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home : most recent : statewide implications December 16, 2018

4/30/2018 8:01:00 AM
Used car warranty cases prompt 'buyer beware' warning from Indiana attorney general
At a glance
The Office of the Indiana Attorney General recommends the following tips to car buyers:

• If you buy a car from a dealership and purchase a warranty administered by a third party, you should receive a warranty contract at the time of sale and thoroughly reviews its terms. Also, ask the dealer when it will forward payment to the third-party warranty provider, and contact the warranty provider after that date.

• If you pay for a warranty contract and the warranty provider never receives payment from the dealership, immediately notify your lien holder of the issue. In addition, file a complaint with the attorney general’s office at or 1-800-382-5516.

• Be aware that dealers have 31 days from the date of sale to deliver a valid title. Ask either to see the title or a copy of it. At a minimum, ask about the location of the title. Ensure you receive a “dealer title affidavit,” which should be completely filled out and signed by the dealer stating the location of the title and the date the dealer will convey the title to you.

• If failing to receive a title within 31 days, immediately file complaints with the Secretary of State Auto Dealer Division and also with the attorney general’s office at or by calling 1-800-382-5516.

Scott L. Miley, Herald Bulletin CNHI Statehouse Bureau

INDIANAPOLIS -- Hoosiers should take a "buyer beware" approach when doing business with used car dealers, the office of Indiana Attorney General Curtis Hill warned Friday.

The advice followed the resolution of two cases where used car dealers failed to deliver titles or provide promised warranties to customers who paid for vehicles.

In Delaware County, Capitol Motors LLC failed to procure warranties for 185 consumers, Hill said. 

The business, owned and operated by Naim Mahmoud, advertised that each vehicle it sold came with a three-month or 3,000-mile warranty. But after selling the vehicles, Capitol Motors failed to send payments to a third-party provider, leaving buyers without warranty coverage.

In addition, Capitol Motors failed to deliver valid vehicle titles within 31 days from the date of sale to 22 consumers. Buyers couldn't register or legally drive newly purchased cars and trucks.

The attorney general's office filed a complain, and, on March 27, a Delaware County Circuit Court judge ordered restitution totaling $62,480 for 185 consumers who purchased extended vehicle warranties they never received.

The judgment also requires the defendants to pay civil penalties of $180,500 and state costs of $450, for a total judgment amount of $243,430.

The judgment prohibits Mahmoud from owning, operating or managing another auto dealership in Indiana.

In Allen County, Shaver Motors and its owner, John B. Shaver III, accepted payment from 35 consumers for vehicle service contracts, such as warranties, and failed to forward the customers’ money to the warranty provider.

On March 26, a judge ordered Shaver Motors to pay $65,507 to 37 consumers who purchased extended vehicle warranties that they never received. Shaver was ordered to pay $3,000 to the state for costs associated with the case.

2018 Community Newspaper Holdings, Inc.

Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR

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