Category: Car Dealer

Illegal Vehicle Repossessions and Military Protections: What Car Buyers Should Know

4/7/2026

When you finance a vehicle, you expect the lender and dealership to follow the law if something goes wrong with the loan before taking the vehicle back. A recent federal enforcement case involving CarMax, the largest used car retailer in the United States, highlights why these protections matter and what can happen when lenders fail to follow them.

A DOJ Settlement Over Repossessed Vehicles

In February 2026, CarMax agreed to pay nearly $500,000 to resolve allegations that vehicles were unlawfully repossessed from military service members. This is happening because they repossessed vehicles belonging to at least 28 service members between March 2018 and October 2023 while those individuals were on active duty or had been called to military service. Under the settlement, the company will pay at least $15,000 to each affected service member, totaling $420,000 in compensation, along with a $79,380 civil penalty to the federal government.

The Servicemembers Civil Relief Act and Vehicle Repossessions

The Servicemembers Civil Relief Act (SCRA) is a federal law, and it has protections for active-duty military in respect to financial and legal actions when they are serving. Within those provisions, there is a rule that applies directly to vehicle loans. If a service member finances a vehicle before entering active duty and later falls behind on payments while serving, a lender must obtain a court order before repossessing the vehicle. This requirement exists because military duties can sometimes prevent service members from responding quickly to financial disputes or legal actions.

According to the Department of Justice, the repossessions in the CarMax case occurred without obtaining the required court approval. In some situations, service members had already informed the company about their military status before the repossession took place.

Why These Protections Matter

Losing a vehicle can create serious disruptions for military families. Transportation is often essential for daily responsibilities such as commuting to work, getting children to school, or managing deployments and relocations.

Wrongful repossession can also cause long-term financial consequences. Once a vehicle is repossessed, lenders typically report that negative information to credit bureaus, which makes it much harder for service members to qualify for housing, loans, or future vehicle purchases.

Required Changes Under the Settlement

The settlement with CarMax also requires the company to make operational changes designed to prevent future violations. These measures include enhanced screening procedures to verify whether a customer is in military service, improved employee training on SCRA protections, and compliance monitoring under federal oversight. They also need to assist the affected service members by addressing credit reporting issues linked to the repossessions. CarMax has stated that the settlement does not constitute an admission of wrongdoing but says it has strengthened its internal processes to better identify and protect military customers.

Consumer Protections Still Matter for All Car Buyers

While the SCRA specifically protects service members, the case highlights a broader issue in the auto finance market. Vehicle repossessions, financing disputes, and loan terms can have lasting financial consequences for buyers across the country. Thousands of vehicles are repossessed each year, and misunderstandings about loan terms or lender obligations can quickly escalate into serious legal disputes. When lenders or dealerships fail to follow the law, consumers may have legal options to challenge those actions.

Steven Moskos works with South Carolina drivers facing disputes involving vehicle financing, repossessions, and Lemon Law claims. If you believe a dealership or lender violated your rights during the purchase or financing of a vehicle, contact us so you can better understand what steps may be available to protect you.

Guarding Against Deceptive Car Sales: Understanding Your Rights in Used Car Purchases

3/11/2025

If you prefer, you may listen to this blog post:

When it comes to buying a used car, the road can sometimes lead to unexpected and unwanted detours. A recent case adjudicated in Richland County, South Carolina, gives a good reminder of the illegal practices that can be used on unsuspecting buyers. The case involved Midlands Honda, which was handed a $2.38 million punitive verdict for its failure to disclose the true condition of a vehicle sold at auction.

Recognize the Red Flags

The case centered around a 2003 Honda Civic that was sold as a seemingly intact car but was actually a “clipped” vehicle. “Clipped” refers to a car reconstructed using some very controversial methods after being wrecked. Putting this type of vehicle back on the road creates huge safety risks because of the potential structural weaknesses. Awareness of these types of practices is your first shield against fraud.

DEmand Full Disclosure

Midlands Honda conducted a 159-point inspection certified by Honda, yet the car was sold without any mention of its reconstructed status. Later, when the buyer found out about the damages, the dealership refused a refund, only offering a trade-in deal. Ultimately, the law requires a complete and transparent disclosure of a vehicle’s history before finalizing any purchase. Always ask for a detailed report and verify its accuracy.

Know the Legal Requirements

Our firm represented the Plaintiffs. We were reminded how important it is for buyers to fully understand the laws regarding vehicle sales. The law requires dealerships to inform potential buyers of any significant past damage.The dealership failed in this duty by incorrectly reporting that the vehicle had not been wrecked or reconstructed.

