Helpful Tips for Buying a Car
February means the annual Philadelphia Auto Show, an exciting display of the newest makes and models for budgets large and small. If you are in the market for a new or used car, read these tips to help legally protect yourself throughout the car buying process:
Truth in Lending Rights
If you don’t fully understand the terms of your auto-loan, you can end up signing a deal that will have you paying more fees and interest than you bargained for. The Federal Truth in Lending Act (TILA) provides consumers with the right to all the details of a loan. Creditors, or any auto loan lender, are required by the FILA to provide you with a written disclosure statement that includes the important terms of the credit agreement. The disclosure statement should include:
- The annual percentage rate (APR)
- Monthly payment amount
- Payment schedule
- Length of credit agreement
- Late payment fees
- Total amount financed
- Total cost to the buyer
- Terms of the loan
- Creditor information
If a lender fails to comply with TILA, the consumer can file a claim within one year to recover damages plus the cost of attorney fees.
Fair Credit Reporting Rights
The Fair Credit Reporting Rights is a Federal law designed to protect the privacy and integrity of your credit information. Auto financing deals rely heavily on the consumer’s credit history. When you are buying a car, the dealership, bank, or finance company will pull your credit report. The report should provide a true representation of your credit history to guarantee that you receive the most attractive loan offer possible. If a credit report is inaccurate, the lender may request a larger down payment and you may not wind up with best offer. If you discover that your credit report contains errors, it is a violation of the FCRA and you may be entitled to damages.
Equal Credit Opportunity
The Equal Credit Opportunity Act (ECOA) protects consumers from discrimination when applying for a loan to finance a vehicle. A person’s race, religion, national, origin, marital status, or gender should not be considered when financing a car. For example:
- A creditor is prohibited from asking about the borrower’s race, national origin, color, religion, or other legally protected classification.
- If the applicant is denied a loan, the creditor is required to provide notice and include a reason for denial.
Spotting a Lemon
In layman’s terms, a “lemon” is a vehicle that has significant defects that are only discovered after a purchase is made. Lemons often have problems that are complicated and affect many different parts of the vehicle. For example, a lemon may have an engine that leaks oil, and that leak may cause damage to other parts under the hood. Issues that regularly arise with vehicles that are lemons include:
- Issues that cannot be repaired, even after several attempts
- Consistent warning light indicators
- Repairable but consistent and frequent issues
- Faulty brakes
- Anything that just doesn’t seem right with your car
Fortunately for consumers, New Jersey Lemon Law provides certain protections to consumers who have purchased a used car or new car. To qualify as a “lemon,” a new car must have a defect that substantially impairs the use, value, or safety of the vehicle, or a serious safety defect, which is likely to cause serious bodily injury or death if the vehicle is driven. The New Jersey State Lemon Law covers used passenger vehicles if they are seven model years old or less, are purchased for at least $3,000 and do not exceed 100,000 miles. Licensed dealers must provide consumers with a warranty if the car meets these criteria.
If you are experiencing any problems with you newly purchased vehicle, call the Law Offices of David W. Polsky for a free consultation. (973) 686-9787