had not known of the problem, then you would likely not be liable; but if you did know, and the dealer can show that either  you did know or had to known (any reasonable vehicle owner in your position would have known), then they can likely rescind the contract for fraud, canceling the deal.


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