Legal Recourse is Available

The substantial punitive damages award in this case reflects how seriously the state takes these types of fraudulent practices. It serves as a deterrent to other dealerships that might consider deceiving buyers about a vehicle’s condition.

If you find yourself facing a similar situation where the vehicle you’ve purchased has undisclosed or hidden damages, remember you have avenues of recourse. Engaging with a knowledgeable South Carolina consumer law attorney who specializes in lemon laws and auto fraud can get you the help you need so that you aren’t stuck with an unsafe vehicle. We are ready to advocate on your behalf and make sure deceptive sellers are held accountable.

Purchasing a used car should not be a leap into the unknown. By being informed, vigilant, and ready to seek legal help when necessary, you can protect yourself from falling victim to fraudulent car sales practices. If your car purchase takes a wrong turn, contact us to set up an appointment with Steven Moskos and explore your rights under South Carolina's consumer laws.

Why car dealerships are charging above MSRP for new vehicles

1/23/2023

Supply chain issues are affecting everyone, not just consumers. Grocery stores can’t get the products they usually sell, and it’s not unusual now to see signs posted at restaurants warning people that some items may not be available due to low or no supplies. This is even true in the automotive industry, and some dealerships are using this issue to their advantage by marking up the price of their vehicles and not just by a few dollars.

To entice buyers, dealerships often lowered the MSRP, or manufacturer’s suggested retail price, by a couple of thousand dollars, maybe more. This gave the impression that the buyer is getting a real deal. But many dealerships now have jettisoned that practice and are selling vehicles at thousands of dollars over MSRP. Why? Because inventory is lower, and once a vehicle is sold, the wait for another one to take its place on the lot can take months.

While manufacturers aren’t happy with these dealerships’ choices, according to a recent NPR article, there’s little they can do about it as most dealerships are independent franchises and can set the prices they want to set.

Michelle Krebs is an automotive researcher who serves at the executive analyst of Cox Automotive, and she told NPR that this was the first time in her career that she’s seen most dealerships charging at list price or over. That has to do with high demand and low inventory, but also because they can. And sometimes, it’s not just a few thousands of dollars over MSRP. It can be tens of thousands of dollars.

Some manufacturers have even urged dealerships to lower the markups or risk not receiving some of their most desired vehicles. But that hasn’t stopped the markups, and it looks like there won’t be a break anytime soon. So Krebs suggests that anyone looking to buy a new vehicle be willing to practice patience and to go outside their comfort zone, which may mean shopping farther away to get a better deal.

The author of the NPR article found his next truck over 400 miles away from his home but still ended up paying $2,000 over the list price. So, while shopping farther away can lower the price of your next vehicle, for the most part, you can expect higher prices at car dealerships for the foreseeable future.

Carvana has had its second massive layoff this year

12/7/2022

Last month, Carvana, the online car dealership, laid off 1,500 employees, or 8% of its work force, which, according to CNBC, was comprised mainly of corporate and tech departments, although some operational positions were affected as well. Unfortunately, this isn’t the first time Carvana has eradicated positions as in May, the company laid off 2,500 employees, or about 12% of its workforce, citing lagging sales.

This most recent layoff comes after Carvana’s stock plummeted yet again, bringing its overall total down 97% this year alone. Though sales were robust during the pandemic, interest rates have risen, and with fears of an economic shutdown, consumers aren’t as focused on buying vehicles at present.

The layoffs came via an internal email message from Carvana’s CEO Ernie Garcia which was titled “Today is a hard day.” He cited higher finance rates and delayed car purchases as part of the reason for the layoffs and added that the company had “failed to accurately predict how this would all play out and the impact it would have on our business.” Also, in the email, Garcia talked about how the world had continued to get tougher, and that painful choices had to be made to adapt.

The company’s problems have escalated since its rapid growth last year, and now, with $6.3 billion in debt and its stock price dropping like hail, it’s uncertain as to whether Carvana can recover from this freefall. It’s something to take note of if you’re in the market for a car as fewer people on the job can affect everything from customer service to financing.

The Car You Just Bought Was Repossessed by the Dealership. What Can You Do?

3/31/2022

You’re excited about your new car. You signed the paperwork, were handed the keys, and drove away from the dealership believing everything was in order. Because obviously, you wouldn’t have been given the keys and the okay to leave if everything wasn’t okay, right? You were told you were financed and even given the paperwork which you have in the glove compartment of the car. (Reminder: Take that into your house and review the documents to make sure they are all there.)

