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The manufacturer tries its best to get a new car to its intended buyer in perfect condition, but there are many opportunities along the way for damage. The cars are usually loaded up on a transport trailer to go to their next destination. If the cars are sold in the same country, they may only use over-the-road transport, but if they need to travel an ocean they are loaded into containers or into a transport vessel.
Once a car reaches its intended port, it is moved across the port to be loaded onto a truck and transported to a dealer lot. All of these steps have potential for damage, which can be inflicted from loading and unloading or even a third party. If the issues are minor, the cars can be pulled off to the side and repaired once they arrive at port and then sent along to the dealer.
After reaching the dealer lot, there are opportunities for the cars to be damaged from being moved around the lot or from other cars that are driven around them. If a car gets damaged on the dealer lot, it is usually repaired and can still be sold as new. The dealer that completed the repair is not required to disclose that repairs have been completed if the amount of damage falls below a certain threshold.
Most states set a threshold of three to six percent of the MSRP as the required amount for disclosure to a buyer. I recently purchased a Subaru WRX in North Carolina and took a look at the local disclosure laws. In NC, the law states that dealers are required to disclose damage on new cars that exceeds five percent of the MSRP but are not required to disclose damage to glass, tires, or bumpers if the items are replaced with original-equipment parts. This means that the WRX I purchased with an MSRP of $28,138 could have up to $1,400 in repairs and the dealer would not be required to disclose it.
The WRX that I purchased was in great condition and did not show any repairs or touch-ups, but that $1,400 figure could cover a large repair that might not be apparent if the vehicle had not been inspected. The windshield exclusion makes sense as cars might get rock chips in transport and could require a replacement, although the tire exclusion is troubling as it could allow a dealer to replace the tires if a lot employee gets throttle happy and decides that a burnout is a good idea.
California seems to be one of the more consumer-friendly states in this regard, as it sets the threshold at only three percent, while states like Georgia set a separate limit of $500 for repainting alongside a five-percent disclosure limit. In most cases, dealers will disclose any damage that seems significant but many times they will just stick the car on the lot without any warning.
The best way to protect yourself is to carefully inspect your potential new car for any damage and explicitly ask the dealer if any repairs or touch-ups have been completed. Some states require the dealer to disclose repairs of any amount the customer asks, so it is a good idea to always pose the question.