Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

 In This Section

 Advertising
 High Pressure Sales
 Documentary Service Fees
 "Packing" Payments
 Changing the Contract Terms
 Warranty Service
 Cancellation Rights
 Unlicensed Dealers
 Researching the Vehicle
 Inspecting the Vehicle
 Buyer Beware
 Implied Warranties
 As Is
 Limited Warranties
 Get it in Writing
 Service Contracts

A savvy consumer should be aware of some common misleading tactics used by car dealers.   We see the tactics mentioned below as serious violations of the Washington State Consumer Protection Act and want to know if you have been subjected to any of the following.  If you would like to file a complaint based on unfair or deceptive sales tactics, please file a complaint or download a paper complaint form here or call us at 1-800-551-4636.

Advertising Tactics

Advertising can be helpful to consumers by being informative and as a time-saving tool. Advertisements can also be confusing and some are even deceptive. 

 "Bait-and-switch" – a very attractive deal on a car is advertised (the "bait"), but at the dealership the salesperson tries to sell a more expensive car (the "switch").   State law requires that the dealer sell you the vehicle at the advertised price even if you are not personally aware of the advertised price.

"Special" or "Sale Price" – references a former price when the car may never have actually been offered at the "former" price 

"Above or Below Invoice" – "Invoice" price referred to in these offers may not really reflect what a dealer actually paid for the car.  The invoice price may incorrectly include an amount which the manufacturer holds back and later returns to the dealer as profit.  State law requires that advertised invoice prices be the actual cost of the vehicle to the dealer after all manufacturer holdbacks and incentives have been subtracted.

[Back to Top]

 


High Pressure Sales Tactics

Holding keys – Salespeople will sometimes ask for the keys to your car "in order to evaluate it for trade-in purposes."  This is a reasonable request but you should insist that your keys be returned to you after the test drive.  It is an unfair sales practice for a salesperson to keep your keys while using high pressure sales tactics to get you to buy.

Quick Tips for Price Negotiation

 
  • Don't negotiate when you're tired.  Take a break.
  • If salesperson changes, always confirm where negotiations left off with the last salesperson.
  • Don't let emotions cloud your judgment.

Remember . . . there are lots of vehicles from which to choose!

 

Cash deposits – If a salesperson asks for a cash deposit to show "that you are serious about buying," you are under no obligation to provide such a deposit. You should be suspicious when asked to provide one. It is an unfair practice for a salesperson to take a cash deposit and then refuse to return it if you do not sign a contract.

Statements that do not bind you – If you are asked to sign a statement to the effect that you "agree to buy a car when terms can be agreed upon," the salesperson may try to insist that, because you signed such a statement, you are legally bound to buy a car. That is not true. You should not sign such a statement in the first place: even if you do, it does not legally require you to buy a car. When negotiations break down, you are free to walk away.

Multiple Salespeople / Multiple Worksheets – It is common for some salespeople to use forms called "worksheets" to negotiate terms with you.  Neither you nor the dealership are bound by what is written on a worksheet.  If you reach an agreement you must check it yourself to see that the terms on the worksheet appear accurately on the final contract terms.  If you do not understand something written on a worksheet or anything in the final contract, ask for an explanation and be willing to walk away if you don't get a satisfactory answer.

Blank Contracts – Sometimes a dealer will ask you to sign a blank document and tell you that the dealer will fill in the information later.  Don’t sign a document until it is completed fully to your satisfaction. 

[Back to Top]

 


No Three-Day Right of Cancellation

The most common myth of consumer law is that auto buyers have a three-day “cooling off” right to cancel a purchase.  There is no three-day right of cancellation when purchasing a vehicle at the dealer’s main place of business.

[Back to Top]

 


Documentary Service Fee

A dealer may charge an optional documentary service fee in an amount not to exceed $150.  This fee compensates a dealer for the cost of titling and licensing a vehicle.  It is an optional fee and a dealer may not represent that the fee is required by law.  A consumer is free to negotiate a waiver of the fee. Dealers must disclose this $150 optional fee in their advertisements when stating sales prices of cars.

[Back to Top]

 


"Packing" or "Loading" Automobile Payments

Packing or loading payments is a slang term used to describe a practice promoted by the credit insurance business and used by the auto industry to get customers to agree to purchase additional products, such as credit insurance, service contracts, chemical protectants, and security devices, without revealing their true impact on their monthly payments.

Packing is played out when a customer finances their vehicle through the dealer.  It goes like this: a customer agrees to a purchase price and the dealer quotes a monthly payment approximately $20 to $40 higher than what is needed to cover the price of the vehicle.  That creates a "pack" or room in the payment to add in the optional products.  Dealership personnel are trained to suggest to customers during the negotiations that the optional products are included "free" or at reduced cost.

