When a person buys a used vehicle marked “as-is,” he or she must take great care in determining what this legal definition connotes. Additionally, he or she should be aware of any legal basis that may be available if such a vehicle stops working shortly after the purchase.
General Definition
When a seller marks a vehicle “as-is,” this basically means that the vehicle is being sold in the condition that it is in at the time of sale. The buyer accepts that repairs may be necessary and that the seller is not responsible for making or paying for such repairs.
Seller’s Notification Requirement
Car dealers must clearly denote that a vehicle is being sold “as-is” on the Buyer’s Guide. This is usually completed by checking the appropriate box on the guide. This federal requirement helps protect consumers from purchasing a vehicle unknowingly that is as-is. Many states allow car dealers to eliminate any implied warranties by marking the box labeled “as-is no warranty.”
The Buyer’s Guide also requires that information regarding any warranties be clearly spelled out, including the percentage of repair costs that the dealer will pay under a warranty. The Buyer’s Guide may state that implied warranties only are being provided. Implied warranties are based on those warranties that state laws read into every sales transaction for used vehicles. If a greater warranty is offered, the dealer should include information on the Buyer’s Guide regarding the warranty and mark the appropriate box. This section should include any warranties required by state law.
Legal Protections
In most cases, buyers have limited rights after purchasing a vehicle marked “as-is.” However, there are certain exceptions. The Federal Trade Commission is responsible for enforcing issues related to the Buyer’s Guide. If a used car dealer does not include the Buyer’s Guide, the car dealership can be fined up to $16,000 per infraction. However, buyers are usually stuck with the purchase unless the dealer’s fraud caused them to purchase the vehicle.
Some states do not allow a car dealer to eliminate implied warranties. Others require the dealer to use special and precise language on a document other than the Buyer’s Guide to eliminate these warranties. State and local laws may place additional burdens on car dealers and give state or local agencies the right to enforce the laws against them by imposing fines on them or allowing them to sue the dealers.
Maine and Wisconsin dealers have additional regulations that require specific disclosures regarding used vehicles.
If the as-is box is checked but the dealer still promises to repair the vehicle or cancel a sale if there are any problems with the vehicle, this information should be included in the Buyer’s Guide. If the manufacturer’s warranty still applies, this information should be included on the Buyer’s Guide.
Lemon Laws
Most state lemon laws only pertain to new vehicles. However, some laws pertain to used vehicles. These laws usually state that a car dealer must provide a warranty that is based on the age or mileage of the vehicle. This warranty period is usually only for a very limited time, such as Arizona’s law that provides a warranty for 15 days or 500 miles after the purchase. If the vehicle experiences problems during this warranty period, the dealer has to repair the vehicle. If the dealer does not satisfactorily repair the vehicle after multiple attempts, the dealer must replace the vehicle or refund the purchase price.
If a state does not have a lemon law for used vehicles, buyers may be able to receive protection under the Uniform Commercial Code which includes an implied warranty that the vehicle be fit for transportation. This type of legal argument is most effective in states that do not allow dealers to disclaim implied warranties by using “as-is” designations. Otherwise, dealers may be able to eliminate these warranties with their “as-is” designation.
Protective Steps
In order to make the most of an as-is purchase, the buyer should take extra steps to protect himself or herself. The buyer can request a report on the vehicle that shows the history of any accidents. If the buyer learns about an accident, this can alert the buyer to the need for potential repairs to the point of impact. The buyer can also request reports regarding the history of repairs and maintenance. Getting an experienced mechanic to inspect the vehicle before purchase can also help uncover any known or unknown problems about the vehicle.
If the buyer purchases a vehicle as-is, he or she may want to reflect this status by offering a lower purchase price for the vehicle in case repairs are necessary.
