Buyers of Used Cars Weren’t Told, Suit Says : D.A. Sues 4 Dealerships Over Former Rentals

When Paul Neathery of Buena Park discovered that the used 1987 Lincoln he bought last year from a Fullerton car dealer had previously been driven as a rental, he was not a happy customer.

As a former employee at a major car-rental agency, Neathery had seen first-hand “the abuse that rental cars receive from those who drive them,” he said in a court declaration. And if he had known that his car was among that lot, Neathery says he would never have bought it.

He was among more than two dozen local customers who complain that they did not get the cars they had banked on, the Orange County district attorney’s office charged Wednesday.

In a civil action filed in Superior Court in Santa Ana, the office’s consumer protection unit charged that four Fairway car dealerships in Orange County had failed to tell unwitting buyers that some of their used cars had been driven as rentals. Such notification is required by state motor vehicle codes.

In some cases, salespeople at the Fairway dealerships told “outright lies” to make prospective buyers think that they were getting low-mileage, “executive” cars driven by rental-company officials, demonstration models or used cars driven by a single owner, Deputy Dist. Atty. Wendy Brough said in an interview.

The civil charges were brought against the Fairway dealers after the Department of Motor Vehicles conducted a random registration and sales check on the history of used cars sold by Fairway and other dealers. The inquiry, prompted by a customer complaint, identified 29 Fairway customers who had bought rental cars but said they were not informed of that fact.

At least three other local dealerships are also being investigated for similar allegations.

John D. McGuire, an attorney for the Fairway dealerships, said in an interview that the company’s sales people did inform car buyers verbally that the used cars had been rentals, if that fact was known. In some cases, he said, the dealer buys the car at auction and has no way of knowing its history.

Fairway dealers “have always prided themselves on selling a good product and following the law, and this is really an insult to their integrity,” he declared.

“No one’s really been hurt,” McGuire said. “When you really unwind this thing, the customers got what they paid for.”

Indeed, none of the 29 customers cited by the district attorney’s office complained about the condition of their cars. They said, however, that they felt deceived because they thought they were buying a different car.

Citing a fear that rental cars would not have been well-maintained, most customers said they would not have bought their cars if they had known their true history. A few said they would have paid several thousand dollars less.

By leading the customers to believe that they were buying standard used cars instead of rentals, Brough said, the Fairway dealers “were exploiting the feelings of many people that non-rentals would be maintained better.”

The district attorney’s office is asking the court in its civil action to order Fairway to compensate the unknowing customers and to pay fines that could amount to $2,500 for each case cited. Fairway turned down an offer from the district attorney’s office to settle the dispute out of court for about $200,000, McGuire said.

The district attorney is also seeking an injunction that would bar Fairway from such deceptive practices in the future. But McGuire said the injunction is a moot point, since Fairway has already instituted a new policy requiring that all rental cars be marked and that all buyers sign forms stating that they knew the history of their cars.

Fairway has Toyota and Lincoln-Mercury dealerships in Fullerton, as well as Ford and Volkswagen dealerships in Placentia.