Dealer Integrity Must Fill Gap in Law

Question: I purchased a Mazda RX-7 from a new-car dealer in March. It was sold to me as a new car, and I paid above the sticker price. Since then, I learned the car was sold a month earlier to a man who drove it 400 miles. (I have his name, address and phone number.) I believe the factory warranty registration may still be in the previous owner’s name. Although I knew the mileage at the time of the purchase, I was not told the car was previously owned. Has the dealer sold me a used car under the pretense of its being new?--J.L.B.

Answer: In some ways, state laws can be quite strict about what can be represented as a new car, but in many other ways the laws are vague. In California, the Vehicle Code states that a used vehicle is one that has been sold and operated on the highway or has been registered with the Department of Motor Vehicles. It also applies the used-car designation to those that have been operated as demonstrators.

When you purchase a car from a dealer, you typically sign a standard motor vehicle purchase order and disclosure form, which is required by federal law. This form indicates all the pertinent information about the car, including whether it is new or used.

Although this may all seem straightforward, there is a large gray area in which a motorist must depend on a dealer’s integrity. For example, state law does not explicitly set a mileage at which a car is no longer considered new. For example, if a car is transferred between dealers in a swap, which is common practice, the car could conceivably be driven many miles from one dealership lot to another. At the point a car has more than 25 miles on it, I would begin to consider it a bargaining issue in settling on the price.

The first thing you should do is go back to the purchase order you signed and make sure it indicates the car was new at the time you bought it.

Then, the key question is whether the car was either previously operated or registered with the state. With all the miles on the car, it seems obvious that somebody operated the car on the highways, either a previous owner or the dealer. The motor vehicle department records should make it clear whether the car was previously registered. If so, the car was not new.

If you cannot resolve the problem with the dealer, you may want to contact the New Motor Vehicle Board, a state agency. The board does not have legal authority to force a settlement, but it can lean on dealers to correct problems. Telephone (916) 445-1888.

If you have no success with the board, you might want to contact the investigations section of the DMV. In some cases, the New Motor Vehicle Board will initiate the contact. The investigations section has authority to investigate whether a dealer is complying with the Vehicle Code and can take legal action.

Most important, you should write a letter to Mazda Motors of America, which is headquartered in Irvine. Include all the documentation, including anything that would raise the possibility of another individual owning the car.

If you are correct, you should expect no less than a refund amounting to the difference between your purchase price and the value of the car sold as used, which is available from the Kelly Blue Book.

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