Lift Kits and Warranties

A Texas dealer prevailed in a case brought by a used-car buyer whose truck came with a factory warranty — and what proved to be a key restriction.

August 2017, Auto Dealer Today - Feature

by Thomas B. Hudson, Esq. - Also by this author

Getty Images
Getty Images

When it comes to disclosing warranty information in connection with the sale of a used vehicle, how far must a dealer go? Many consumers buy vehicles and, after the purchase, buy “add-ons.” Dealers who later sell these vehicles as used cars may face questions about the effect the add-ons have on the terms and conditions of the original factory warranty, and what a dealer’s duty is to determine whether installation of the add-ons results in restrictions or limitations of the factory warranty.

A recent Texas court grappled with these issues.

A consumer bought a used Dodge truck with a lift kit from a Ford dealership. The salesperson told the buyer that the lift kit was installed on the truck after it was manufactured. At the time of purchase, the buyer also received a buyer’s guide informing him that a manufacturer’s warranty came with the truck and instructing him to consult the warranty book about coverage.

When the truck experienced mechanical problems a month after purchase, the buyer went to a Dodge dealership for service. The dealership informed the buyer that the warranty did not cover the repairs due to a restriction.

The buyer paid for the repairs and sued the dealership where he bought the truck for violating the Texas Deceptive Trade Practices Act by failing to disclose the warranty restriction. The dealership moved for summary judgment, alleging that it had no knowledge of the warranty restriction because a Ford dealer cannot access the Dodge database.

The dealership also claimed that it informed the buyer of a possible restriction by telling him about the lift kit and referring him to the warranty book that stated that there was no coverage for parts installed after the truck left the manufacturing plant.

The trial court granted the dealership’s summary judgment motion, and the Texas Court of Appeals affirmed. The appellate court concluded that the dealership had no knowledge of the warranty restriction. Thus, there was no duty to inform the buyer about information of which the dealership was unaware. Moreover, the appellate court found that the dealership did not fail to disclose information regarding possible restrictions on the warranty.

But what if the selling dealer had been a Dodge dealership instead of a Ford dealership? In such a case, would the Dodge dealership be charged with the knowledge of whether the installation of the lift kit impaired the vehicle’s warranty — a warranty that a Dodge arguably ought to know about? Put differently, does the dealership’s warranty disclosure duty vary depending on the brand of the vehicle it is selling?

Courts frequently say that they have to try the case with the facts in front of them, so, at least for now, we don’t know how the court would rule on the altered facts. Food for thought, though, and perhaps reason enough for a sit-down with your legal beagle.

Thomas B. Hudson is a partner in the firm of Hudson Cook LLP, publisher of Spot Delivery, and the author of several widely read compliance manuals. Contact him at [email protected].

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  



Jim Ziegler
Stupid Is as Stupid Does

By Jim Ziegler
The Alpha Dawg charts the brief rise and long fall of Johan de Nysschen, the recently departed president of Cadillac and author of the business plan that effectively crowned Lincoln as the new king of American luxury.

They Finally Killed Somebody

By Jim Ziegler
Ziegler believes Uber’s directors should face criminal charges for their role in an Arizona woman’s violent death.

20 Things a GM Must Do Every Week

By Jim Ziegler

All Things Must Pass

By Jim Ziegler

Opening Observations

They Took Cadillac for a Ride

By Tariq Kamal
Hindsight is 20/20, but at least one industry member saw GM’s latest mishap coming a mile away.

Stand Up and Be Counted

By Tariq Kamal
The Dealers’ Choice Awards are the Yelp of vendors and finance sources.

Over the Curb

This Is Us: Dealer Edition

By Jason Heard
Heard knows delegation and outsourcing are the quickest path to a work-life balance.