Lemon Law Blog

The warranty battle is on! Many manufacturers are engaged in a battle for the best warranty. But here are some things to keep in mind when investigating the difference between new car warranties.

It's good to know the difference between a new car warranty and an extended auto warranty. A typical new car warranty has two parts: the "bumper to bumper" warranty, which covers everything except the "wear" items such as brakes and tires; and the powertrain warranty that covers all the parts that make the car move, such as the engine and transmission.

An extended auto warranty can be purchased to prolong the coverage of the bumper-to-bumper warranty. Most people are familiar with the extended warranty that is sold at dealerships. There are also "third-party" warranties which can save consumers money but are generally less convenient to use. Many third-party warranties require out-of-pocket payment for repairs before reimbursement. Weigh all these factors carefully before you make your choice.

Labels: car warranties, Lemon Law, lemon vehicle

$3.80 - $3.90 - $4.00 - $4.10 ... When will it stop? With the rising cost of gas consumers have been bombarded with advertisements for various gas saving products and free gas promotions. So are any of them real?

Gas Saving Products

Products ranging from fuel additives to hardware that you mount on your car claim to save you hundreds at the gas pump. Do any of them work? Of the hundreds of "gas saving" devices and additives reviewed by the EPA over the years, none have been found to actually work. Furthermore, Consumer Reports recently tested several new products, and none lived up to their claim.

So what can you do? Save your money! Properly maintaining your car and improving your driving style are still the best ways to increase your gas mileage. In fact, traveling at 65 mph instead of 75 mph, braking easier, and accelerating at a slower pace can save you up to 37% in gas!

Buy a Car Get Free Gas

Are the "free gas for a year" new car promotions real, or are they a scam? Well, yes and no. Here's the scoop: When buying a new car under this and similar promotions, make sure you read the fine print. Often these deals are good, but the promotion only cover gas up to a certain amount. The amount covered is often calculated by factoring the amount of gas required to drive the car 12,000 miles and the vehicles EPA mileage estimate.

The bad end of the deal involves other discounts and rebates you may be passing up. By going with the free gas, you may be substituting 0% financing, saving you thousands and thousands, or attractive factory rebates in exchange. To truly understand which offer is the better deal, sit down with your salesman and get all the fine print. Then calculate out your exact savings for each deal.

Labels: gas saving products, gas savings, Lemon Law, lemon vehicle

Given the sheer volume of vehicles manufactured each year, it should come as no surprise that auto manufacturers will make mistakes during the process. From design defects to manufacturing defects, the responsibility of rectifying the manufacturer's mistakes must be addressed. Often times, auto makers will address these defects by releasing "secret warranties" that many consumers may never know exist.

Secret warranties are free repair programs offered by automakers often dealing with repairs related to negligence or poor engineering in the manufacturing process. Manufacturers are reluctant to admit the existence of secret warranties, only admitting these issues under the guise of special technical service bulletins (TSB), goodwill policies or extended warranties. Worse yet, there is no federal law requiring auto makers to release this information. As a result, consumers are never notified, only regional offices and sometimes the dealer. Therefore, only the consumer who complains loudly gets covered by the secret warranty, while others end up accepting the expense of the manufacturer's mistakes!

Secret warranties can assist a consumer who may think they have a lemon. Often times, they cover everything from large, costly repairs including blown engines or transmissions to even smaller repairs, costing only a few hundred dollars.

Finding Secret Warranties
First, check for a list of technical service bulletins for you're vehicle. Consumers can contact us at 1-888-536-6671 and request a search of our extensive file of TSB information or search sites such as the National Highway Traffic Safety Administration at nhtsa.dot.gov. The existence of a service bulletin does not conclusively prove the auto company has a secret warranty, but it does show a defect or problem exists for which the manufacturer has had to develop a repair. Bulletins that authorize the dealer to make repairs at the manufacturer's expense, even if the defect is no longer covered under warranty and contain wording such as "check for availability of good will assistance" are important to your cause.

Once determining that your vehicle is covered by a secret warranty, take the service bulletin that proves its existence with you to your dealer. Should the manufacturer refuse to honor the secret warranty for any reason, escalate your claim to the manufacturer directly and their corresponding regional and zone managers. Manufacturers only reimburse consumers who are persistent in their complaints.

