Selling a legally lost vehicle – can the vehicle be returned to the seller?

What is the problem when selling a legally lost vehicle?

Before we understand what the problem is when selling a lost vehicle, we must first understand what it is. Legally lost vehicleA loss vehicle is technically a vehicle that has been in a serious accident and the cost of repairing it may reach up to almost 60% of the vehicle's value.

If the vehicle is insured by an insurance company, the insured receives the insurance money and the insurance company receives the damaged vehicle. Insurance companies sell these vehicles to car dealers who sometimes repair these damaged vehicles in the territories, And without any care Vehicle repair According to the manufacturer's instructions, and then these vehicles are sold in the territories of the State of Israel.

A lost vehicle may appear completely new after repair on the outside, but it is very possible that it is damaged and not properly repaired in its internal parts, which cannot be seen by an unprofessional eye, or without appropriate equipment.

The more serious problem is that these vehicles sometimes have serious safety defects. For example: The airbags may not have been repaired properly and may not work at all. In many cases, this defect cannot be detected, especially if you take care to disable the airbag light.

Selling a legally lost vehicle to a buyer who is unaware of this can harm him not only financially, but also from a safety perspective.

The seller's profit when selling a vehicle is a legal loss.

It's easy to see why selling a legally lost vehicle without disclosing this detail to the buyer is so appealing to sellers. The sellers manage to sell the vehicle quickly and pocket huge profits. If those sellers had bothered to state in their online ads that they were selling a legally lost vehicle, no one would have bothered to call them, and certainly no one would have agreed to buy the vehicle at the asking price.

In the case of car dealers, the issue is even more pronounced because they will do everything possible to convince you that there is no need to perform vehicle inspections, not even a simple check of the vehicle's insurance history which can be checked instantly online using Infocar website, for only 10 shekels. This check will immediately reveal to you which insurance companies the vehicle was insured with, when an accident occurred that was reported to the insurance company, and whether the vehicle was previously classified as a legal loss vehicle or not.

If you come across a car salesperson who is trying very hard to get you to forgo performing vehicle inspections, including checking the vehicle's insurance history, a red light should go off for you and you should strongly consider avoiding the purchase, even if you like the vehicle very much and it is being offered to you at some discount.

If you purchase the vehicle and discover in retrospect that it is a lost vehicle, it will not be easy to cancel the transaction and you will usually have to file a claim. Lawsuit against a car dealer or against the individual who worked for you. It is important to know that you can file a Lawsuit against a car dealer for selling a legally lost vehicle and receive financial compensation, and even Canceling a used car transactionYou can use the example of A lawsuit against a car dealer for selling a legally lost vehicle which is on our website.

Does the seller have to disclose that he is selling a loss according to the law?

The sale of a salvage vehicle must, in principle, be carried out with full transparency and the seller must disclose this essential detail to you. Failure to disclose in the sale of a vehicle Used (or even new) can lead to very significant sanctions against the seller, And it will almost always lead to financial compensation for the buyer they worked on.

Sale of a legally lost vehicle by a car dealer

Car dealers are subject to regulations Used Car Sales Law (People without legal knowledge refer to it as Due Disclosure LawAmong other things, this law requires the car dealer to sign the buyer's (and not just verbally disclose) Disclosure FormA proper disclosure form looks like this:

When selling a legally lost vehicle, the car dealer is required to state in the due disclosure form that the vehicle being sold is a legally lost vehicle. Failure to state this material detail will often lead to the filing of a Lawsuit against a car dealer for selling a legally lost vehicle, within the framework of which the buyer will be able to demand cancellation of the transaction (along with financial compensation and reimbursement of legal costs).

Sale of a legally lost vehicle by a private individual

It is not only car dealers who hide the fact that they are selling legally lost vehicles, but also private individuals. The motive is the same – even a private individual understands that it will be very difficult, if not impossible, for him to sell a legally lost vehicle, and therefore there will be those who will hide this detail in order to sell the vehicle more easily, and for a much higher price.

Unlike a car dealer, an individual is not obligated to have the buyer sign a due diligence form, but This does not mean that an individual is not obligated to disclose this information. to the purchaser orally or in writing (for example: within the framework of Car sales contract).

