Rockbank Motors Ltd, which runs Peter Ashton Car Sales on Southgate, Preston, and Eccles Hill Motors, Darwen, admitted seven counts of unfair commercial practice.
Mubasshar Azam, 47, of Meins Croft, Blackburn, and Amar Ahmed, 33, of Arran Braeside, Blackburn, admitted four charges and were given 200 hours unpaid work.
Ahmed was given a curfew and Azam was given a rehabilitation activity requirement.
Prosecuting at Preston Crown Court, David Traynor said: “ It is the prosecution case that the business misled consumers as to their rights following the purchase of a vehicle in two ways.
“Firstly, cars were sold under an invoice headed ‘spares/repairs invoice’ which sought to indicate that vehicles were being sold as unroadworthy and as such any faults were the responsibility of the consumer.
“ On four occasions between March 2016 and December 2016 consumers bought cars intending them for immediate use. It was only at the point of sale that they were told the vehicle was being sold under a ‘spares/repairs invoice’.
“ The circumstances of the sales were such that the normal rights under the Consumer Rights Act 2015 to reject a defective vehicle or seek redress applied and so the efforts to suggest they didn’t were misleading actions.
“ The second misleading action of the business was to include a clause on invoices that any return of a vehicle would result in a restocking charge of £395.”
Among the victims was Timothy Bradwell, who travelled from his Sunderland home last March to buy a Land Rover Freelander from the Preston site.
Around 110 miles into his trip home the car started to lose power and emit thick smoke before breaking down.
Recorder Lamb said it was an aggravating feature Trading Standards had given written advice to them in 2012.