Many Auto dealers employ unfair and deceptive practices in order to persuade you during the negotiating process to purchase a vehicle from them. While it would be nearly impossible to list all of the tricks employed in new and used car sales, the following tips will help give you a better understanding of some of the most prevalent tricks certain dealers are using.

Hidden Damage / Title Washing
Every year vehicles which have been totaled in an accident and thereafter rebuilt are sold as if they had not sustained any damage. Consumer advocacy groups have stated that as many as twelve percent (12%) of used vehicles sold have hidden defects that could lead to major problems. Vehicle's that have had evidence of flood, fire or accidental damage so severe as to be reported to an insurance company have their titles branded as such in many states. Sometimes the title is "re-branded" and then resold to an unsuspecting consumer. Many dishonest dealers will deny knowledge of the vehicle's history, despite the availability of vehicle history reports. Be wary, many states require title branding, however, in those that don't, a vehicle's prior history can be wiped clean of any negative marks against it.In addition, new vehicles can be damaged as well, either in a mishap on the lot, or even in transport to the dealership. Although some states have specific statutes requiring disclosure of damage, it normally has many loopholes, even if it is being followed at all.

Laundered Lemons
When a manufacturer repurchases a lemon car or truck from a consumer, the vehicle often ends up sold through dealerships and back on the road. The vehicle becomes a laundered lemon when an unsuspecting consumer purchases one of these vehicles and the dealership fails to inform them that it had been repurchased under the Lemon Law. Most states require that the manufacturer, through their dealers, inform buyers that the vehicle has a repurchase history and offer a limited warranty.Sometimes the title is "re-branded" and then resold to an unsuspecting consumer or no disclosure is given at all. Many dishonest dealers will deny knowledge of the vehicle's history, despite the availability of vehicle history reports.

Odometer Fraud
An old trick is to "rollback" a vehicle's odometer to hide its true mileage and make the vehicle more appealing to a would-be buyer. Odometer fraud is illegal on the federal, as well as the state level.

Sale of Rental Vehicles (and other heavily used vehicles)
Rental car companies regularly turn over their vehicles prior to the warranty expiring and sell them at various auto auctions. Dishonest dealers buy these vehicles and resell them on their used car lots without disclosing their prior rental car history. Most people do not want a prior rental car due to the abuse it's been put through or would only purchase one at a substantial discount. Other types of unwanted vehicles could be police cars, demos, taxis, etc.

Spot Delivery/Yo-Yo Sales
A spot delivery or yo-yo sale occurs when the dealer places a consumer in a vehicle on the spot before securing financing or pretending to have secured financing. The consumer is told that everything is complete and drives the vehicle home to show off to friends and family. Once the consumer is "attached" to their new car, the dealer calls to tell them the lender has refused financing at the price they were expecting. Usually the price is now more than they had agreed to and sometimes the trade-in vehicle has already been "sold." This unethical practice can provide thousands of dollars of unearned gain to the dealership. To avoid this, ensure that your trade in is not sold until the financial institution has approved your loan!

How to Avoid these Problems
Despite the existence of these fraudulent practices, a knowledgeable consumer can protect themselves from falling victim to these scams. It is good practice to have any used vehicle inspected by an independent mechanic not associated with the dealership prior to purchase to receive an honest evaluation of the vehicle. You can also use Carfax or do a title search to help ensure your vehicle does not have one of the above problems.

Educating consumers on the lemon law is an important initiative at Kahn & Associates, L.L.C. A car is a major investment for your family, and an improperly functioning vehicle can cause financial hardships for any household. With that said, small businesses and organizations also feel the wrath of poorly built vehicles. School districts, landscapers, flower shops, churchs, and many other small businesses should be aware that they too have protection under lemon laws.

The lemon law differs from state to state, but generally includes SUVs, vans, trucks, school busses, and boats, as well as cars. In addition to state lemon laws, there is also a federal lemon law. So if you've been told that you do not have a claim under your state's lemon law, you may have a claim under the federal lemon law.

Defects that include the engine, brakes, transmission, steering, vibrations, smells, and many more qualify under most lemon laws. So, the next time you're in a meeting at the small business you own, work for, or even volunteer for (School Districts), make sure your team knows about the protection afforded under the lemon law!