An individual who does not disclose to the buyer that he is about to purchase a salvage vehicle is legally violating many provisions set forth in the Contract lawFor example, the duty to act in good faith when conducting negotiations:

12 (A) In negotiations leading up to the conclusion of a contract, a person must act in an acceptable manner and in good faith.

(on) צד שלא נהג בדרך מקובלת ולא בתום-לב חייב לצד השני פיצויים בעד הנזק שנגרם לו עקב המשא ומתן או עקב כריתת החוזה, והוראות סעיפים 10, 13 ו-14 לחוק החוזים (תרופות בשל הפרת חוזה), תשל"א-1970, יחולו בשינויים המחוייבים.

Selling a lost vehicle may allow the buyer to claim a mistake in the transaction or even deception. These two claims may allow the transaction to be canceled, as stipulated in the Contracts Law:

14.(a) A person who entered into a contract due to an error and it can be assumed that without the error he would not have entered into the contract and the other party knew or should have known about it, is entitled to cancel the contract.

(on) If a person who entered into a contract due to a mistake and it can be assumed that but for the mistake he would not have entered into the contract and the other party did not know and should not have known about it, the court may, at the request of the party who made the mistake, cancel the contract, if it deems it just to do so; if it does so, the court may order the party who made the mistake to pay compensation for the damage caused to the other party due to the conclusion of the contract.

(third) An error is not a ground for rescission of the contract under this section, if the contract can be performed by correcting the error and the other party has notified, before the contract is rescinded, that he is willing to do so.

(d) "טעות", לענין סעיף זה וסעיף 15 – בין בעובדה ובין בחוק, להוציא טעות שאינה אלא בכדאיות העסקה.

15. A person who entered into a contract due to an error resulting from deception by the other party or someone else on his behalf may cancel the contract.; לענין זה, "הטעיה" – לרבות אי-גילוין של עובדות אשר לפי דין, לפי נוהג או לפי הנסיבות היה על הצד השני לגלותן.

In certain cases (and relatively rare ones), the sale of a lost vehicle may in principle lead to a claim of abuse, and the cancellation of the contract under Section 18 of the Contracts Law:

18. A person who entered into a contract due to exploitation by the other party or someone else on his behalf of the contracting party's distress, mental or physical weakness or his inexperience, and the terms of the contract are unreasonably worse than what is customary, he may cancel the contract..

What can the injured party do after selling a legally lost vehicle?

After selling a lost vehicle, the injured party generally does not have many options. He can ask the seller to agree to cancel the transaction (it is better to do this in writing, such as Warning letter), and the seller will never agree, and the second option is to submit Claim To the court, where the injured party can demand cancellation of the transaction, significant financial compensation, and reimbursement of legal costs.

After filing a claim, the seller must submit DefenseOtherwise, it will be possible to ask the court to accept against the seller Judgment in the absence of a defenseAs part of the defense, the defendant will be forced to detail and, at a later stage, also prove how he discovered to you that this was a transaction for the sale of a legally lost vehicle.

In the vast majority of cases, if the defendant does not present a written document signed by the buyer that explicitly states that the buyer knows that he is purchasing a legally lost vehicle, the defendant will lose and the court will rule in favor of the buyer. In these cases, the court is expected to order the cancellation of the transaction (return of the vehicle to the seller and return of the money to the buyer), financial compensation in an amount determined by the court, and the return of Legal expenses (The amount the plaintiff had to pay to conduct the lawsuit).

In conclusion

Selling a legally lost vehicle without disclosing this to the buyer is a violation of the duty of disclosure. This information is often concealed in order to sell the vehicle faster and for a higher price.

Failure to disclose the fact that the vehicle is a lost vehicle legally allows the buyer to file a lawsuit in court and demand cancellation of the transaction and additional remedies. Usually, before filing a lawsuit in court, the seller will not agree to cancel the transaction, and certainly will not agree to pay compensation to the buyer.

In cases of this type, it is highly recommended to seek the services of an experienced attorney in the field of automobile claims. You are welcome to contact attorney Eddie Blitstein on this matter.

Frequently asked questions about selling a legally lost vehicle