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AG secures $100,000 from used car dealerships

(AP Photo/Michael Conroy)

INDIANAPOLIS, Ind. (Inside INdiana Business) – Indiana Attorney General Curtis Hill says four Indianapolis-based used car dealerships have paid $100,000 total in restitution. Hill’s office says the dealerships violated the Indiana Deceptive Consumer Sales Act as well as the Indiana Salvage Motor Vehicles Act.

The dealerships were accused of selling more than 200 used vehicles without obtaining the proper titles after purchasing vehicles at salvage auctions after major accidents.

The four dealerships include: Circle City Auto Exchange Inc., Circle City Auto Connection Inc., Circle City Sales & Service Inc., and Empire Auto Group Limited.

“Any business or person that deceptively sells vehicles to Hoosier consumers will face consequences,” Hill said. “Hoosiers deserve truthful information about the vehicles they are purchasing.”

The vehicles were declared “total loss” by the previous owners’ insurance companies, but they did not contain a title brand of “salvage” or “rebuilt.” According to Hill’s office, when a vehicle is determined to be a “total loss” after an accident, the insurance company or owner must apply to the Indiana Bureau of Motor Vehicles for a “salvage” title.

To operate on Indiana roads, “salvage” vehicles must also apply for a “rebuilt” title and provide certain documents to the BMV as well as submit the vehicles to a police inspection.

After purchasing the vehicles from the salvage auction, the dealerships would apply to the Indiana BMV for clean titles, according to the complaint. Hill’s office says the clean title designation had a significant affect on the perceived value of the vehicles and consumers paid more than the vehicles were worth.

Additionally, the complaint alleged that the dealerships did not properly rebuild the vehicles for use on Indiana roads in accordance with state law. Hill’s office says the dealerships also misrepresented the mechanical quality, safety and performance of the vehicles.

The Marion County Superior Court approved a consent agreement and granted judgment against the dealerships for $100,000 in consumer restitution.

Hill’s office will distribute the money to consumers who purchased vehicles from the dealerships and were harmed by the dealerships violations.