California Lemon Law Lawyer Blog

In July 2010, Honda announced new software for the IMA batteries in the 2006-2008 Civic hybrids. The purpose of the update was to prevent the batteries from deteriorating. Since the batteries are under 10 or 15 year warranties, Honda would have to pay for replacements. The problem is that the software update caused a 25% reduction in fuel mileage and a 25% loss of power. Owners are not happy with the results needless to say.

Honda has repurchased two Civics from owners I've represented. I have three other cases pending or others about to be filed. But here's a warning and some advice to unhappy Civic owners--a pending class action settlement in the Superior Court in San Diego county will wipe out owners' claims if, as expected, it is approved by the Court. The settlement provides for a payment of $100 to all Civic hybrid owners based on Honda's misrepresentations of fuel economy back when the cars were being sold and another $100 to Civic owners who file a claim stating they are unhappy with the results of the July 2010 software update.

Owners of 2006, 2007, and 2008 Civic hybrids throughout the U.S. are affected. Unless owners are satisfied with the $200, they should "opt out" of the settlement and find an attorney to file their own case. The procedure is simple--just write a letter to the Settlement Administrator, P.O. Box 2566, Faribault, MN 55021-9566 stating your name, address, year of your car and the VIN and that you want to be excluded from the settlement. Deadline to opt out is February 11, 2012. If you don't opt out, you will be precluded from bringing your own case. Of course, if you don't wish to bring your own case, you may fill out a claim form and get the $200. More information on the settlement is available at www.hchsettlement.com.

http://www.youtube.com/watch?v=vwiv23dLhMY

2006 Jeep Wrangler owners are reporting they experience a violent shaking at certain speeds.
Check out the You Tube video.

One owner, Heidi Schwartz of Annapolis, MD, said her 2006 Wrangler shakes between 50 and 60 miles per hour causing a near loss of control.

The federal safety agency website, safercar.gov has 436 complaints about 2006 Jeep Wranglers.

Clarence Ditlow, executive director of the Center for Auto Safety, has been pushing the safety agency, NHTSA, to take action since it is a safety issue.

Rosemary Shahan, president of Consumers for Auto Reliability and Safety called NHTSA's lack of action "mind-boggling." She plans to contact NHTSA's Office of Defects Investigation to ask for action. "NHTSA is the pressure point," Shahan said. "I don't see how you can say with a straight face that this is not a safety defect.

Buy Here Pay Here used car dealers prey on people who cannot buy a car because their credit scores are very low. Most of these people need a car. The Buy Here Pay Here car dealers do not use outside lenders to finance car sales; instead, they finance in-house. When a person buys a car, he or she agrees to make payments to the car dealer.

The problem is that these dealers have tremendous opportunities to take advantage of their vulnerable customers. They charge interest rates on the financing of 30% or more. They markup the vehicles, which are usually one step from the junkyard, of 100% or more.

The dealers do not care if the buyers default as they often do given the high prices of the cars and sky-high interest rates. When buyers miss a payment, the dealers repo the car and sell it to the next guy keeping the prior buyer's down payment and monthly payments.

A Los Angeles Times reporter has written a fine report on this predatory business. He reports that Wall Street investors are putting money into such dealerships and even securitizing the car loans.

I am representing a buyer in a lawsuit against Autoville Motors in Sacramento, which is one of the Buy Here Pay Here dealers.

The reporter traced the history of one car sold eight times by the same Pay Here dealer.

Continue reading "Buy Here Pay Here Used Car Dealers Rip Off Consumers" »

Joe Ducey, a reporter with the ABC affiliate in Phoenix, is reporting that cars caught in floods in the Phoenix area are being sold in the that area. Ducey counted 36 being sold one day in Phoenix.

The cars are listed on the Insurance Auto Auction's website as flood cars. The cars were totaled due to flood damage.

Consumers for Auto Reliability and Safety warns that flood cars are likely rotting from the inside -- with ruined electronic systems, brakes, airbags, or engine components. Some of these vehicles might have gotten cosmetic fixes in order to sell the car, and a buyer may not notice. In Arizona, which has weak consumer protection laws, has no special designation on titles for flood. So, they could be seen as clean titles.

