Common Sense Tips on Cars: Even A Real Estate Attorney Can Help

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Quite frequently, my real estate and litigation clients call me to ask "just one quick question" about this and that.  Often, it has to do with work issues, car or insurance matters.  My last round of quickies had me thinking about car insurance and car buying, and so that my client's bad luck does not flow in your direction, I share with you some words of wisdom, from the Chicago trenches.

When purchasing a car, we often look in magazines and online, to find the best price for the car in the best condition. We often see BMW's or Fords or whatever kind of make and model, all shiny and clean, and we immediately see stars in our eyes when the purchase price is shown.  Low mileage aside, this is an easy way to get burned.  When purchasing a car from a private party, you must remember that you can always buy a lemon, and private parties rarely have money in the event your car is a lemon and you decide to sue them.  My Client "M" purchased a car from a family in the suburbs.  She had it checked out by the mechanic and she looked at a CarFax report, thinking that both steps had her protected.  Then, a year later, she accidentally backed into a State of Illinois light pole and damaged her rear bumper significantly.  Upon trying to make a claim to her Class B insurance company (you know, the kind that have those lame radio and tv ads about SR-22's, etc?), they informed her that they refused to repair the car as the title report showed it was a salvaged vehicle, and that even though it was worth $6,000, they would offer her $2,000 in exchange for her deductible payment plus her title.  Signing over the car?  What?  Further inquiry has revealed that this "company" is not even a valid insurer, and the party making the $2,000 offer is an unrelated broker entity.  How did she get into this mess?  A lemon car, that was technically functional but had a fraudulent title report?  This sounds bad.  Why?  Because even if she fixes the bumper out of pocket, Miss M will have a hard time selling the car to someone else, or even trading it in to a dealership later.  How can this be avoided?  Personally, the easiest answer is often the one that sounds most harsh.  This attorney says:  don't buy cars from private parties!  Harsh, yes.  Does it screw the little guy wanting to be rid of his old vehicle?  Potentially.  BUT, when you think of why you have a car, and the important cargo it carries, can you afford to buy a vehicle from an individual who has no resources if you sue, or who did not follow the law in terms of titling the vehicle?  Best to avoid these pitfalls and rely on the good name of a reputable dealer.  These entities have to be licensed, they carry insurance, and they certify cars.  Are you going to sue little old Mrs. Smith down the road because she sold you a 1987 Honda and the brakes go out and you crash?  Probably not.  And why is that?  Because Mrs. Smith doesn't have any money, and you probably paid less than a few thousand for the car, expecting that it would not be as good as the new Honda you wanted.  Back to Ms. M.  Her dilemma was best avoided by purchasing a used car from a dealer, and she was told in no uncertain terms, to rely on the disclosures made by people not in the auto business.  Because they don't know what laws apply, they don't have the resources to find out, and they - like most people - just want to deal in cash and get the deal done.  Sounds fine for some, but in the end, can cost you your bumper, if you are not careful.

So, tips for you to take away:

  • Car Buying and Selling Should be Left to Professionals
  • Know the law in your state, and know what a seller is required to tell you (and required to know) about a car's history
  • Obtain and double-check a vehicle CarFax Report
  • Obtain two estimates on the condition of the car from a trusted mechanic
  • Know the reputation of the dealer you are working with (have they been sued, do they sell lemons?)
  • Are they incorporated and does the entity appear to be solvent?
  • If buying from a private party, do you have a contract?  You need one - so don't be so quick to hand over the case.  There are consequences if you don't get what you paid for.
  • Get and keep the name, address and phone number of the party from whom you buy the car - you may need it!

Other than "Be Careful", it's always best to approach car buying with ease and caution.  it's an important purchase, and one that requires some careful documentation.  Gone are the days when you can trade $1500 cash for a 1981 Toyota (like I did at one point in my life), and expect anything further.  We live in a sue-happy place.  That may be because we like our court-shows.  However, it can also be because a lot of people are doing a lot of things wrong.  As such, slow and steady is the way to win.

For more common sense practicalities, feel free to contact me at [email protected].