Sue both of them and let them point the finger at each other. Your suit should come out of an action of fraud, misrepresentation and the consumer protection act. There may be other actions also.
Dealers often will hide behind a supposedly "clean Carfax" even though they know the vehicle they are selling was previously wrecked (and sometimes they look for these vehicles because they know they can still be sold at a premium). Carfax itself says that its reports are not to be relied upon.
A dealer that knows or reasonably should know about prior damage to a vehicle (especially a prior total loss), and that fails to disclose this to a purchaser, touches on many legal areas: unfair and deceptive practices, fraud, and warranty to name a few. Whether you have a claim (and how strong that claim is) depends on a lot of things: what took place during the sales process, the nature of the prior damage (total loss obviously indicates the damage was severe - although states have varying definitions of what constitutes a total loss); whether the damage was repaired properly; how obvious the damage was; and what the dealer knew at the time it sold the vehicle (where did the vehicle come from, were there any disclosures made to the dealer, or pre-sale inspections made by the dealer, etc).
You will certainly want to have the vehicle looked at by a competent body shop who can tell you the nature and extent of the damage and prior repair work, and whether the vehicle is currently safe to drive. Needless to say, these cases get complicated. I recommend speaking to an experienced auto fraud attorney in your state who can look at the sales paperwork and other facts, advise you of your options, and help determine what steps need to be taken to investigate your issue.
You are fortunate to live in a state with some highly experienced auto fraud attorneys who may be able to help. Check out the National Association of Consumer Advocates (www.naca.net) for referrals.
Thanks for the question, and best of luck on getting this resolved.
The attorney responding is licensed only in the state of North Carolina. This response does NOT constitute legal advice and does NOT create an attorney/ client relationship! Rather, the response is in the form of legal education and is intended to provide general information about the matter in question. Although a response is provided to the specific question, there may be other facts and law relevant to the issue that the questioner has left out and which would make the reply unsuitable. Therefore, the questioner should not base any decision on the answer, but should confer with an attorney in person about the specifics of his or her case.
Michigan has a Udap law that may help you sue the dealer in your situation but you should talk to a local lemon lawyer to find out for sure how your state laws work and what your rights are. Michigan has several very good lemon lawyers and you can find their contact info at www.USLemonLawyers.com. But act quick because you may lose important legal rights two years from the sale date.
This answer is for general purposes only and does not establish an attorney-client relationship. The law in your state may differ and your best answer will always come from a local attorney that you meet with privately. For a Free Online 50 State National List of Consumer Law Lawyers, click on this link (http://tinyurl.com/79ku5jx) and find one near you
I agree with attorney Carter. Sue both parties and let the judge sort it out. You don't want to be in a situation in court where the dealership is allowed to blame Carfax, and no one is there to dispute the claim.
Also, if your vehicle qualifies, the Michigan Lemon Law provides for attorney fees. Contact a local attorney like myself that has had success in suing dealerships and car manufacturers in the past.