Court Limits Car Loan Damages

WASHINGTON —  Car buyers beware: The Supreme Court said Tuesday that people misled about auto loans could not use a federal law to receive significant damages.

When Congress passed the Truth in Lending Act 36 years ago, it decided to let consumers sue dishonest lenders for damages of $100 to $1,000.

The law has been revised several times since then, but the Supreme Court ruled 8 to 1 that the damage caps would remain.

The case was watched by consumer groups because of its potentially sweeping effect. About 45 million cars are bought and sold in the United States each year. Many are financed through a bank or other lender.

Tuesday’s ruling also applies to other financed purchases, such as appliances and furniture, but not to homes.

The loser was Bradley Nigh, who alleged he was a victim of unscrupulous tactics by a Virginia car dealer when he bought a used car four years ago.

A jury ordered the dealer, formerly known as Koons Buick Pontiac GMC Inc., to pay Nigh more than $24,000 in damages. The high court said, however, that he was entitled to no more than $1,000 under the federal law.