Many (if not all) manufacturers and distributors market certain used vehicles as “Certified Pre-Owned,” but what does that even mean? The term is used to convey a degree of quality higher than a standard used car, so it must mean it is more than just “used,” right? But, does it, for example, mean a car is “like new again,” as BMW of North America, LLC, advertises?
In short, the meaning of the “Certified Pre-Owned” designation varies by manufacturer. Below is a brief overview of when the term “certified” and other similar terms cannot be used under California law, as well as other duties imposed on car dealers selling vehicles as “Certified Pre-Owned” and the like.
When A Car Cannot Be Sold As “Certified Pre-Owned”
Vehicle Code section 11713.18(a) sets forth various limitations on the “advertise[ment] for sale or sale [of] a used vehicle as ‘certified’ [and] us[ing] any similar descriptive term in the advertisement or the sale of a used vehicle that implies the vehicle has been certified to meet the terms of a used vehicle certification program.” These limitations include, but are not limited to, the following:
(1) “[t]he dealer knows or should have known that the odometer on the vehicle does not indicate actual mileage”;
(2) “[t]he dealer knows or should have known that the vehicle was reacquired by the vehicle’s manufacturer or a dealer pursuant to state or federal warranty laws” (i.e., is a lemon-law buyback);
(3) the vehicle’s title is branded “with the notation ‘Lemon Law Buyback,’ ‘manufacturer repurchase,’ ‘salvage,’ ‘junk,’ ‘nonrepairable,’ ‘flood,’ or similar title designation required by this state or another state”;
(4) “[t]he vehicle has sustained damage in an impact, fire, or flood, that after repair prior to sale substantially impairs the use or safety of the vehicle”;
(5) “[t]he dealer knows or should have known that the vehicle has sustained frame damage.”
(Ibid., emphasis added.)
More broadly speaking, a dealership cannot use “[t]he term ‘certified’ or any similar descriptive term…in any manner that is untrue or misleading or that would cause any advertisement to be in violation of [Vehicle Code section 11713(a)] or Section 17200 or 17500 of the Business and Professions Code.” (Veh. Code § 11713.18(a)(9).) At the Auto Fraud Legal Center, we argue this protection is broad. Namely, we argue it is illegal for a dealership to sell a vehicle as a “Certified Pre-Owned” when the vehicle does not conform to the manufacturer’s or distributor’s standards for certification.
Your Rights As The Buyer Of A “Certified Pre-Owned”
First, before you sign a contract to purchase a “Certified Pre-Owned” vehicle, the dealership must provide you with a copy of “a completed inspection report indicating all the components inspected.” (Veh. Code § 11713.18(a)(6), emphasis added.) In some cases, the dealership utterly fails to give the buyer a copy of the inspection report. In others, the report is incomplete, which is not sufficient.
For example, in the case of Patiag v. Marimart, Inc., dba Woodland Hills Honda, Los Angeles County Superior Court Case No. 19STCV32919, in which Woodland Hills Honda is alleged to have unlawfully sold a frame-damaged vehicle as a “Certified Pre-Owned,” we also alleged Woodland Hills Honda violated Vehicle Code section 11713.18(a)(6) by failing to provide the buyer with a copy of a completed inspection report. Namely, the box that would have indicated the vehicle’s frame/unibody met Honda’s certification standards (box 5) was not checked:
More specifically, based on our position that the dealership must comply with the requirements of the manufacturer’s or distributor’s “Certified Pre-Owned” program, whenever the manufacturer or distributor requires the dealership to use a specific inspection report (for example, this “164 POINT INSPECTION CHECK SHEET” available on Kia Motors America, Inc.’s website), we argue the buyer is entitled to a completed copy of that inspection report. Thus, in the case of Pegues v. EJE, Inc., dba North County Kia, San Diego County Superior Court Case No. 37-2019-00002311-CU-CO-NC, we successfully argued it was improper for North County Kia to provide our client with a copy of a 111-point inspection report.
Second, if a dealership disclaims the implied warranty of merchantability, it is prohibited from selling the vehicle as “Certified Pre-Owned.” This warranty arises by operation of law in the sale of a used car and has a minimum duration of 30 days. (Civ. Code § 1795.5(c).) Such a disclaimer might appear in a sale contract such as the following:
If a contact contains this language, by law, the vehicle is not “certified.”
Third, if a dealership sells a vehicle “AS IS,” it is prohibited from selling the vehicle as “certified.” Thus, if you purchase a “Certified Pre-Owned” and the Buyers Guide, which the dealer is obligated by state and federal law to give to you (Veh. Code § 11713.1(t); 16 C.F.R. § 455.3(a)), looks like the below, b law, the vehicle is not “certified”:
If the dealership violates any of the above provisions, Vehicle Code section 11713.18(a) prohibits the dealer from selling the vehicle as a “Certified Pre-Owned” (and presumably charging you a premium for the “Certified Pre-Owned” designation). Contact the Auto Fraud Legal Center TODAY for a COMPLIMENTARY evaluation of your rights.