Before buying any used car, check the Vehicle Identification Number (VIN) through the National Motor Vehicle Information System (www.add123.com). This is often a more up-to-date system than Carfax.com or AutoCheck.com.

Joe Ducey is an excellent consumer reporter who formerly worked for Channel 4 in San Francisco.

If you are shopping for a used car in Japan, be warned. It may be radioactive! Dishonest car dealers are selling cars contaminated by radiation from the Fukushima Daiichi nuclear plant meltdown.

The cars were supposed to have been destroyed. However, some dealers registered cars under new license plates and sold them according to the Asahi Shimbun newspaper. Dealers initially tried to export the cars to Russia, but the police turned them back after finding they were radioactive. Testing at the docks in Japan has stopped exports of the contaminated cars.
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One van that was re-registered and sold within Japan was found to emit 110 microsieverts of radiation an hour, which is 300 times the legal limit.

This story is on the NBCLosAngeles.com site.

Consumer's Checkbook, which is a nonprofit magazine and website available by subscription at $34 per year, annually publishes the results of its survey of persons who have deal with Bay Area auto repair shops. The surveys cover price and quality of work. Of the 559 shops evaluated, 221 were rated "superior" for their overall quality by 90% or more of their surveyed customers. On the other hand, 66 shops were rated "inferior" for overall quality by at least 20% of those surveyed.

Checkbook found no relationship between shops' prices and the quality of their work! Checkbook also found that price differences can be dramatic. Replacement of belts on a Honda Accord ranged from $506 to $1,200. Hourly rates ranged from $80 to $196.

Persons who did business with new car dealers' service centers rated their overall performance as superior only 61% of the time. Persons rated non-dealer repair facilities superior 87% of the time. This may prove that non-dealers have to try harder to stay in business.

Using its site, checkbook.com, you can sort and select shops by such factors as location, whether the shop does in-factory repairs, and by considering price and quality.

Today, Gov Jerry Brown signed into law new protection for California car buyers. The law will help protect consumers from unknowingly buying an unsafe, stolen or junk car.

The new law requires all car dealers post a red sticker any cars that were sold as "junk," salvage," or "flood" vehicles. The warning will tie into a federally mandated database -- the National Motor Vehicle Title Information System (NMVTIS). NMVTIS is maintained by the U.S. Department of Justice. It is the only car database as to which 100 percent of the nation's insurers, junk and salvage yards, and state motor vehicle departments are required to report updated title information every 30 days.

Rosemary Shahan, the sponsor of the bill said that "consumer advocates have long sought the protections offered in this bill. For the first time, auto dealers will be required to provide vital information about a vehicle's safety, reliability, and worth before consumers even start negotiating. In California, millions of the most hazardous cars will be marked with a red sticker to warn consumers that they merit close scrutiny or should be avoided."

Last year, over 800,000 used cars were sold through new car dealerships in California. The new law bill be effective January 1, 2012.

Today, in a victory for consumers, the 9th Circuit Court of Appeals held that auto makers cannot force consumers into binding arbitration in lemon law cases. The case arose after a federal district judge in Santa Ana held that the car buyer was not entitled to his day in court, but instead had to take his claims to binding arbitration. The judge based his decision on an arbitration clause in the purchase contract. Car dealers typically include arbitration clauses in the fine print on the reverse side of the contract that on their face preclude buyers from suing the dealer. In this case, Porsche, the manufacturer tried to piggy-back on the dealer's arbitration clause.

The buyer was seeking damages due him under the federal Magnuson Moss Warranty Act, a federal lemon law.

On appeal, Porsche argued the arbitration clause was binding on the buyer and that the buyer could not proceed in court with his warranty claims based on the federal MMA. The Court rejected that argument citing a FTC rule published in 1975 interpreting the MMA which rule prohibits car manufacturers from forcing consumers into arbitration schemes in lemon law cases. The FTC recognized that the manufacturers would set up arbitration panels unfavorable to car buyers. The case is Kolev v Euromotors West and Porsche Cars North America, No. 09-55963.

The California Court of Appeal yesterday ruled that trucks used for business purposes weighing up to 10,000 lb. are covered by the California Lemon Law. This question arose in a case involving a Ford F-250 that the owner used primarily for business purposes. The Lemon Law has long covered all vehicles used primarily for personal use. The law was amended so that vehicles used primarily for business purposes were also covered, but coverage was limited to vehicles that have a "gross weight" of less than 10,000 lb.