Because the monthly payment doesn't increase and because the customer believes the products are "free" or discounted, most people don't object when the products are included in the final contract.

Automobile dealers who use "packed" or "loaded" payment quotes try to conceal their actions, so you may not realize immediately that you are being misled.

REMEMBER, PACKING OCCURS WHEN YOU FINANCE THROUGH THE DEALER:

  • Watch out if a dealer seems overly concerned with keeping your focus on the size of the payment, which doesn't seem to change during your negotiations
  • Listen for key words including "Protected payment" or "It's included!" or "It's provided no extra charge!" or "Your payment is insured, it won't change!"
  • Beware when additional products or services are added at "no extra cost"
  • Comparison shop for interest rates and financing terms
  • Check finance terms with your bank or credit union before signing up for dealer financing. Dealer financing may be more convenient, but interest rates may also be higher than those charged directly by banks
  • Consult an amortization schedule. Make sure payments quoted aren't higher than what is needed to cover the purchase price of the vehicle and products you have agreed to buy
  • Negotiate on price, trade-in value AND interest rate. Don't let the negotiations focus solely on the monthly payment
  • Request that all payment quotes be disclosed with interest rate and term (number of months) and the specific products and services that payment covers
  • Check purchase agreement and loan documents carefully to make sure only the products you have agreed to are included
  • Confirm the price of all products included in your sales contract and loan agreements
  • Ask what your monthly payment would be if optional products are removed from the contract
  • Remember everything is negotiable in a vehicle deal and nothing is "free"
  • There is no three day right to cancel a car purchase or lease. If you sign the contract, you are legally bound by its terms.

[Back to Top]

 


Changing the Terms of the Contract

After a deal is agreed upon and the contract signed, if you are contacted by the dealer saying they now need a larger down payment, a higher monthly payments, or a co-signor you  are not required to accept these new terms.

By law, the dealer has 4 working days from the time of purchase/lease (excluding weekends and holidays) to find financing and finalize the sale according to the terms of the contract. When the dealer fails to locate the financing specified in the contract in that time period, there is no binding contract and the dealer must offer to return your contract documents, down payment and trade-in vehicle before attempting to negotiate a new agreement with you.

If you have taken possession of the car, you must promptly return it when notified that the transaction cannot be completed within the 4 working-days period.

[Back to Top]

 


Warranty Service

If your new or used car is covered by a manufacturer's warranty and you have a problem which falls under the warranty, the authorized service department in the dealership is obligated to perform repairs required by the warranty.  A dealer may not refuse warranty service in order to avoid liability under Washington's "Lemon Law".

Motor Vehicle Lemon Law - If your vehicle is less than two-and-a-half years old and has been repaired under the manufacturer's warranty several times but still has a substantial problem or has been out of service for more than 30 days due to diagnosis and/or repair, the vehicle may be a "lemon." You may be eligible for arbitration under the state administered program which was created to decide warranty disputes between consumers and manufacturers. If the vehicle is determined to meet the elements of the Lemon Law, the manufacturer can be required to replace or repurchase the defective vehicle.

Service Contracts - When purchasing a service contract, check the dates that the warranty is effective to ensure that it does not cover the same period as the manufacturer’s warranty.  You can also cancel a service contract at any time during the life of the contract.  If you cancel within the first ten days after purchase and you do not make a claim, you must receive a full refund.  After 10 days but not more than thirty days, you must be refunded the full amount minus a cancellation fee up to $25.00 if no claim has been made.  After thirty days, the refund will be based on elapsed time or mileage from contract purchase minus a cancellation fee.

[Back to Top]

 


Used Car Considerations

Know Your Needs
The same general guidelines should apply when purchasing a new or used vehicle.  The following information is provided as a guide to your rights and responsibilities in our state's used car market.  To increase your chances of making the right purchase for your needs, please read our Buying a Car page for suggestions regarding general auto purchases. 

We encourage you to visit our Buying Precautions web page as well in order to get specific examples of sales practices that would violate the Washington State Consumer Protection Act

In addition, it is important to remember that you always have the right to shop and compare when making any purchase, especially when buying an item as costly as a new or used vehicle.  You will find the process much easier if you understand that you can shop and compare not only for your local auto dealers, but also your financing and warranty services as well.    


