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Cars have become really expensive. The average used car was listed for $26,342 in April 2026, according to Kelley Blue Book (1), which stated that “price-conscious buyers continue to face limited options for affordable used vehicles.”
That’s what makes it all the more frustrating if you pony up for a used vehicle and it turns out to have problems.
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Let’s take the case of Riley, for example. Riley is 21, and she purchased a used car for $25,000 with 75,000 miles on it. She bought the car as-is, and three hours after she drove it home, the engine blew.
While the dealer provided some help with that issue, putting in an old engine for a reduced cost, Riley has had a series of other problems and can’t go more than 24 hours without a new issue. She’s already spent thousands on repairs and is regularly taking Ubers to work.
Now, Riley owes $10,000 more than the car is worth and is faced with deciding whether to fix it, trade it in and pay the $10,000 difference, or let the lender repossess it, ruin her credit, and still potentially end up with a judgment against her for the balance (2).
Is there any recourse after buying an as-is vehicle with major issues?
Unfortunately, because Riley purchased her car as-is, her recourse is somewhat limited. She doesn’t have a warranty and the dealer has already provided all the “help” it is willing to give by putting in the used replacement engine. Still, she does have some potential avenues to pursue.
“An as-is sale can make a claim more difficult, but it doesn’t eliminate all legal recourse against a dealership,” advised Blaine Rogers, Attorney at Davis Levin Livingston (3) in an interview with Moneywise. “If the dealer misrepresented the vehicle’s condition or made promises that contradict the as-is disclaimer, the buyer may still have claims under state consumer protection laws.”
Riley may have a claim under Unfair and Deceptive Acts and Practices laws (4), or under consumer fraud laws. If the dealer engaged in deceptive, unfair, or unconscionable practices by failing to disclose known defects or making false oral promises about the car, Riley may have a right to actual damages, attorneys’ fees and even punitive damages in some circumstances.
Rogers recommended reviewing invoices, inspections, and correspondence to look for signs the dealer may have known of the issues and not disclosed them, or may have made false promises. “Contractual disclaimers do not protect a business from liability for intentional misrepresentations or deceptive conduct,” Rogers said.
If she thinks she may have a claim, some lawyers offer a free consultation and some will take cases on a contingent-fee basis, so Riley could get legal help and pay any fees due out of the money recovered.
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Should she fix the vehicle or trade it in?
If Riley doesn’t want to pursue legal action, she’s left with a choice of keeping the car and paying for repairs, trading it in and cutting her losses or letting it get repossessed and ruining her credit. The third option doesn’t really make sense, since she could end up owing the unpaid balance plus fees anyway. So she’ll need to choose between trade-in or repair.
“As a general rule to follow, one issue on its own is very rarely a reason to replace or change your car,” said Luke Oswald (5), an automotive specialist at Wheels Away, in an interview with Moneywise. “We’re actually seeing vehicles last longer than ever, with some well-maintained cars doing more than 150-200,000 miles. The one thing they usually have in common: they are all well-maintained, looked after by their owners, and have been serviced regularly.”
However, Oswald warned that when cars have a series of repair bills over a couple of months, it’s often because they haven’t been maintained properly. “This is the real warning sign to look for: Lots of issues cropping up over a few months or years. That’s when you know it’s time to upgrade.”
Oswald suggested that drivers focus on the vehicle’s reliability when making a decision on whether to keep it or trade it in. “Think about the cost of breakdowns, not just for the car but for the disruption it causes too — for example, getting to work.”
Since Riley’s car has had repeated issues — and since the dealer seems shady and the old engine they put in may not even be a good one — trading it in at least limits her losses. She’ll lose $10,000, but won’t keep facing continued surprise bills. And she’s young enough that she can work hard on paying that loan off ASAP and recover financially.
So, Riley should first schedule a free consultation with a lawyer to see what her options are. If she can’t pursue a claim, she should research dealers carefully, find a used vehicle with a warranty, even if it’s a less fancy car, and see if she can roll her negative equity into the new car loan.
She can consider the whole situation to be an expensive lesson and can try to keep her “new” used car for a very long time to make up for the loss she took on her first one.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Kbb (1); Experian (2); Davislevin (3); Fdic (4); Wheelsaway (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
