Used Car "As-Is" Warranty Disclaimers
A Michigan court determined that oral representations made by the car dealer's salesman to the buyer that the car “had been inspected by the dealership and had been found to have no mechanical problems or deficiencies" did not create an express or implied warranty, because the car was sold with a written As-Is No-Warranty disclaimer. But the court did find in favor of the buyer for other reasons...
Because the car broke down so quickly after the sale, the buyer did have viable claims for fraud and violation of the Michigan Consumer Protection Act (similar to the Florida Deceptive and Unfair Trade Practices Act).
The court held that a reasonable jury could find that the dealership fraudulently informed plaintiff that the automobile had been inspected by the dealership and had been found to have no mechanical problems or deficiencies, and that there was sufficient evidence to support a claim under the Michigan Consumer Protection Act that the dealership represented that the car had characteristics or a quality that it did not have.
The court reasoned that the “as is, no warranty" provision is inconsistent with a claim that the dealer provided an oral warranty that the vehicle is free of mechanical problems, because a vehicle with a warranty cannot be sold as is.
However, an allegedly false assertion that a car has been inspected and found free of mechanical problems is not inconsistent with an “as is, no warranty" provision, because a vehicle can be sold “as is, no warranty" after an inspection is performed and reveals no problems.
Summarizing the facts of on appeal from the Grand Traverse Circuit Court (Case No.: 09-027524-NZ) in Williams v. GMAC the buyer asked the salesperson at Williams Chevrolet for a “safe and reliable used vehicle," the salesperson showed the buyer a Cadillac, and told him that the car “had been inspected by the dealership and had been found to have no mechanical problems or deficiencies." Buyer relied on the salesperson when he decided to purchase the vehicle. Buyer drove the vehicle approximately 80 miles back to his residence, the service engine light came on and the vehicle began lurching. Buyer took the vehicle to a nearby GM dealership, where a mechanic performed a throttle body cleaning and replaced the fuel filter. Shortly thereafter, the vehicle “suffered … another mechanical failure" and was towed to another repair shop, where more repairs were completed. Buyer claimed that the mechanics at the second repair shop told him that had the dealership performed a proper inspection, it would have recognized that the vehicle required these additional repairs.
Dani Liblang a Michigan lemon law attorney and member of the National Association of Consumer Advocates, represented the car buyer in this case.