Beware of Unlicensed Dealers

If you respond to a classified ad and the seller has several cars for sale but does not have a car lot or showroom, you may be dealing with a “curbstoner,” who is an unlicensed auto dealer.  Under state law, anyone who sells five or more vehicles in a 12 month period must obtain a dealer's license (RCW 46.70.021). Licensing requirements exist to protect buyers from problems such as vehicle title transfer difficulties; buying unregistered, wrecked or rebuilt cars; and purchasing a car with a “rolled-back” odometer.  Curbstoners do not become licensed as a dealer and often take advantage of consumers while trying to avoid detection from the violations they commit. 

Private sellers also often advertise in the classified sections of newspapers.  In the case of legitimate private (non-dealer) sales, you should put the purchase and sale agreement in writing.  It should include a description of the vehicle, the price, a statement that the seller has clear title to the vehicle and all other representations and promises.

No matter whom you buy from, insist on a thorough test drive and independent mechanical inspection before you negotiate the price and other terms.

[Back to Top]


Researching the Vehicle

It is always a good idea to conduct some research before you buy a new or used vehicle.  By law, the dealer is required upon request to either display or disclose in writing a used vehicle's asking price (RCW 46.70.125).  The dealer must also provide the name and address of the former registered owner to a prospective buyer upon request if that owner was a business or government entity.  This disclosure allows you to ask questions about the use and maintenance of the vehicle, including any accident damage, repairs, and mileage (RCW 46.70.180(6)).

You may also want to find out if a vehicle was ever recalled by the manufacturer.  The National Highway Traffic Safety Administration can be contacted at 1-800-424-9393 for this information. 

Each used vehicle offered by a dealer by law must have a Used Buyer's Guide posted in its window which gives information about the vehicle's warranty status as offered by the dealer.  If negotiations are in Spanish, then a copy of the Spanish version of the Used Buyer’s Guide must be provided to you. 

[Back to Top]


Inspecting the Vehicle

It is a violation of dealer licensing regulations for a dealer to sell a car that cannot be safely operated on public highways (RCW 46.70.101(1)(b)(viii)).  This means that the car must at least have working headlights, taillights, brake lights, turn signals, brakes, wipers, a windshield without cracks that substantially obstruct the driver's field of view and tires with a minimum tread of 2/32 of an inch.  Because it is also illegal to operate an unsafe motor vehicle on public roads and highways, a vehicle owner also bears responsibility and liability for the condition of the car.

Prior to agreeing to buy a vehicle that meets your needs, take the used vehicle to a mechanic you trust to have the engine, other mechanical parts and safety equipment inspected and tested. When a dealer or private party is reluctant or refuses to allow an independent inspection of the vehicle, you should seriously reconsider whether this is the car or truck for you.  You may also consider the following actions before making a decision about purchasing a vehicle:

  • Test Drive First - Before you buy a used vehicle you should thoroughly examine the vehicle and go for a test drive. A valuable and informative test drive should be more than a demonstration drive where the salesperson explains the features of the vehicle.  A test drive should be a sampling of the vehicle's mechanical operating condition. This means that you should drive the vehicle as you would under every day driving conditions — freeway, in-city, hills etc
  • Check the Gauges - You should check the operation of all electrical and comfort amenities (windows, lights and turn signals, defroster, heater and air conditioner), blow the horn, check the brakes by coming to a controlled emergency stop, and listen to the engine accelerate when entering on to the freeway and on hills
  • Complete a Visual Inspection - Do a complete visual inspection of the vehicle; look under the vehicle for any signs of frame damage or collision repairs, any flood damage and any missing, loose or ill fitting body parts; check the engine compartment and trunk for fresh paint that might reveal prior damage or signs of flood damage
  • Check it out with Your Mechanic - If the vehicle passes your test, take it for an inspection by a qualified mechanic of your choosing. The mechanic should check the brakes, electrical system, compression, transmission, and every other system on the vehicle, especially any which caught your attention during the test drive. You should also consider an emissions control system inspection and test.  Inspections may cost you some money, but if the mechanic discovers a major defect, you have saved yourself a big problem and a lot of money.  When an inspection reveals only minor defects, you can use that information to negotiate either a lower purchase price or get the dealer to agree, in writing, to fix the items before purchase.

The more that you know about a vehicle before you buy, the greater the likelihood that you will have picked the best vehicle to meet your needs.  Before you buy is the time to test the vehicle!

[Back to Top]


Buyer Beware

A thorough test drive and mechanical inspection are the only ways to make sure the vehicle you are contemplating buying is in good mechanical condition.  Verbal representations about the vehicle by a salesperson are not necessarily binding promises to help you with any problems that develop.  Many quality dealers will stand behind vehicles they sell and will work to solve problems, but a buyer should not expect that the dealer will always solve every problem.  If you buy it "as is," and it is defective, you cannot always expect the dealer to fix it.

