Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Tuesday, July 16, 2024 | Back issues
Courthouse News Service Courthouse News Service

Indiana Says Car Dealer Hid Details of Wrecks

INDIANAPOLIS (CN) - A used car dealership in Indiana sold at least 60 vehicles to consumers without disclosing they had been in major accidents, and in some cases needed significant repairs, the state of Indiana claims in a lawsuit.

Under Indiana law, cars that are deemed a "total loss" -- typically as a result of a major accident -- require special titles before they are legally drivable.

These so-called "salvage titles" remain in effect until required repairs are made and a police inspection certifies the vehicle is road-worthy.

At that point a new title is issued for the vehicle, but sellers are nevertheless required to inform the buyer that the vehicle has been rebuilt.

In a complaint filed in the Marion County Superior Court on Monday, Indiana Attorney General Greg Zoeller alleges that Indianapolis car dealer Circle City Auto Exchange, failed to disclose to consumers the statuses of scores of vehicles that had been in major accidents and were subsequently repaired.

According to the complaint, Circle City bought most of these vehicles at auctions in Michigan, and brought them back to Indiana without disclosing their "total loss" status.

Circle City would use this deception to sell the vehicles at a high retail price, with consumers thinking they were buying perfectly normal cars and trucks, the lawsuit claims.

Zoeller claims that in addition to covering up the history of the vehicles, Circle City financed purchases with interest rates as high as 24.95%, and used finance companies who were also unaware of that vehicles history.

Many of the vehicles eventually were repossessed due to the high interest payments, and because the vehicles suffered major mechanical problems that were not covered by Circle City's warranties.

The lawsuit seeks damages under the Deceptive Consumer Sales Act, and restitution for the affected customers.

"The defendants have used multiple deceptive tactics to sell Hoosiers cars that have serious limitations and likely shouldn't be on the road," Zoeller said in statement. "In the auto industry, the seller often has more information about a vehicle than the buyer does, and this can easily lead to buyers being taken advantage of.

Far from a new problem in the Hoosier state, in 2015 alone, the state has received 676 consumer complaints about car sales, and the attorney general's office has taken legal action against 13 auto dealers, securing a total of $1.1 million in restitution for the wronged buyers.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.