The owner's Ford F-250 truck weighed 6,787 lb. The truck has a gross vehicle weight (GVWR) rating of 10,000 lb. The GVWR relates to safety and is the manufacturer's recommendation of the maximum the truck should weight counting the weight of the truck itself plus the weight of the passengers, equipment and cargo.

After the jury entered a verdict for the owner, the trial judge dismissed the case accepting Ford's argument that truck was not covered by the Lemon Law since the GVWR was 10,000 lb. Ford argued that the reference to the "gross weight" of the vehicle in the statute meant the vehicle's gross vehicle weight rating. The appellate court reversed the trial court ruling and reinstated the jury verdict.

The Court of Appeal held that the F-250 was covered by the Lemon Law because the actual weight of the truck itself is what counts and that the GVWR was a different matter. The decision is a binding precedent on all of California's trial courts and as such will will put to rest Ford's crusade to exempt its trucks used for business purposes from the scope of the California Lemon Law. (Joyce v Ford Motor Company).

San Francisco's Channel 5 ran a nice story on the case.

The 2005-2010 Nissan Frontiers, Pathfinders and Xterras with five speed automatic transmissions may leak coolant into the transmission causing rough shifting. Last October, Nissan extended the warranty on these vehicles to 8 years or 80,000 miles. Nissan blames the problem on a cracked oil cooler tube.

In a NY Times story on its Wheels blog, an expert is quoted as saying, “This is a total failure of the cooler portion of the radiator that is responsible for the cooling of the transmission."

The federal safety agency has at least 200 complaints about transmissions on those vehicles and the Center for Auto Safety has almost 50.

The Center's director Clarence Ditlow states, “It is one of the bigger transmission problems that we see. It is costly and it can cause an immediate failure."

A letter from Nissan to owners notifying owners of the warranty extension talked about the coolant leak, but failed to mention that the leak may cause transmission problems. When challenged on this point, Nissan's spokesman said they did not want to "get too deep into details."

Over past years, thousands of owners have submitted reports of problems with their cars to www.carcomplaints.com, a site dedicated to exposing trouble spots in cars. The site has now created useful sites on each manufacturer's model cars that have the number of complaints, recalls, government investigations and technical bulletins issued. The data is presented in easily understood graphic form. Each site also has a useful listing of the latest problems reported by brand and model. You may go to www.carcomplaints.com to see the URLs for the sites covering each of the auto manufacturers. Anyone shopping for a new or used car will find these sites useful.

A bill moving through the California Legislature, AB 1215, will require California used car dealers selling junk, salvage or flood vehicles to put a sign on the vehicle warning buyers the car is a junk, salvage and flood vehicles. Prior to any sale, the dealers will also have to provide the buyer a vehicle history report from the National Motor Vehicle Title Information System (NMVTIS). NMVTIS is an electronic database that provides consumers with information about a vehicle's condition and history.

The bill has passed the Assembly and a key Senate committee. The car dealers' association is supporting the bill and hence is almost sure to be approved by the Senate and Governor.

The rationale for the bill is that athough diligent purchasers can arguably already search and retrieve vehicle history information from Carfax.com or Autocheck.com, the proposed disclosure will assist consumers who are on a car lot comparing two vehicles side by side. If one vehicle has a warning (and one does not), the consumer will be able to make an informed decision after asking the dealer to see a copy of the NMVTIS report.

The sponsor of the bill, Consumers for Auto Reliability and Safety (CARS), explained that

vehicles with a history of prior major damage tend to be
unsafe, and worth far less than similar undamaged vehicles.
For example, they may lack air bags, have bent frames that
make them prone to tipping over in an emergency braking
situation, or have electronic systems that are corroding and
will inevitable malfunction because the vehicle was
submerged in flood water. In fact, whether a vehicle was
totaled or not may be the single most important piece of
information that car buyers need to know, in order to make
an informed comparison between two otherwise similar
vehicles. . . . AB 1215 promises to be a vitally important
next step toward curbing salvage and rebuilt wreck frauds
and ensuring that NMVTIS fulfills its potential for
benefiting the public.