How to Sue a Car Dealership under New Jersey Law

How to Sue a Car Dealership

The answer of how to sue a car dealership can take up an entire novel so the best I can do is break it down, piece by piece, to as to understand the complex nature of this litigation.

INSURANCE
The first thing you need to understand is 1) whether there is insurance and 2) the type of coverage.

Initially it is tough to determine the answer to these questions, even after years of litigating these cases. These is actually insurance to cover these cases, consumer fraud and negligence, but it can be limited. I will also tell you that you can never tell, even by the size of the dealer, whether they have insurance. Many dealers, even the big ones, have chosen to go it alone and not have insurance.

There are basically two insurance companies that have this coverage, including Zurich. The insurance for consumer fraud (usually) only provides for payment of counsel fees and not indemnity. This means that if you receive a verdict against the dealer the insurance company does not have to pay, but rather the dealer. BUT certain allegations are covered by insurance such as negligence and TILA (Truth In Lending Act) and as such the insurance company will pay you to settle or even on a verdict for these allegations. Obviously, if permissible in good faith, you can allege TILA and negligence the chance of settlement is greater, since the insurance company will probably agree to the settlement. The cost of the dealer’s lawyer is covered under the basic policy, so the dealer has little or no incentive to settle with this policy since their lawyer is being paid and they have to pay out-of-pocket to resolve the case. This is an important concept to understand and results in the complete litigation of these case because of the insurance coverage.

The point is you have to be ready to try these cases and need to be prepared because many times they do not settle