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Automakers Trying to Sidestep Lemon Laws

Posted by sally on July 8th, 2013

An alarming report in the New York Times highlights the ways in which automakers are trying to sidestep or dilute consumer protections when it comes to defective cars. According to the article, car manufacturers are trying to make consumers waive their lemon law and class action rights and instead agree to undergo binding arbitration.

When consumers face binding arbitration, they’re subjected to rules instituted by the manufacturer’s arbitration firm. The Times quoted a law professor as saying, “So one of the main benefits from the company’s standpoint is to eliminate claims against the company.” Another benefit is to cover up defects that could become public over the course of a lemon lawsuit in the court system.

Consumers are at a distinct disadvantage when it comes to arbitration proceedings. Car manufacturers have teams of legal experts who focus on tamping down consumer claims, while consumers generally don’t have the expertise or the financial resources to hire attorneys that will go toe-to-toe with automakers. Without the consumer protections and fee-shifting provisions of state lemon laws, consumers are at the mercy of car manufacturers.

GM Under Fire for Inadequate Recall

Posted by sally on July 7th, 2013

According to a report in the New York Times, the National Highway Traffic Safety Administration (NHTSA) is probing General Motors’ recall of 8,000 vehicles for faulty brake lights. The agency is investigating whether GM should have recalled considerably more vehicles (551,000). According to the investigation resume, “The brake lights may malfunction, resulting in reversed operation. The brake lights may activate without depressing the brake pedal and/or turn off when the brake pedal is depressed.”

GM Recalls More SUVs

Posted by sally on July 6th, 2013

In mid-June, General Motors expanded last August’s recall of 250,000 SUVs due to the safety risks posed by the driver’s door window shorting out and catching fire. According to a USA Today report, GM expanded the recall to 200,000 additional vehicles: The 2006 Chevrolet Trailblazer EXT and GMC Envoy XL; and the 2006-2007 Chevrolet Trailblazer, GMC Envoy, Buick Rainier, Saab 9-7x, and Isuzu Ascender. Apparently, moisture can get into the door and compromise the electronics, which can in turn short circuit and overheat. As a result, the door can smoke or even catch on fire.

Does Chrysler Go Far Enough with Jeep Recall?

Posted by sally on July 5th, 2013

The National Highway Traffic Safety Administration (NHTSA) and Chrysler have been at odds over the alleged safety hazard posed by the positioning of gas tanks in Jeeps. The NHTSA requested that Chrysler voluntarily recall certain models of Jeeps in which the gas tank had ruptured during accidents that resulted in 51 deaths. Chrysler initially refused, saying that the company disagreed with the NHTSA conclusions, but then changed course and recalled Jeep Grand Cherokees from 1993-2004 model years and Jeep Liberty vehicles from 2002-2007. This impacts approximately 2.7 million vehicles. An NHTSA statement noted:

“On vehicles in the recall that are not equipped with a tow hitch, Chrysler will install a Chrysler designed tow hitch free of charge, provided the condition of the vehicle can support proper installation. On vehicles in the recall that are equipped with an aftermarket tow hitch, Chrysler will assess whether the hitch and surrounding areas show evidence of sharp edges or other puncture risks. If so, Chrysler will replace the tow hitch with a Chrysler designed tow hitch free of charge, provided the condition of the vehicle can support proper installation. On vehicles already equipped with a Chrysler designed tow hitch, Chrysler will inspect the area around the tow hitch installation, and if any installation issues are identified, they will be repaired free of charge.”

A statement by Chrysler reiterates that the company does not consider the Jeeps in question defective, but says that it has taken these steps “to provide additional measures to supplement the safety of its vehicles.”

However, an article in the New York Times reported that the Center for Auto Safety complained to the NHTSA that the recall didn’t go far enough. The organization argued that a trailer hitch didn’t go far enough to prevent fuel tank ruptures in rear end collisions. The Center for Auto Safety is advocating for crash tests and the alternative solution of installing a steel shield around the gas tank.

Federal Trade Commission Extends Comment Deadline for Used Car Rule

Posted by sally on February 20th, 2013

As we discussed back in December, the Federal Trade Commission is in the process of updated the Used Car Rule, which helps protect consumers who are purchasing used vehicles and which hasn’t been updated since 1995. The FTC recently announced that it is extending the comment period for the proposed revisions to March 13, 2013.