Then, fifteen days later, or maybe even longer, you get a call from the dealership telling you to bring the car back. What? What are they talking about? It seems the dealership was unable to secure financing so they need the car to be returned. They say they could possibly work out another deal, but until then, they need the car. But you have paperwork showing you were approved for financing. But that doesn’t matter, according to the rather brusque sales manager who is insistent that you return with the car.

But you’re not taking the car back, not when you have proof you’ve been financed. A few days later, maybe less, you walk out of your office at work to discover your car is missing from the parking lot. You call the dealership and are told they now have it in their possession. You were given the opportunity to bring it back but failed to do so. The dealership had no other choice but to repossess it.

Now what? You made a down payment the dealership is telling you is non-refundable which means you’re without the money and the car. You’re going to lose your job if you don’t have a way to get to work. But the dealership has cut off all communication with you. You’re officially on your own. You think there’s nothing you can do. But that’s not entirely accurate.

Depending upon all the facts of your situation, you may have recourse. Back in 2011, the Federal Trade Commission published a white paper “Deal or No Deal: How Yo-Yo Scams Rig the Game against Car Buyers” that details how dealerships work this type of scam, which is called a yo-yo transaction. If you’re in this situation right now, you may want to read the paper and ask yourself if anything in it sounds similar to what is happening to you. If the answer is yes, your next step should be to call a lawyer.

Now, that phone call isn’t a guarantee you’ll get your car back, but it’s the first step in being proactive. Don’t assume there’s nothing you can do until you’ve spoken to an attorney, specifically one familiar with consumer law.

How the Pandemic is Affecting the Number of Cars being Manufactured

9/28/2020

For nearly two months, car production plants around the country were closed due to the pandemic and the need for social distancing. There have also been supply interruptions for parts that are manufactured in China. Starting in mid-July, auto manufacturers were producing again, but some are still running at a reduced production rate due to restrictions.

Most automotive manufacturers cannot produce new cars like they used to. With social distancing restrictions, many have had to lower the number of employees that are in the plant at the same time, and they simply can’t keep up with normal production with a reduced work force.
Even with car manufacturers producing again, it is possible that another outbreak of the COVID-19 virus could disrupt production again. A single supplier of needed parts that has to shut down could cause widespread disruption in production across the country. Also, many automakers stopped producing vehicles and made essential medical equipment, such as ventilators, respirators, and face shields. Some manufacturers are still making the medical equipment instead of vehicles. When the medical equipment is no longer needed, it will take time to get the plants ready to produce cars again.

Supply issues have also been an issue to getting car production back up to full speed. Manufacturers no longer stockpile needed components for their vehicles so they simply don’t have everything they need to start building cars again. They have to wait until parts are shipped, often from out of the country. With concerns about receiving parts from China still very high, many parts are sitting in warehouses until they are deemed “safe” for employees to handle.

Chevrolet, Ford, and Lincoln all canceled or postponed the delivery of new models. Even when production is back up to normal, design and testing facilities are still minimally staffed so it may take several months for new models of cars to be available to the public.

What Fees Can I Expect When I Purchase a New Car?

4/7/2020

Many people know that car dealerships are very good at adding fees to the cost of your new vehicle. These little additions can add up quickly so always question the list of fees you are given when negotiating the price for your new car. You might be able to negotiate a lower fee at times, but be sure to ask about total fees before agreeing to the cost of your car. You don’t want to get a nasty surprise when you look at the finance paperwork and see a much higher price than you agreed on.

Be aware that some fees are regulated by state and local agencies, and you will have no choice except to pay. The most common fees you may be asked to pay usually fall into one of three categories – sales tax, registration fees, and documentation fee. These are usually non-negotiable.

Sales Tax

Sales tax is required on every vehicle purchase and is non-negotiable. The dealer does not set the amount of tax – that is state regulated and must be paid. Make sure to ask whether the sales tax will be included in the amount you finance or if you will be required to pay it when you register your new car. If you can afford it, it is better to pay cash for your sales tax as it will reduce the amount you have to finance and save you interest.

Vehicle Registration Fees

Often, a dealership will register your vehicle for you to save you a trip to the Department of Motor Vehicles. Again, this is a state regulated fee, and the dealer has no control over the amount. This fee covers the registration and title fees for your new car. It will vary, depending on the car you choose – the more expensive your car is, the higher the fees will be.

Documentation Fees

Documentation fees are supposedly meant to cover the cost of the office personnel needed to do the paperwork after you purchase a new car. When examined, this fee looks more like additional profit to the dealer as the dealer is paying an hourly employee to handle several transactions per hour. These fees vary from dealer to dealer. Some states put a limit on how much they can be. Most documentation fees are between $50 - $500. South Carolina does not have a limit on this fee, and documentation fees average around $350 here. Always ask about this fee before you sign any papers as many dealers will not mention the amount until you have signed a contract. You can try to negotiate this fee with the dealer, but expect a fair amount of push back.

