Definition of loss according to law
A legal loss is a definition that determines the condition of the vehicle. A legal loss vehicle is a vehicle that was involved in a serious accident and the cost of repairs was estimated by an appraiser on behalf of the insurance company at an amount ranging from 45 - 59 percent of the vehicle's value.
In cases where the vehicle has been declared a loss vehicle, the insurance company does not repair the vehicle but sells it to a third party, usually a car dealer.
The car dealer usually repairs the vehicle in garages that are not affiliated with the car importer, and sometimes in garages in the Palestinian Authority, in order to save costs, and ultimately sells the vehicle at a very handsome profit, because externally the vehicle can look like a completely new vehicle.
In most cases, car dealers do not inform the buyer that they Buying a legally lost vehicle, and the vehicle owner usually discovers this only at the stage when he decides to sell the vehicle, and the next buyer performs an inspection of Insurance claims historyThis is usually the stage where the buyer considers filing a lawsuit against a car dealer for selling a vehicle that is legally a loss.
Lawsuit against used car dealer Regarding the sale of a legally lost vehicle, this is a matter that comes to the attention of Attorney Eddie Blitstein on an almost daily basis. Attorney Blitstein has already filed countless lawsuits against used car dealers in this matter, and his extensive experience in this field allows him to help his clients win these lawsuits.
What is the danger in purchasing a legally lost vehicle?
There are two main dangers when purchasing Legally lost vehicle:
- You are driving a vehicle that may be unsafe or have many mechanical problems. – After an accident, these vehicles are not repaired in the vast majority of cases by authorized garages that are careful to repair the vehicle according to the manufacturer's instructions, but rather by garages whose sole purpose is to make the vehicle drive and look new. There is no care in repairing the vehicle according to the manufacturer's instructions, and with replacement parts approved by the manufacturer. This may lead to the buyer of the vehicle actually driving an unsafe vehicle or a vehicle that will suffer from many mechanical failures, because it was not repaired properly in the first place.
- You buy a car at list price or near list price, even though it's worth much (much!) less. – Car dealers and even private individuals who sell vehicles that have been declared a loss are in no hurry to reveal to the buyer that the vehicle has been involved in a serious accident, and they trust that not everyone will check the vehicle's insurance claims history (not everyone is aware of this possibility in the first place). The reason sellers do not disclose details about accidents is to sell the vehicle at the highest possible price and make as much money as possible on each vehicle. When the vehicle buyer wants to sell the vehicle, he will find that no one will want to buy it because it is declared a loss, and even if someone does want to buy it, they will offer much, much less than the list price (usually about 50% of the vehicle's value and sometimes even less).
בשלב מכירת הרכב המוכר אדיש לסיכונים אלה ולא אכפת לו שהקונה "נדפק". כשמדובר בסוחרי רכבים יש להם תמריץ כספי גדול יותר כי ככל שהם ימכרו יותר רכבים כאלה הם פשוט ירוויחו הרבה יותר כסף (ומדובר בסכומים משמעותיים מאוד). זאת הסיבה מדוע ביחס לסוחרי רכבים יש סיכוי הרבה יותר גבוה שיותר ויותר רוכשים יגישו תביעה נגד סוחר רכבים בגין מכירת רכב אובדן להלכה, כי פשוט יש יותר נפגעים פוטנציאליים.
What does the court ruling determine regarding the obligation of a car dealer regarding the sale of a legally lost vehicle?
In order to file a lawsuit against a car dealer for selling a vehicle that is legally lost, it is highly recommended that you seek the services of a lawyer who is familiar with the relevant case law and legislation, and who has actually handled and won lawsuits against car dealers. Not every lawyer can represent you well in these lawsuits, and choosing the wrong lawyer may be the difference between winning and losing in these types of lawsuits.
Court rulings always refer to the provisions Used Car Sales Law (sometimes also known as Due Disclosure Law) which requires the seller to deliver to the customer Disclosure Form Even before the customer signs the vehicle purchase documents and even before the customer pays and transfers the money for the vehicle.
This form requires the car dealer to provide written details of any defects in the vehicle or accidents the vehicle has been through, and also to state the number of kilometers the vehicle has traveled until it is sold (helps deal with situations where Vehicle mileage falsification).
סוחר רכבים שלא גילה לרוכש שהוא מכר לו רכב אובדן להלכה, לרוב "יחטוף" בבית המשפט ובית המשפט יורה על Canceling a used car transaction, and will refund the buyer's money. In addition to canceling a transaction, the court may determine that Car dealer to compensate car buyer due to legal loss of car purchase.
The court's ruling explicitly states that what is important in these cases is the advertising stage. In other words, if the car dealer published an ad online in which he did not state that the vehicle he was selling was legally a lost vehicle, in order to entice the customer to contact him, at this stage there is already a deception that makes it possible to demand the cancellation of the transaction.
From a legal perspective, it also does not matter if the dealer later informed the customer that the vehicle was legally lost. Informing the customer at a later stage does not negate the deception that has already occurred.
