Is J.D. Power Redefining “Quality”?

Posted by Sergei Lemberg, Esq. on September 18th, 2008

On the Motor Trend blog , Todd Lassa waxes poetic about J.D. Power and As  sociates’ top performing vehicles for 2008 (the ranking is based on the number of problems for every 100 vehicles). Todd reports that the top ten are Porsche, Infiniti, Lexus, Mercedes, Toyota, Mercury, Honda, Ford, Jaguar, and Audi.

Over at automotive.com’s blog, Joel Arellano used the same J.D. Powers and Associates data to jump on the Ford bandwagon, noting that the company improved more quickly than the industry average, and that Ford is the only manufacturer that’s shown steady improvement since 2004. He also exclaimed that three Ford models merited the highest rankings: Lincoln Navigator, Ford E-Series, and Mazda MX5 Miata.

That sounds all well and good, but Todd, Joel, and J.D. Power may have lost their bearings (if not their marbles). If Porsche is ranked number one, with “only” 87 problems per 100 vehicles, their definition of “quality” escapes me. Of course, the bottom-ranked manufacturer, Jeep, had almost twice as many (167 problems per 100 vehicles), but still…. 87 problems seems like about 87 too many. Do manufacturers (and those living in the rarefied air of J.D. Power and Associates) even live in the real world? If you’re putting out that much money for a Porsche (or a Jeep, for that matter), you have the right to expect that the vehicle is problem-free. Hey Todd and Joel, how about a zero tolerance policy?

Voice Your Support for the Used Car Rule

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

Back in 1984, the Federal Trade Commission (FTC) implemented the Used Car Rule, which said that car dealers who sell more than five used cars in a 12-month period have to display a Buyers Guide. The Buyers Guide gives consumers important guidance about buying a used car, as well as warranty information about the specific vehicle they’re looking at. For a more comprehensive overview of the Used Car Rule, click here.

Last week, the FTC approved publication of a Federal Register notice inviting public comments on how the Used Car Rule is working, if it is still necessary, and if any changes should be made to it. You can download a PDF of the text of the Federal Register Notice by clicking here, then looking at the links on the right side of the FTC page.

The Used Car Rule is an incredibly important consumer protection, and one that should remain on the books. Although the FTC is seeking comment on dozens of Used Car Rule issues – both minor and major – it’s critical that everyone step forward and voice their support of the Used Car Rule. You can send the FTC your comments about the Used Car Rule via snail mail or through their online form.

As for me, I’m advocating that the Used Car Rule be revised to require even greater consumer disclosure. There are just too many unsavory characters that sell defective used cars to unwary consumers. Here’s how I think the Used Car Rule should be modified:

1. There should be a prominent warning that encourages consumers to have the vehicle inspected by an independent mechanic.

2. There should be a requirement that the dealer prominently displays the consumer’s rights under their state’s used car Lemon Law. Most people aren’t aware that some states require limited Lemon Law warranties, and what those warranties are.

3. There should be a requirement that that dealer disclose any known vehicle defects having to do with the car’s accident history, lemon buyback history, and salvage history.

4. There should be a requirement that the dealer disclose any odometer discrepancies.

5. There should be a requirement that the dealer disclose any prior use, such as if the car was used as a rental vehicle.

6. If CarFax is used as part of the transaction, the dealer should be required to include a copy of the CarFax report with the Buyers Guide. All too often, consumers are shown an altered CarFax report, but are not given a copy.

7. There should be a requirement that the box for selling the vehicle “As Is” is the last choice on the Buyers Guide, rather than the first. Because “As Is” is currently the first box, consumers are often led to believe that the dealer is extending minimal warranties.

So, join me in voicing your support for the expansion and continued enforcement of the Used Car Rule. Again, here’s the link for public comments.