Other Fees

Most dealers also charge a small fee based on environmental laws in their area. They will also charge regional advertising fees. All dealers are required to join in regional advertising for dealers in their area. Manufacturers insist on this to help pay for expensive ads that run nationally but point you to your local dealer. Make sure the dealer is not charging for their own advertising. If you aren’t sure, call another dealer in your area and ask them about their regional advertising fees and compare the two amounts.

The reality is every new car purchase will be saddled with fees. You may not be able to negotiate lower fees for certain things, but it never hurts to ask. A dealer may want to move merchandise and be willing to reduce some fees.

When a Dealership Contacts Several Banks for my Financing, Does it Hurt my Credit?

3/25/2020

Often, when a person goes to a dealership for a new car, they let the dealer search for financing options. Most of the time, you have several offers to choose from. It is a known fact that inquires on your credit can cause your credit rating to drop, but does this type of inquiry have any impact?

Timing is Important

The most often used credit scoring systems allow people to shop for the best loan for their vehicle purchase without lowering their credit score. This is done by considering all inquiries for a car loan done within a certain time frame as one inquiry,

Be aware that the time frames may be different. To be safe, you should keep your inquires within a 14 day period. Within this time frame, your inquires should be counted as one or perhaps excluded completely by some scoring systems.

When a dealership sends your application to several lenders, those banks will check your credit score and compete for your business. Every lender that checks your credit will appear as a separate inquiry, but because these will happen in such a short amount of time, it should only count as one. So, you shouldn’t need to worry about dealerships sending your application to many lenders. These inquiries should not hurt your credit score, unless you shop outside of a short time frame.

Before you Shop for a Car

When you think you may be ready for a new car, you need to get a copy of your credit report and make sure there are no errors on it that may prevent you from getting a good deal on a car loan.
Besides checking it for errors, your report will also explain what is in your report that is affecting your score. If you have poor credit, this information will help you improve your score before you try to get a loan and will increase your chances for approval and a better interest rate on your loan.

You may also want to consider getting pre-approved before shopping for a vehicle. This will give you a rough estimate on how much you can spend on a vehicle before you get your heart set on one.

What should I do if I'm blocked in and feeling pressured to buy a car?

7/24/2018

When I started practicing, I heard about car dealers wanting to appraise someone’s trade in. When the dealer got the keys to the car, he would throw the keys on the roof [DC1] of the dealership. The idea was to make the customer feel helpless to the point he felt he had to buy a car.

In a yo-yo transaction, the dealer will require the return of the car if it cannot sell the retail installment sales contract. If a customer comes back to discuss the matter, the dealer may try to block in the car to keep the customer from leaving with it. In this situation, remember, the dealer may be the wrong doer.

Do not become the wrong doer. Don’t start yelling, throwing punches, or damaging cars. The first thing you could do is politely request that the dealership move the cars blocking you. If that does not work, move up the chain to a higher manager. If that does not work, keep moving up until you get to the general manager. I would expect all the managers to support their employees; however, you don’t know until you ask.

The next step might be to call the police. Understand that the police usually do not want to get involved in what they call “civil” matters; however, taking your property might be considered a theft. Hopefully, the introduction of the police will cause the dealer to do the right thing, but it is not guaranteed. If you still can’t get your car, you need to leave and contact a lawyer.

wHEN DOES A CAR DEALERSHIP START LYING TO YOU?

2/21/2017

It might start as soon as you click on the dealer’s website. I was working on a case the other day. I clicked on a dealer’s website. Up popped a dialog box.

“Hello, my name is Alexis. Have a question? I’m online.” Besides sounding like a 1-900 sex oriented ad, when I looked on the staff page, Alexis was no where to be found. I found the picture of the Internet Manager. “He” didn’t look anything like “Alexis’” picture. I felt like I was being “catfished”. What does that say about the ethics of a car dealer? Does it even make a difference to you?

Car Dealers and Dead Donkeys by Ronald Burdge

1/31/2015

We were asked the other day why a car dealer who lied to a customer should have to do anything more than merely take back the car and refund their money. Seems some car dealers and their attorneys think that's enough. Paying "more" means paying what the law calls "punitive damages" and there's a reason for them. I think it was my dad or older brother who first explained to me, years ago, why punitive damages are a necessary part of our society and legal system. It's because of Chuck. Let me explain.

Young Chuck moved to Texas and bought a donkey from a farmer for $100.00. The farmer agreed to deliver the donkey the next day.