בעניין זה כדאי להכיר את פסק הדין בו הממונה על הגנת הצרכן הטיל עיצומים על סוחרת רכבים שלא גילתה לרוכשי רכבים שהיא מוכרת רכבים שהוגדרו אובדן להלכה (עש"א 28488-05-25 נטלי כהן נ' משרד התמ"ת – הממונה על הגנת הצרכן). במקרה זה נקבע על ידי בית המשפט, בין היתר, כך:
The fact that a vehicle has been declared legally lost is a fundamental matter that the dealer must mention when advertising the vehicle, while I do not accept the claim that in light of various reasons for classifying a vehicle as such, the dealer should be exempted from this.
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And with regard to vehicles, presenting misleading or incomplete information to the consumer before presenting him with the full disclosure form is likely to mislead him in the sense of reducing his attention and alertness with respect to what is listed in the form. (עש"א (שלום חי') 49649-03-24 י.ח.ד. מוטורס בע"מ נ' הרשות להגנת הצרכן ולסחר הוגן, סעיף 76 (7.7.2024); וראה גם: עש"א (שלום ת"א) 60365-09-22 דומיקאר בע"מ נ' הרשות להגנת הצרכן ולסחר הוגן , סעיף 16 ( 13.12.2023).
Therefore, the Consumer Protection Law establishes a normative threshold that applies to all those engaged in sales or service industries. In order to deal with the inherent power and knowledge gaps between the trader and the consumer, the trader is obligated to avoid misleading the consumer at a higher threshold than the threshold set in the Contracts Law and is obligated to a high level of disclosure even at the advertising stage, which is what this appeal is about.
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The appellant advertised on a vehicle network that it sells as vehicles that are supposedly completely in good condition, with no insurance or safety record, when in fact these are vehicles that have been declared legally lost. By violating its duty to disclose that material detail, the appellant misled potential buyers and enticed consumers to enter into a transaction when some of them may not have entered into one if they had known that these were vehicles that had been declared legally lost. The mere advertising constitutes a violation of the Consumer Protection Law, and the fact that it presented them with a proper disclosure form at the time of the transaction does not reduce or negate it.
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The appellant does not operate its business without the intention of profit. The mere advertising without specifying that the vehicle was a loss was done in order to attract more and more customers to the business, and needless to say, increasing the volume of potential customers means increasing financial profit. It must be assumed that at least some of those potential customers would not have come to the appellant's lot if she had indicated in the advertisement that it was declared a total loss., as the appellant's partner himself admitted during the appeal hearing (page 3, lines 4-8). As for the claim that if the appellant had wanted to make a financial profit, she would not have signed a disclosure form, first of all, this is illegal conduct; and beyond that, it has already been noted that the fact of increasing the flow of customers due to the advertising increases the likelihood of conducting transactions despite the disclosure form and in any case results in financial profit.
What can you demand in a lawsuit against a car dealer who sold you a legally lost vehicle?
In the event that you discover that a car dealer sold you a legally lost vehicle without disclosing this as required, you can demand 3 main remedies in a lawsuit against a car dealer who sold you a legally lost vehicle:
- Transaction cancellation – You return the vehicle to the car dealer and the car dealer has to refund your money.
- Financial compensation – The monetary compensation is intended to compensate you for the damages you have suffered. These can be monetary damages (for example, amounts of money you actually paid for repairing the vehicle’s faults), andNon-pecuniary damages (Mental anguish).
- Reimbursement of legal expenses – Since you will usually be required to file a lawsuit against the car dealer, you will incur expenses such as: Lawyer's fees, Court feeIn some cases, even payment for Expert opinion In the automotive field or a car appraiser (in very exceptional cases). You may demand reimbursement of these expenses from the car dealer. The court will decide whether you are entitled to a full refund, a partial refund or whether you may not be entitled to a refund at all.
It is very important to contact the car dealer in writing immediately or very shortly after you discover that he sold you a legally lost vehicle and demand the cancellation of the transaction. In the vast majority of cases, the car dealer will not agree to this and you will be forced to file a lawsuit against the car dealer for selling a legally lost vehicle in court.
In conclusion
Legal loss is a definition for a vehicle that has been in a serious accident and the insurance company is not able to repair it. In these cases, the insurance company sells the vehicle to a car dealer who repairs the vehicle not in accordance with the manufacturer's instructions, in order to save costs, and then sells the vehicle to another person. The car dealer will not always disclose to the buyer that he is selling them a vehicle that is legally lost.
Court rulings tend almost universally to cancel transactions of this type if it turns out that the car dealer did not inform the vehicle purchaser as required and in accordance with the provisions of the law about the true condition of the vehicle.
If the car dealer does not agree to cancel the transaction before filing the lawsuit, within the framework of the lawsuit the buyer may demand the cancellation of the transaction, financial compensation, and reimbursement of legal costs.
