Used cars marketed to working families are often in poor repair and have mechanical defects. Frequently these cars have suffered previous undisclosed damage from traffic collisions or floods. All too often used cars are not only unreliable, but unsafe.
Dealers are very skilled at detecting flood and wreck damage to vehicles they purchase for resale. A person with experience repairing or inspecting cars can identify markers of wreck or flood damage within minutes. There are signs, such as slight paint overspray, that ordinary car buyers would never notice but are obvious to people with experience.
Dealers are able to buy cars with this type of damage cheaply, and then resell them at a substantial profit by failing to disclose the vehicle’s adverse history. In fact, the business model of many low-end used car dealers is based on buying vehicles with wreck damage, flood damage, or serious defects, making cosmetic repairs so that lay people are unlikely to detect the problems, and then selling them without disclosure.
Many of these cars are dangerous to drive. Even if the defects are not dangerous, when a car becomes inoperable soon after a family purchases it, the family will find itself at the beginning of a downward spiral. The car is no longer an asset, but a liability. The cost of repairing the car may exceed its value, but, without repair, the car no longer serves its purpose. While the car is no longer helping the family, the car payments are still due.
There are a number of policy alternatives to address these issues such as used car lemon laws and required warranties; prohibiting disclaimer of implied warranties and “as is” sales; or requiring inspection of, and minimum condition for, used cars for sale.
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