THE IMPORTANCE OF AN "AS-IS" CONTRACT
An "AS-IS" contract is simply some type of written indication that a car is sold like it is without any type of warranty. An "AS-IS" sale is truly "buyer beware".
This is one of the most important documents when selling a used car, yet dealers tend to overlook its significance. Personally, I will never sell cars unless they are sold "AS-IS" because we all know that used cars can break down at any moment even if they are not running perfectly at the date of sale.
If you are ever taken to court, the judge decides who wins by looking at who has more evidence. Clearly, if you have proof that the car was sold "AS-IS", you will win every time.
The contract itself can be as simple as the two words "AS-IS" written in your own handwriting on a receipt, or it can be a page-long fancy contract.
Dealers typically purchase ready-made contracts at dealer auctions or form supply companies. The problem with page-long contracts is the dealer will often not know what the contract provides. The dealer could very well be offering a contract that contains small clauses that can be turned against him in court. Therefore, sometimes "simpler is better" when it comes to "AS-IS" contracts. In fact, a properly checked "AS-IS" box on the federally required "Buyer's Guide" is more than enough evidence of an "AS-IS" sale. (Unfortunately, many dealers sell cars without displaying these "Buyer's Guides" in the windows of their cars.)
WARNING: If the person suing you can prove you committed fraud or misrepresentation the court will "tear up" the "AS-IS" contract.
Here are some examles of possible fraud or misrepresentation that can nullify an "AS-IS" sale if the person suing can prove it:
1. Telling the buyer the engine was rebuilt when it actually was not.
2. Telling the buyer the car was never in an accident when it actually was.
3. Telling the buyer that the A/C needs a recharge when it actually needs a compressor.
4. Representing to the buyer the car has less mileage than it actually has.
Also, if you even hint at a warranty, the judge will nullify an "AS-IS" sale. Here are some examples:
1. Telling the buyer you "guarantee" nothing will go wrong.
2. Telling the buyer if the transmission fails you'll buy the car back.
3. Telling the buyer if anything goes you'll "take care of it".
Note: The term "puffing" is a sales tactic that courts allow dealers to get away with! Here are examples of "puffing" that dealers can legally say with no consequences:
1. Telling the buyer "Everything runs perfectly".
2. Telling the buyer "My mom drives one of these".
3. Telling the buyer "It will last forever".
4. Telling the buyer "It will go well over 200,000 miles".
5. Telling the buyer "This car is the best running car on the lot".
Note: This is not intended to constitute legal advice. For legal advice, please seek a competent attorney.