I purchased a used car with a clean carfax and the dealer made no attempt to say otherwise. I was lied too.
I tried to trade in this vehicle only to learn in about 2 minutes from them that it had been in an accident and they would only be willing to pay half of what it was worth. What legal action, if any, can I take? This experience is costing me thousands of dollars I do not have.
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Small Claims Court is often the place to take a case like this, since, if they are a fraudulent dealer, chances are they will not resolve this without being forced to. The Carfax Report is a good place to start, as it was likely a forgery. Take everything in writing, including the contract and file a claim in a small claims court. Tell the story to the judge. There is no need for an attorney (in fact, you can't have one in the court room) and they will rule on the spot whether or not you are entitled to damages.
Was there a problem with the Carfax report? I would take up the issue with Carfax. They guarantee their reports to be accurate. If someone misrepresented the accident on purpose, then Carfax might be liable. This is not legal advice, but I would definitely look into the situation from Carfax rather than the dealer. If the dealer forged the Carfax report, the transaction was fraudulent.
It sounds like there is a fraud/misrepresentation issue. The best action to take would be to document everything in writing that has happened. Then contact your local bar association for a referral to a free or inexpensive meeting with an attorney. They can also tell you about any consumer laws that might be applicable in this situation.
You must first read the contract that you signed upon purchasing the car. If the dealer has a clause in there taking away liability from him for a carfax report then there really isn't much you can do. However, I think your most concrete grounds are misrepresentation. This wasn't necessarily fraud because even though the dealer did not tell you that the vehicle was in an accident, it appears he never said that it was either.
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