Buying a Used Car
Adapted by Margaret Fisher, Institute for Citizen Education in the Law, Seattle, WA, from Street Law: A Course in Practical Law (8th ed.). Staff at the Washington State Administrative Office of the Courts (AOC) updated the lesson in 2012. For more information, contact AOC Court Services, 1206 Quince Street SE, PO Box 41170, Olympia, WA 98504-1170. For an electronic copy of this lesson, or to view other lesson plans, visit Educational Resources on the Washington Courts Web site at: www.courts.wa.gov/education/.
One class period (approximately 50 minutes)
Three copies of Handout 1 (Used Car Simulation) for the three students in the role-play
When is there an implied warranty on the sale of a used car?
(a) Did Tanisha legally waive the implied warranty of merchantability? Why or why not?
(b) What should she do now? Can she get any sort of recovery from Dave or Sell-A-Car?
Give the groups about 15 minutes to work. Tell them they will report back to the whole class at the end of their group work time. Ask if they understand the assignment.
She should have evaluated her personal needs for driving and hauling, done research about what kind of car to buy before shopping, and then comparison-shopped, comparing the price of the Toyota at Sell-A-Car with similar cars at other dealerships. She also should have had the car checked by a mechanic. During this check, she should make sure that the car has passed or will be able to pass the emissions test. If it cannot, she will be responsible for paying the costs of getting it in compliance with emission requirements. Additionally, she should have negotiated on the price.
She should have explored the car’s history. The law requires that the dealer give the prospective buyer the contact information of the previous owner if the previous owner was the government agency or business. She could also have looked into the vehicle’s history by looking on www.carfax.com. She should also check whether the National Traffic Safety Administration had ever recalled this vehicle by calling 1-800-424-9393 or by searching www.nhtsa.dot.gov.
Most importantly, Tanisha should have read all the documents she signed closely, and asked Dave to clarify what they meant. Tanisha also could have refused to sign the disclaimer and negotiation statement.
Tanisha also could have checked with the Better Business Bureau (BBB) to see whether the dealer was a reputable business. She also should have called the Attorney General's office to see if Sell-A-Car had ever been sued. She could also have called the Washington Department of Licensing to find out whether complaints had been filed against Sell-A-Car.
She could have purchased a warranty, so that the implied warranty could not be waived. However, she should be very careful to read what the purchased warranty included.
Used Car Simulation
Implied Warranties on Used Cars*
Under state law RCW 62A.2-314, every used car sold by a dealer in Washington for a customer’s personal use has an "implied warranty of merchantability.” This means that the dealer promises the used car will be fit for ordinary driving purposes, reasonably safe, without major defects, and of the average quality of similar cars available for sale in the same price range. A car can only be sold without the implied warranty if the customer knowingly agreed to waive the warranty and was provided with a statement of the particular characteristics or parts of the car that aren’t covered.
Absent the required disclosures and your customer’s explicit consent, an “as is” sticker in the window of a car or a signed waiver is not sufficient to waive the implied warranty. The implied warranty can’t be waived under any circumstance if a written warranty is offered with the car or the customer purchases an extended service warranty from the dealer within 90 days of buying a used car.
Whatever the status of warranty, dealers shouldn’t sell cars that, due to defective or missing safety equipment, aren’t legal to drive on public roads. Here are some general guidelines for dealers selling used cars under state law:
A general discussion of vehicle size, style, model, color, power, extra equipment and price is not a specific discussion or explicit negotiation of a waiver of the implied warranty of merchantability.
The use of an “As Is” sticker does not get around the Implied Warranty of Merchantability rules.
A signed, pre-printed form may not be evidence of explicit negotiation.
A clause waiving the warranty in a preprinted sales agreement is not evidence of explicit negotiation.
The burden is on the dealer to prove evidence of an effective disclaimer or waiver of a warranty.
If a customer buys an extended service warranty contract within 90 days of buying the used car, the implied warranty of merchantability cannot be waived under any circumstances – even if previously negotiated.
Used cars also have another implied warranty under state law RCW 62A.2-315, called Warranty of Fitness for a Particular Purpose. This provides that when the seller knows the vehicle is going to be used for a particular purpose, such as racing or towing a trailer, and the buyer is relying on the seller’s expertise to provide a suitable vehicle, a warranty is created that the item will actually be fit for that purpose.
DISCLAIMER OF WARRANTY AGREEMENT
THIS AGREEMENT IS ENTERED INTO BETWEEN SELLER AND PURCHASER COVERING THE HEREIN DESCRIBED VEHICLE.
THIS MOTOR VEHICLE IS SOLD BY THE SELLER AND PURCHASED BY THE PURCHASER "AS IS”, “WITH ALL FAULTS,” WITHOUT ANY WARRANTY, EITHER EXPRESSED OR IMPLIED. THERE ARE NO WARRANTIES, WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF. THE PURCHASER WILL BEAR THE ENTIRE EXPENSE OF REPAIRING OR CORRECTING ANY DEFECTS THAT PRESENTLY EXIST OR THAT MAY OCCUR IN THIS VEHICLE. __________________ Initial.
THE SELLER DOES NOT IN ANY WAY WARRANT THE FITNESS OF THE MOTOR VEHICLE FOR ANY PARTICULAR USE OR THE MERCHANTABILITY OF THE MOTOR VEHICLE PURCHASED UNDER THIS CONTRACT. Whether the motor vehicle is purchased for commercial or for personal family or household use purchaser, having Inspected the motor vehicle as fully as desired by purchaser, understands and agrees that The Seller makes no warranty whatsoever, expressed or implied, respecting the quality, characteristics, performance or condition of the motor vehicle, or any of its component parts, including but not limited to, the engine and its internal and external parts, the clutch assembly and related parts, the automatic or standard transmission and related parts, the drive line, the rear axle and related parts, the steering assembly and related parts, the electrical system, the front and rear suspension and related parts, the tires and wheels, the braking system, the radiator and cooling system or the heating and air conditioning systems; nor does The Seller make any warranty whatsoever, expressed or implied, concerning the length of time or mileage which the purchased motor vehicle will operate or travel after the date of the contract or purchase. _____________________ initial.
Purchaser further agrees that the seller shall have no liability for consequential damages in the event of injury to any persons or property, or any liability for loss of use, loss of time, loss of profits or income, or any other incidental expenses arising from malfunction or defect or unfitness or deficiency of this vehicle. __________________ initial.
Agreed to this____________________day of_____________________, 20___________
IMPLIED WARRANTY NEGOTIATION STATEMENT
Under the law, a vehicle is sold with an implied warranty as to the merchantability and fitness of that vehicle.
Unless specified in the comments section below, my signature below acknowledges, understands and agrees that the Seller makes no warranty whatsoever, expressed or implied, respecting the quality, characteristics, performance or condition of the motor vehicle, or any of its component parts, including but not limited to, the engine and its internal and external parts, the clutch assembly and related parts, the automatic or standard transmission and related parts, the drive line, the rear axle and related parts, the steering assembly and related parts, the electrical system, the front and rear suspension and related parts, the tires and wheels, the braking system, the radiator and cooling system, or the heating and air conditioning systems; the fuel system; the exhaust system; the frame and body; and any and all inoperable accessories.
With my signature at the bottom of this document, I further acknowledge that I will pay for any and all costs of repair on the vehicle, upon my taking possession of said vehicle.
IMPLIED WARRANTY IS PROVIDED FOR THE FOLLOWING ITEMS ONLY:
Agreed to this _____________ day of _____________________________________, 20____
Customer Name ______________________ Customer Signature _______________________
Dealership ___________________________ By _____________________________________
Questions to consider:
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