Consumer Protection FAQs - Automobile Sales
How many miles can a car have on it and still be considered new?
Generally, a used vehicle is defined as a vehicle that has been sold and taken
possession of by one or more retail buyers and has been driven over 200 miles total,
or a vehicle that has ever been registered with the Motor Vehicle
Department. However, a vehicle is not used if the registration is withdrawn
from the Motor Vehicle Department uncancelled, regardless of how many miles have
been put on the car.
What is bait and switch?
When a business offers to sell a car or service for a certain price
and when you go in to buy it, the offer is altered or the car or service is of lesser
value. For example, if a V6 model vehicle is advertised at $20,000 and when you
go into the dealership they say that the advertised price is only for the 4-cylinder
model, then that is a bait and switch.
Does an automobile dealership have to sell a car at the advertised price?
Yes.
What is “spot delivery”?
Spot delivery occurs when an automobile dealer gives you the vehicle
to take home, but the financing is not yet finalized, meaning, a bank has not yet
agreed to finance the loan for your vehicle. The buyer is bound to the terms and
conditions of the contract signed allowing the buyer to take the vehicle home. However,
if any of the terms and conditions change substantially at the closing of the deal,
this is a new contract and the buyer is not bound to accept it. For example, if
at closing, the dealer presents the buyer with a second contract with higher interest,
increased down payment required, or purchase of service or other insurance not present
in the original contract, this is a new deal and the buyer is not legally bound
to accept it.
What happens if the automobile dealer spot delivered a vehicle to
you and after you’ve had the vehicle the car loan is not approved?
After the loan is rejected the deal is off and you have to return the vehicle.
The dealer must refund any down payment and/or return your trade in.
If you signed a contract with a 7% finance rate and the dealer calls you
and claims he could only get you approved for 15% A.P.R., do you have to accept
this rate?
No. This is a new contract with substantially different terms
that are unfavorable to you. You don’t have to accept the new terms. You are
free to refuse or continue to negotiate the financing terms.
Does an automobile dealer have to disclose in writing whether a vehicle
has been in a wreck?
If a vehicle has sustained wreck damage and the cost of repair
for the collision damage exceeds 6% of the sales price of the vehicle, then, yes,
the dealer must provide a written affidavit to the purchaser that describes the
vehicle and states whether there has been repair work done on the vehicle due to
wreck damage. In addition, if the vehicle was repaired due to other forms of damage
sustained, e.g., hail damage, or otherwise altered and the cost of repair exceeds
6% of the sales price of the vehicle, again, the dealer must provide a written affidavit
to the purchaser that describes the vehicle and states whether there has been repair
work performed on the vehicle due to wreck damage.
Does a dealer have to disclose whether a vehicle is a salvage title vehicle?
Yes. It is illegal for a dealer to sell any vehicle that has been
“totaled” by an insurance company and declared a “salvage”,
unless the certificate of title indicates “Salvage” on it and that information
is disclosed to the buyer. In addition, any purchaser of a vehicle has the right
to physically examine the certificate of title.
Can New Mexico automobile dealership sell vehicles with salvaged titles?
Yes, but this information must be disclosed and the title must be branded as
salvaged.
Does an automobile dealer have to tell a buyer about any repair which a
vehicle has undergone due to damage from a prior accident?
Yes.
What is CARFAX®?
CARFAX® is an on-line service whereby a person can find out about
the title and accident history of a vehicle. CARFAX® is available to
dealers as well as members the public. For approximately $20.00, an individual can
do a search, using the V.I.N. of any vehicle. You can find out, for example, whether
a vehicle was ever “totaled” and declared a “salvage” title
vehicle, whether it is “Lemon Law” repurchase vehicle (i.e., declared
a “lemon” and repurchased by the manufacturer under a state’s
“Lemon Law”), or if the vehicle was in an accident that was reported
to any state’s Motor Vehicle Department (MVD).
Vehicle databases such as CARFAX® have many benefits, but a vehicle history
report from a database should not be substituted for an inspection by a certified
mechanic and an automotive body shop. Databases that provide vehicle histories
rely on the accurate reporting of the incidents to which vehicles are subjected.
Oftentimes, a vehicle will sustain some sort of damage, and for some reason or another,
the damage goes unreported to a MVD or insurance agency, causing an inaccurate or
incomplete report of the vehicle's history. CARFAX’s®
website address is www.carfax.com.
Are all defects in new cars covered by the Lemon Law?
No, only major problems are covered. See Lemon Law page.
When did New Mexico’s “Used Car Lemon Law” go into effect
and what does it say?
January 1, 2004. New Mexico’s “Used Car Lemon Law” as
it’s commonly known, provides for a statutory warranty for all used cars sold
in the state by an automobile dealer. In short, the statute will require that all
automobile dealers provide a warranty for all used cars they sell, covering the
first 500 miles or 15 days, whichever comes first. See Lemon Law page.