Bought a used car from a dealer - mechanic says it has flood damage that wasn't disclosed. What are my options?

I publish illustrative scenarios prepared by my practice. All participants and conversations are fictional. The fictional posts are not posts by real users, accounts of client experiences, or reports of actual results.
Illustrative scenario prepared by my practice.
For informational purposes only. Auto fraud and consumer protection laws are complex and vary by state. Consider consulting with a consumer protection or lemon law attorney.
Hypothetical question

Bought a 2021 Honda Accord from a used car dealership 6 weeks ago for $24,000. Seemed like a great deal - low miles (32k), clean Carfax, looked perfect.

Last week the car started having electrical issues - dashboard lights flickering, infotainment system freezing, power windows not working right. Took it to my mechanic who put it on a lift and said there's clear evidence of flood damage:

  • Mud/silt residue under the carpets and in the spare tire well
  • Corrosion on electrical connectors that shouldn't be there
  • Rust in places that shouldn't have rust on a 3-year-old car
  • Water line visible inside the doors when panels were removed

The Carfax shows no flood damage or salvage title. I'm guessing it was "washed" (title washed) from another state.

The dealer is saying they "had no idea" and sold it to me "as-is." Is that even legal? What can I do? I'm in California and I feel completely scammed.

Illustrative response

Went back to the dealer with the NICB report and NMVTIS history. Demanded a full refund plus my inspection costs.

The sales manager got defensive, said I was "trying to scam them" and that the car "was fine when we sold it." When I mentioned the word "attorney" and "CLRA," suddenly the general manager came out and said they'd "look into it."

They're supposed to call me back tomorrow. Not holding my breath. Already have a consultation scheduled with an auto fraud attorney for next week.

Illustrative response

Pro tip: if your payment processor tells you "funds will be available in 90-120 days," that's usually a rolling hold. New transactions extend the clock. Stop processing through that account immediately.