If you buy a new carbut your loan is not approved and you return the car to the dealership,is the that car still considered “new”?

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If you buy a new carbut your loan is not approved and you return the car to the dealership,is the that car still considered “new”?

I bought a “new”car in a dealership. After 2 weeks I discovered that the car was previously sold to another person but the bank did not approvethat person for a loan. Consequently the car was returned to the dealership. The car was sold to me as a new car. Is this legal?

Asked on November 20, 2010 under General Practice, Florida

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You may have a claim for fraud against the dealer.  Fraud is misrepresentation of a material fact made with knowledge of its falsity and with the intent to induce reliance on which you justifiably relied to your detriment.  Here, the fraud consisted of the auto dealer's failure to disclose that the car had been previously sold and therefore was not new.  You justifiably relied to your detriment that the car was new.  Nondisclosure of a material fact (that the car was not new) by a seller constitutes fraud when the seller had a duty to disclose information to the buyer which the buyer could NOT have reasonably discovered as occured here.

Your damages (the amount you are seeking in a lawsuit for fraud) would be either the benefit of the bargain or out-of-pocket-loss.  Benefit of the bargain is the difference between what you paid and what you should have paid had you known that the car was not new.  Out-of-pocket-loss is what you paid for the car.  If you want to keep the car, your damages should be benefit of the bargain.  If you don't want to keep the car, your damages should be out-of-pocket- loss.


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