Now that you know some of the limitations of an as-is agreement, watch this video for a real-world example of how it impacted a dealer we represented.
Below is a transcript of the video:
Here’s a good example of an as-is issue that I have seen in the past. We’re going to talk about Carfax and Auto Check shortly, but this case revolved around a dealer who bought a car at auction. It was disclosed as having some damage at the auction. When the dealer got the car, the dealer fixed the damage-ish, looked at the Carfax before buying the car. Nothing was reflected on the Carfax so the dealer then told the customer that essentially it never happened or hid the fact of the damage from the customer.
The customer then goes to trade the car in a short while later, maybe about a year later goes to trade the car in for a bigger SUV, and the trade-in dealership says, “I’m not taking this car. We ran a Carfax and it shows major accident damage.” And the customer says, “wait a second, the dealer gave me a Carfax that didn’t show that and told me that there was no issue with this car” and the trade-in dealership says “no way, the dealer had to know because it was listed like this at the auction or it was sold shortly after the damage. There’s no way it was fixed.” So the customer goes back to the original selling dealer and says, “hey, this is not right. You concealed damage.” And the dealer says, “what are you talking about? I gave you a Carfax. It shows it was clean and you bought it as-is.”
It turns out that the auction listings showed the vehicle with the damage and the disclosures identify the damage at the auction. Once the customer found that out, that was a huge problem for the dealer. It’s discoverable information so the customer was able to get it from the dealer because the dealer has that. But if the dealer somehow didn’t have that, the customer could get it from the auction.
They could subpoena the auction for the records. That is a classic case of a dealer hiding behind an as-is, taking advantage of the fact that a Carfax hadn’t been updated yet, and that was to the dealer’s detriment. It’s really important that dealers disclose the information that’s provided to them from the auction because the as-is doesn’t protect the dealer in all cases.
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