Paying more for certified pre-owned car doesn't always protect you

One woman found out her car was a total loss
Posted at 10:07 PM, Mar 27, 2018
and last updated 2018-03-28 16:25:12-04

She bought a used car from a Milwaukee area dealer only to find out later it was totaled in an accident. Now a Wisconsin woman is suing that dealership.

The car was sold as a certified pre-owned vehicle, meaning it's supposed to meet strict inspection standards. But a new lawsuit alleges the dealership knew the car was a total loss when they sold it.

350,000 used cars are sold every year in Wisconsin, and Kristen Chize thought she found a great deal on a used Volkswagen.

"It's sporty, gets good gas mileage," she said.   

Until she went to trade it in. Kristen just discovered she's upside down in the car.  

"It's just not worth the amount I paid for it," she said. 

She bought the car about a year ago for around $19,000. She still owes $16,000 on her loan.  The highest offer she got for the car was $6,000.

A CARFAX report from January shows why those offers were so low.  It was deemed a total loss vehicle.  The VW was in an accident in November 2016.

It was declared a total loss vehicle by American Family Insurance in February of 2017. Kristen bought the car in April of 2017.  The accident was reported to CARFAX about three months later.

But a lawsuit filed this month by Kristen's attorney claims Boucher Volkswagen in Franklin knew about the accident when they sold her the car.  

Consumer attorney, Gordon Leech says his expert inspected the car and put its actual worth when Kristen bought it at $9,300.  That's about half of what she paid for the car.  Leech also claims the dealership misled Kristen by showing her what was, at the time, an accident-free CARFAX report.

"By saying it's a clean CARFAX is a further misrepresentation. Trying to make the consumer believe that there's no accident history with the car," Leech said. 

According to the lawsuit, when the dealership bought the car from a Midwest auction house the title was owned by American Family Insurance.  

"The only reason that that car would be transferred over to an insurance company is if there had been a claim paid on a total loss," Leech said. 

In the lawsuit, Leech claims Boucher, "would have seen the damage or repairs when performing a standard industry pre-purchase inspection."

The VW was also sold as a certified pre-owned car.  Which according to Boucher's website means it was "rigorously tested and meticulously inspected."

Boucher's attorney told us when it bought the car at auction, the seller did not list it as a total loss vehicle, and the title that came with the car was clean.  If it was a total loss or salvage, it should be stamped on the title.  Boucher also claims the VW showed zero evidence of any structural damage.

Kristen is pregnant and needs a vehicle to fit a growing family, "we need a bigger car that fits five."  But for now, her car shopping is on hold.

Boucher's attorney also told us the manufacturer, in this case, VW, issued the certified pre-owned designation on the car, not the dealership.  He says both the sales team and Kristen are victims in this case.

Last week Boucher offered to buy back the vehicle for what Kristen paid for it and cover some of her attorney fees.  No word yet if she plans to accept.

If you are shopping for a used vehicle, figuring out its true history can be difficult.  

Always ask if the car's been in an accident.  Try to get service records for the car, and it's a good idea to have it inspected before you buy.

You should also check CARFAX but, as our story points out, that doesn't always give you an accurate history.  If an accident is never reported to police or an insurance company it won't show up.  CARFAX also states on each report it's not responsible for errors or omissions since it relies on information from its sources. 

AutoCheck is another source to check when buying a used car.

For more tips on buying a used car click here.