Don’t Be Taken For A Ride By A Lemon Dealer

Posted by Sergei Lemberg, Esq. on July 16th, 2008

Car salesmen are sleasy, we all know that. They are paid to sell you what his dealership has at as large a profit as possible. You, on the other hand, want to pay as little as you can. So, according to CNN, this is what you don’t tell him:

1. I love, love, love this car. Even if a car has your heartstrings in a white-knuckled stranglehold, never let on. Stay calm and pretend you’re looking over a microwave oven.

2. I need to get a car by tomorrow. If there’s anything worse than being in love, it’s being in desperate need.
Even if you really do need a car quickly, act like you have a month to decide. But you would consider buying today if you found a car that really pleases you at a price you like.

3. I need a monthly payment of…It’s understandable that many car shoppers are “payment shoppers.” But saying “I want a payment of less than $350 a month” is like going into a box store and asking for a two-inch box. You’ll notice that some dimensions are missing. You could end up with a box that’s 12 feet long.

4. My trade-in’s outside
A salesperson will usually want to know, early on, if you have a vehicle to trade in. If you tell him that you do and that it’s parked, conveniently, right outside, he’ll ask you for the keys. That way the used car manager can assess its value while you’re negotiating. It’ll save time. Well, he has a point there. But consider the downsides. You’ve just handed the salesperson your car keys and he’s given them off to someone else.

5. I don’t know anything about leasing. Even if you’re never going to lease a car, you need to know about leasing, if only to know exactly why you’re never going to lease a car.
6. My credit’s a little spotty. Many people underestimate their own credit rating – and they’re the people who are big moneymakers for car dealers. Part of the interest you pay is shared with the dealership, so they might be pleased to confirm your belief that you don’t qualify for a low interest rate.

And always remember: there are NO return policies for cars. None. So be careful.

Chrysler Calling All Lemon Car Owners!

Posted by Sergei Lemberg, Esq. on May 11th, 2008

shooting-fish-in-a-barrel.gifThe Consumerist recently wrote about Chrysler’s cute new undertaking to get serious about quality.  That’s all news to us and to Consumerist too.  Pretty soon, each of Chrysler’s top 300 executives will get on the phone and call a customer who recently bought a Chrysler, Dodge or Jeep vehicle and ask a simple question: “Having any problems?”  Cars.com’s Kicking Tires blog wrote about the same topic as well, though the Consumerist’ sceptical tone is more along the lines of my personal opinion.

I could give them a few numbers to some of my lemon law clients, but my hunch is that they won’t have any problems finding dissatisfied customers.  It’s sort of like shooting fish in a barrel, I suppose. 

Get this, though… the execs are going to call one customer a day every day until Chrysler chairman and chief executive officer Bob Nardelli (freshly dumped by Home Depot) is satisfied that if his customers have troubles, their problems will be fixed. Nardelli, by the way, is going to make the calls, too.

I say, dude, you’ve got to be kidding me. How about you start with designing and manufacturing quality products, instituting strict quality controls, training mechanics to fix problems, and just generally, why don’t you start making good, reliable transportation.  That would be where I’d begin.  Forcing your execs to talk to customers is just a PR gimmick, nothing more! 

Lemon Law for Electronic Gadgets On the Way!

Posted by Sergei Lemberg, Esq. on May 8th, 2008

1lemon_meter.jpgWho would have thought, but in New Jersey, televisions, iPods and other consumer electronic products may soon get the same consumer protections that car buyers get with the state’s automotive lemon law, under a bill approved and passed by the Assembly Consumer Affairs Committee.

Under the law, a lemon gadget manufacturer would have to replace electronic devices that cannot be repaired within 3 attempts with a device of equal value and condition or give a full refund of the total purchase price.  The bill applies to items valued at more than $250.   Violators would be subject to fines under the New Jersey’s Consumer Fraud Act. A first offense would carry with it fines up to $10,000. All subsequent offenses would carry a penalty of up to $20,000.

We are glad to hear that the lemon law in Jersey is being extended.  But how about other stuff? What about lemon dishwashers? Lemon fridges? The list goes on and on, so stay tuned for more…..