Helpful Tips to Get Back on the Road

What is a Lemon in the first place? Well, determining that can be tricky. Your State's Lemon Law defines when a manufacturer has breached its written warranty and what the victim is entitled to for such a breach of warranty. In addition, there are various other warranty laws (or Lemon Laws) within each state and on the Federal level which can be used to recover money for consumers who do not meet the strict definitions contained in their state's Lemon Law.

Here are some important things to remember to avoid a problem car and protect yourself should a serious problem arise:

• Prior to delivery of your new vehicle, complete a visual inspection in order to detect any problems or issues. Refuse delivery of the vehicle demanding correction. A major "don't" is accepting a dealer's promise that all issues will be fixed during a future service appointment.


• Keep copies of all of your repair orders any time your vehicle is taken in for service. Be sure to request a detailed repair order each time your vehicle is worked on, even if you are told that "no problem was found" by the dealership. You never know when you might need these down the road. No one expects to have a lemon when they begin taking their vehicle in initially.


• Make sure you have receipts for all oil changes! Follow the maintenance guidelines provided within your vehicle's owners manual.


• Retain copies of literature provided by the vehicle manufacturer for your specific vehicle. This should include brochures, warranties and advertisements. This will assist you in providing proof of any statements or claims a manufacturer makes about your vehicles performance or features.


• Don't take the dealer's word for it that the problem you are experiencing is "normal." Go to another dealer, find out from others online or call a lemon law firm to find out if other people are having this problem.


• Try a different dealership if the one you are taking it to cannot fix your problem satisfactorily. Your warranty usually says that you are entitled to take your vehicle to any authorized dealership, not just the selling dealer.

Have you ever taken your vehicle into the repair shop only to have them say something like this: "Well, we couldn't duplicate the problem." Consumers often hear repair shops tell them this, and for most, this is extremely frustrating. The truth is, many times, the dealer failed to even look properly because the dealer has little incentive to spend the time to actually repair your vehicle. Here's why:

Technicians Are Paid On Commission!

That's right. Dealer Technicians who do warranty work are not paid to "fix" problems. They are paid a certain rate for the type of "job" that is listed in the "book." There is a labor time guide that is used throughout the auto repair business called the "Mitchell Manual." For example, it may list that replacing a water pump should take 2.5 hours. They get paid this whether the vehicle is actually repaired or not.

Warranty Jobs Are Typically Paid at a Lower Rate

The book will typically list one time for a retail job (e.g. 2.5 hours) and a smaller amount of time (e.g. 1.5 hours) if the same job is a warranty repair! So, if the technician actually took 2.5 hours to do the work and the book lists 1.5 hours, the technician would not be getting paid for an hour of his labor. Conversely, if the technician does the job in less than 1.5 hours, he/she is making a premium.

Therefore, one of the following is bound to occur:

• The technician chooses the fastest alternative that will give him the greatest rate of pay, even if this is not most likely to actually fix the vehicle!
  
• The technicians try to beat the book rate to fit in as many vehicles as they can during a day so they are being paid more than their actual hours, not doing their best work on each, compounding the problem with your lemon vehicle!
• 
  The technician will "cherry pick" the more lucrative customer-paid jobs, the ones that put the most dollars in his pocket, and "shove the warranty work off to the last." When the day is over and you want your car back, they simply report that they were unable to duplicate the problem.

Therefore, the hard warranty jobs are often not done, such as finding an "intermittent" problem that requires driving the vehicle or following electrical wires to find electrical problems. It's easier to say "unable to duplicate" or "no problem found," and make the consumer think it is their problem.

The Problem Really is "Intermittent"
Of course, there is always the possibility that a dealership's inability to duplicate a customer's concern is that the problem with the vehicle is intermittent (i.e. it occurs unpredictably and occasionally and usually not when you take it in to the dealership - Murphy's Law being what it is.) What's not fair to the consumer, is that intermittent problems with vehicles are quite common and the manufacturer will normally refuse to permit the franchise dealer to make any warranty adjustments unless one of their trained technicians personally observed the problem. Sometimes, there are technical service bulletins on the problems indicating that the manufacturers are aware of the problem, yet they still won't authorize the payment!

Therefore, if you have a vehicle that has been in for repairs, never assume that the dealer has your best interest in mind. As with any vehicle that has been repaired multiple times, the problem often comes back due to the dealer's unwillingness to put in the proper amount of time to correctly fix the vehicle.

Labels: Lemon Law