Florida Car Dealer: Doing Well by Doing Good

Posted by Sergei Lemberg, Esq. on October 22nd, 2008

A recent article in Automotive News highlighted the efforts of Earl Stewart, a West Palm Beach, Fla., car dealer who is not only shining the light on an unscrupulous practice, but is walking the talk as well.

We’ve all heard about those “dealer preparation and document fees” that are tacked on to the price of a new car. Stewart has been vocal that those fees, which can amount to as much as $1,000, are a consumer rip-off. In fact, he stopped charging those fees in 2005, and has tried to shame his fellow car dealers into doing the same. They haven’t budged, but consumers have used the most powerful weapon at their disposal – their pocketbooks – to support Stewart’s stance. According to the Automotive News article, Stewart doubled the number of cars he sold once he dropped the fees.

In the meantime, Stewart is advocating on behalf of Florida legislation that would outlaw dealer fees. In his blog, he makes valid points about why a compromise bill that would mandate disclosure still wouldn’t give consumers a fair shake:

Think about it. (1) Car dealers admit that the dealer fee is pure profit [they also refer to it as recapture of costs but that is synonymous with profit]. (2) All the rest of the dealers’ profit is included in the price he quotes you on the car. (3) Common sense and “Accounting 101″ says that businesses should include all of their costs/profits in the price of their product or service. (4) What reason can there be for a car dealer electing to remove a portion of his profit from the price he quotes you on a car, renaming it “dealer fee” [or one of at least 22 other nebulous names according to the Florida Senate Investigation of the Dealer Fee] and then adding that profit back in when you sign your paperwork upon the delivery of your car? I submit that there can be only one answer to that question. That answer is that the car dealer wants you to think that the price he quoted you includes all of his profit and is the complete out-the-door price of the car.

We agree with Stewart. Tacking on dealer prep fees amounts to unfair lending practices, and should be stopped. There’s an interesting class action lawsuit brewing in Missouri about just this issue, which we’ll discuss in a future post.

Sam Levine: Keeping Tabs on Manufacturers

Posted by Sergei Lemberg, Esq. on September 14th, 2008

It seems that, for every product recall we hear about, there are a dozen that never make the headlines. After all, there are so many products in the marketplace that it’s hard to keep tabs on them all.

Thankfully, Sam Levine over at the Product Liability Lawyer Blog is shining a light on defective products.

His recent posts include:

  • Defective tire stems, imported from China, are causing tire blowouts.
  • A Department of Justice investigation into Stryker Corp., an artificial hip and knee maker, over allegations of illegally giving surgeons kickbacks to use their products.
  • Croc shoes have caused problems on Atlanta airport escalators.

Check out his blog – it’s terrific!

Lemon Owners Have Another Claim – Conversion

Posted by Sergei Lemberg, Esq. on September 6th, 2008

The U.S. District Court recently refused to dismiss a conversion claim (money theft, in plainspeak) filed by a lemon owner against Toyota. In Ortega v. Toyota Motor Sales, the Court handed down a decision that supports consumers’ rights to sue a vehicle manufacturer when they don’t provide a refund in a timely manner – a surprising but welcome victory for consumers.

According to the Citizen Media Law Project, a conversion “applies when someone intentionally interferes with personal property belonging to another person.” In this case, the court found that the refund was the consumer’s personal property, and that he had the right to sue Toyota for conversion when it didn’t pony up the money.

Daniel Ortega had filed a lemon lawsuit under two other laws (which weren’t addressed in this decision): the federal Magnuson-Moss Warranty Act and California’s Song-Beverly Consumer Warranty Act – the latter being California’s Lemon Law. According to Ortega, he had purchased a Toyota Scion tC in late 2006, and the vehicle then had “problems with the check engine light illuminating, engine noise, burning oil, transmission grinding, and engine seizure.”

2 CarPros Come to the Rescue

Posted by Sergei Lemberg, Esq. on July 6th, 2008

If you’ve ever wondered whether your mechanic is ripping you off, or whether the problem with your car is actually an easy, do-it-yourself fix, you’re not alone. That’s why Ken and Bob at 2CarPros.com are one of the greatest resources on the Web. These professional mechanics have been offering free online car repair information and advice for the past ten years… Happy anniversary, guys!

 There is so much great information on their site that it’s hard to know where to start. They have a database of thousands of answers to car repair questions that you can search by topic or by manufacturer. They offer a forum (with over 186,000 members!) that you can join for free and ask your own auto repair question. They’ve even created a car repair video series if you want to try a repair on your own. They have videos from the simplest maintenance procedures (“How to Change Wiper Blades”) to more complicated topics (“How to Change Front Brake Pads and Rotors”).

In between, Ken and Bob share online repair manuals, car repair troubleshooting tips, and diagnostic trouble codes. The bottom line is that, as car owners, we should all take a little more responsibility in understanding how cars work and what can go wrong. With a little knowledge, we’ll avoid getting ripped off and might even be pleasantly surprised at how much routine maintenance we can do ourselves. Remember, knowledge is power!