Indian Automakers Held Accountable

Posted by Sergei Lemberg, Esq. on December 28th, 2008

In a post last April, I took note of a decision by India’s Consumer Commission to award a lemon car owner a refund for his defective vehicle. Recently, President of the Commission, J.D. Kapoor, again ruled in favor of a lemon owner when he ordered that Tata Motors refund the money that Manoj Gadi paid for the defective Tata Indigo he purchased in 2006. It’s great to see that car manufacturers around the world are being held accountable for the quality of their products.

Document Your Car Problems: Your Lemon Law Case May Depend on It

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

I recently read an article that served as an important reminder of one of recurrent themes of LemonJustice, namely that it’s crucial to keep records if you think you might have a lemon car, truck, SUV, motorcycle or RV. Actually, because the pattern of problems that defines a lemon is often clear only in hindsight, the best approach is to start a log book whenever you purchase a vehicle.

Whether you use a spreadsheet, a word processing document, or a good, old-fashioned notebook, you should make a log entry every time you take your vehicle in for service. Note the problem or circumstances that led you to take the vehicle in, when you took it in, what the diagnosis was, what work was performed, the cost of the work, and how long the vehicle was in the shop. You should also note any other expenses you incurred, like alternate transportation.

You should also keep a folder of the paperwork that accompanied each trip into the repair shop, such as the service order and the receipts.

If your vehicle has a recurring problem, it pays to check out the National Highway Traffic Safety Administration’s Technical Service Bulletins database to see if the manufacturer has acknowledged the problem. You can also check complaints to see if other owners have had the same problem. It’s a good idea to file your own complaint to help establish a pattern if one exists.

Having your paperwork and documentation in order is an important weapon in lemon law claims. You’ll be one step ahead if you have your proverbial ducks in a row.

With All Eyes on the Big Three, What About RVs?

Posted by Sergei Lemberg, Esq. on December 15th, 2008

There’s been so much attention paid to a potential government bailout or bankruptcy of GM, Ford, and Chrysler that it’s easy to forget that the Big Three aren’t the only vehicle manufacturers in the country. Recently, the San Jose Mercury News published an AP story about the impact that the economy is having on the RV market. According to the article, there were over 390,000 RVs shipped in 2006. Compare that to this year’s projection of fewer than 250,000 RVs and a project for 2009 of 186,800 RVs.

This has had dire consequences for RV manufacturers, which are scrambling to come up with diesel-hybrid models that may have greater appeal. According to the article, Fleetwood “posted a $57 million quarterly loss and said it would close eight plants and lay off 760 workers.” But that may be just the beginning. The company has been trying to exchange stock to meet their debt obligations, and they are in danger of being delisted from the New York Stock Exchange because of undercapitalization. From a 52-week high of $6.85 per share, the company’s stock is currently trading at just 10 cents per share. If the company can’t repay its debt, Fleetwood’s next stop is bankruptcy court.

What I’ve written in posts relating to potential bankruptcy for Detroit automakers also holds true for RV manufacturers. If RV manufacturers go under, it will definitely impact RV owners’ warranties, and potentially their lemon law rights. How it will all play out is still murky, but anyone with a relatively new RV should pay attention to news coming of the RV industry.

Attorneys General Submit Comments for Used Car Rule Revisions

Posted by Sergei Lemberg, Esq. on December 10th, 2008

Back in July, I wrote a post about the Federal Trade Commission’s call for public comment about the Used Car Rule. I said that the Used Car Rule should be revised to require even greater disclosure to consumers, and listed seven changes I thought the FTC should make.

Recently, Attorneys General from 40 states, the District of Columbia, and the Northern Mariana Islands submitted a joint comment to the FTC. Because lemon laws and consumer complaints often run through their offices, they know quite a bit about consumers’ problems with used cars. They say without hesitation that the Used Car Rule is valuable, but say (as I did) that it doesn’t go far enough.

The statement by the Attorneys General says, in part:

However, the Rule’s value is limited by the fact that it does not provide notice about the most material information consumers need to consider and, indeed, do consider in deciding whether to purchase – that is the vehicle’s history and prior use, including its prior title status, damage history, and whether it was repurchased by the vehicle manufacturer pursuant to a state Lemon Law.

They go on to say that the Wisconsin Buyer’s Guide should be a model for the FTC’s Buyer’s Guide.

Interestingly enough, ten Attorneys General didn’t sign the comment – those from Alabama, Alaska, Hawaii, Nebraska, North Carolina, Oklahoma, Pennsylvania, Texas, Utah, and Virginia.

Will the Legislature Expand Connecticut’s Used Car Lemon Law?

Posted by Sergei Lemberg, Esq. on December 9th, 2008

Recently, a story ran in the Connecticut’s The Hour telling an all-too-common tale of a consumer who purchased an older used car, only to have it break down once he drove it off the lot. Although the state has one of the most comprehensive lemon laws in the country – notably because it also covers used cars – there are limits. Specifically, used cars have a 60-day implied warranty only if they’re less than six years old and are sold for more than $3,000.

That puts many consumers – who have to scrape together the money to buy a vehicle to go to and from work – in the untenable position of having a defective used car and no money for repairs.

According to the news story, when Connecticut State Senator Bob Duff was asked, he was opening to revising and expanding state law. The article quoted him as saying, “Any time we see holes in consumer protection laws, we should definitely address it and tighten any loopholes that are out there.”

Hopefully, Senator Duff will seriously consider taking this matter up when the Legislature reconvenes. After all, Connecticut was first in the nation to pass a lemon law; the state can take the lead again in expanding protections for consumers who buy used car lemons.