The next day he drove up and said, "Sorry son, but I have some bad news, the donkey died." Chuck replied, "Well, then, just give me my money back." The farmer said, "Can't do that. I went and spent it already." Chuck said, "Ok, then, just bring me the dead donkey."

The farmer asked, "What ya gonna do with him?" Chuck said, "I'm going to raffle him off." The farmer said, "You can't raffle off a dead donkey!" Chuck said, "Sure I can. Watch me. I just won't tell anybody he's dead."

A month later, the farmer met up with Chuck and asked, "What happened with that dead donkey?" Chuck said, "I raffled him off. I sold 500 tickets at two dollars apiece and made a profit of $898.00." The farmer said, "Didn't anyone complain?" Chuck said, "Just the guy who won. So I gave him his two dollars back." Chuck grew up and works for a car dealer now.

Punitive damages are necessary to punish those few business people who knowingly do something that's just plain wrong and is so bad that they need to be taught a lesson and made an example of. 499 people paid Chuck two dollars and never knew they were ripped off. When the one who found out complained, why Chuck just paid them off by refunding their two dollars.

Meanwhile, by lieing to everyone (okay, technically he just hid the truth) Chuck made $898 profit off the scheme.

That's why just making a con artist refund your money is not enough. You have to stop the scheme and as long as they make money off the scheme itself, simply making them refund your money won't be enough to make them stop what they are doing. You have to go deeper into their pocket because people like that only understand one thing: money. After all, if they understood right and wrong, they wouldn't be selling raffle tickets for dead donkeys.

Same thing is true of a thieving car dealer who you catch ripping you off. The average car dealer fights hard to keep from taking back a bad car. Why? Because there's an old saying in the business that goes like this "Once it goes over the curb, we don't take it back."

Nowadays, the smart car dealer will argue but then eventually give up and take it back. They argue hard at first to try to avoid taking back the defective car (that's probably a visceral reaction ingrained in the breed, frankly). But if you argue long enough, the smart car dealer will take the car back just to stop your complaining. After all, they know that they can just pawn off the dead donkey on some other guy or gal, who probably won't argue as long or as loud as you do.

And they get away with it. In fact, they make money off it.

Many courts have explained that punitive damages are intended "to discourage others from committing similar wrongful acts." They don't reward the victim for being a victim. They punish someone for being a thief. Why? Because punishment works.

Otherwise, they'll just keep selling raffle tickets for dead donkeys.

If you've bought a dead donkey from a rip off car dealer, we can help. Call us, 1-888-331-6422 Toll Free. Helping consumers get their money back is what we do. Everyday since 1978. Oh yeah, lots of car dealers know who we are and what we do, and that doesn't bother us one bit.

Burdge Law Office
https://burdgelaw.com/
Fighting Fraud Since 1978, One Car Dealer at a Time

Illegal Vehicle Repossessions and Military Protections: What Car Buyers Should Know

A DOJ Settlement Over Repossessed Vehicles

The Servicemembers Civil Relief Act and Vehicle Repossessions

Why These Protections Matter

Required Changes Under the Settlement

Consumer Protections Still Matter for All Car Buyers

Guarding Against Deceptive Car Sales: Understanding Your Rights in Used Car Purchases

If you prefer, you may listen to this blog post:

Recognize the Red Flags

DEmand Full Disclosure

Know the Legal Requirements

Legal Recourse is Available

Why car dealerships are charging above MSRP for new vehicles

Carvana has had its second massive layoff this year

The Car You Just Bought Was Repossessed by the Dealership. What Can You Do?

How the Pandemic is Affecting the Number of Cars being Manufactured

What Fees Can I Expect When I Purchase a New Car?

When a Dealership Contacts Several Banks for my Financing, Does it Hurt my Credit?

What should I do if I'm blocked in and feeling pressured to buy a car?

wHEN DOES A CAR DEALERSHIP START LYING TO YOU?

Car Dealers and Dead Donkeys by Ronald Burdge

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Archives

Categories

A DOJ Settlement Over Repossessed Vehicles

​The Servicemembers Civil Relief Act and Vehicle Repossessions

Why These Protections Matter

​Required Changes Under the Settlement

​Consumer Protections Still Matter for All Car Buyers

If you prefer, you may listen to this blog post:

​Recognize the Red Flags

DEmand Full Disclosure

​Know the Legal Requirements

​Legal Recourse is Available

follow our blog!

Archives

Categories

The Servicemembers Civil Relief Act and Vehicle Repossessions

Required Changes Under the Settlement

Consumer Protections Still Matter for All Car Buyers

Recognize the Red Flags

Know the Legal Requirements

Legal Recourse is Available