[Back to Top]


Implied Warranty of Merchantability

Every vehicle sold in Washington by a dealer has an "implied" warranty that the vehicle will be fit for ordinary driving purposes. That means the vehicle must be fit for ordinary driving purposes, free of major defects, reasonably safe, and of the average quality of similar vehicles available for sale in that price range.

The duration and extent of an implied warranty is conditioned on the age, mileage and price of the vehicle as well as the nature and timing of the problem.

[Back to Top]


"As Is"

Most used vehicles are offered by dealers "as is."  If you explicitly negotiate and knowingly accept such an offer, you give up your implied warranty of merchantability.  Nothing in any law requires you to sign a waiver of your implied warranty rights under any circumstances.

You waive the implied warranty only if:

  1. The dealer explicitly discussed warranty terms with you
  2. You are accurately informed of the consequences of purchasing the vehicle "as is" (i.e. the waiver lists the particular qualities and characteristics of the vehicle that will not be covered)
  3. You do not purchase an extended service contract; and finally,
  4. You knowingly and voluntarily assume all risk for costs of repairs due to defects in the vehicle.

If you waive the implied warranty and the vehicle breaks down, you will be responsible for all repairs!  If the vehicle breaks down one minute or one mile from the dealership, you will still be responsible for all repairs!  Buying a vehicle "as is" means you are assuming all responsibility for the repair and maintenance of the vehicle! As an informed buyer, you should consider whether negotiating away your implied warranty rights is really in your best interests.  Buying a car "as is," you will not have any warranty and little if any recourse against the dealer if the vehicle turns out to have substantial problems. Remember, nothing in any law requires you to sign a waiver of your implied warranty rights under any circumstances. You are not obligated a to sign implied warranty waiver

[Back to Top]


Limited Warranties

A dealer may provide you with a limited warranty that would pay a portion of the repair costs for covered components during the warranty period (typically 90 days or less).  Be sure you understand the coverage and exclusions.  You should insist that the dealer put all promises and representations as to quality and warranty in writing.  If the dealer gives you a limited written warranty, the implied warranty cannot be waived, and you will have both the limited and implied warranties on the vehicle. 

If you purchase a service contract on a used vehicle from the same dealer within 90 days of purchase, the implied warranty of merchantability cannot be waived, and you will have the protection of both the service contract and the implied warranty of merchantability (RCW 48.96.045(4)).  The availability of the implied warranty or a service contract does not eliminate the need for a thorough test drive and an inspection by a qualified mechanic.

When a vehicle is sold, the seller (this may be you if you have a 'trade-in') must accurately complete an odometer disclosure statement which will be submitted with an application to issue the new certificate of title.

[Back to Top]


Get it in Writing

If you did not effectively or knowingly waive the implied warranty, or if the dealer made sufficient verbal promises about the vehicle's condition and what will happen if any problems arise such that an express warranty is created, you may be able to get the dealer to fix the vehicle at reduced or no charge.  But verbal promises are always difficult to prove and enforce.  When a dealer's salesperson or manager refuses to put important promises or representations in writing, you should consider buying elsewhere.  Further, since your signature on a document is very important, you must read everything before you sign making certain that any verbal promises are included.

[Back to Top]


Service Contracts

You may be encouraged by the dealer to buy an extended service contract for the vehicle. If you purchase an extended service contract, the dealer is not allowed to disclaim the Implied Warranty of Merchantability; that is, the vehicle cannot be sold "as is" (see the notice requirements in RCW 48.110.075 (2)(e)(iv).

Before you visit a dealership, you should find out what service contracts are generally available in your area and compare the extent of coverage, the maintenance requirements to keep the policy in force and the cost.  You may request copies of various contracts offered by the dealership before you buy.  You may cancel any extended service contract at any time and receive a refund.  If you cancel within 10 days, you should receive a full refund.  A full refund minus a cancellation fee must be provided to you if you cancel more than 10 days but less than 30 days of purchase and have made no claims under the contract.  After 30 days from purchase, a pro-rated refund should be calculated on either time or mileage minus a cancellation fee. 

By law a company offering a service contract must be registered with the Office of the Insurance Commissioner.  The name and address of the service contract obligor, the policy number and how to file a claim under the service contract must be clearly stated on the contract.  When deciding on a service contract, examine the contract itself rather than making up your mind on the basis of a brochure or a salesperson's statements.  Check for overlapping or duplicate coverage in the service contract that you may already have under any remaining manufacturer warranty.  You should consider whether saving the price of the service contract and "insuring" yourself would be more cost effective.

[Back to Top]