The Finer Points of New York Used Car Laws

Posted by Sergei Lemberg, Esq. on February 22nd, 2010

When it comes to used car laws, New York lemon laws are among the best in the nation. When you purchase a used car in NY, you not only get a car bill of sale, but you also get what’s known as a lemon law warranty. This warranty can give you the peace of mind you need when you purchase a previously owned vehicle.

While NY lemon laws are fairly straightforward, there are some finer points that consumers sometimes miss. Here are three you should be aware of:

1. Private sales aren’t covered. If you purchase your used vehicle from another individual, your car won’t necessarily be covered by New York lemon law. Only those vehicles purchased from a dealer are included in lemon law coverage. However, the law defines “dealer” fairly broadly, as someone (a person or business) who sells or leases a vehicle after selling or leasing three used cars in the previous 12 months. Cars purchased at retail auto auctions are also covered by NY lemon laws. However, there are certain companies that are excluded from the definition of a dealer, including banks, regulated public utilities, state and local government agencies, and a business that sells a company car to an employee.

2. If you buy from a dealer, you’re covered. If a used car dealer meets the definition of a dealer under New York lemon law, you have the protections of a used car warranty – whether or not the dealer actually gives you the warranty. The law says that you’re covered, and that you can’t waive your rights under New York used car laws. So, if you unknowingly signed a contract containing a clause saying you waive your rights, that clause is null and void.

3. The value of your trade-in may be adjusted. In the case of a lemon buyback, NY lemon laws say that the dealer doesn’t necessarily have to refund the amount listed in your sales contract for your trade-in. Instead, he may use the wholesale value of your vehicle, as determined by the NADA Used Car Guide. If he still has your old vehicle on the lot, he also has the right to return your trade-in in lieu of refunding the money you received from your trade-in. However, you’re still entitled to a refund of the money you paid for the car you purchased.

Although New York offers consumers considerable protection under its lemon law, most people aren’t prepared to go toe-to-toe with dealers when they find they’ve purchased a used car lemon. That’s why you need an attorney by your side who specializes in fighting car dealers and auto manufacturers. If you think you have a used car lemon on your hands, contact today. Our attorneys are standing by, ready to help you get the justice you deserve.

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.