California Lemon Law Lawyer Blog

On January 30, 2009, the federal safety agency will make available a national database on stolen and totaled (salvage) vehicles. Consumers may go to www.nmvtis.gov for information on how to use the system. At this time, the database has information from only 27 states that cover 73% of U.S. vehicles. A federal law requires all states to participate by 2010.

Starting March 30, 2009, salvage yards, junk yards, and insurance companies must provide information on junked cars for inclusion in the database.

Shamefully, California, New York and Pennslyvania officials are balking at participating. Observers say it may be because those states get revenue from supplying vehicle information to private databases (presumably Carfax and AutoCheck). Presumably this will get worked out in time.

Three consumer advocacy groups had to sue the U.S. Department of Justice to get this done. Rosemary Shahan of Citizens for Auto Reliability and Safety led the way.

As most car buyers know, Carfax.com sells auto histories. Carfax' website tells consumers, "Don't buy a used car without CARFAX Vehicle History Reports! Order a CARFAX Vehicle History Report. . . the first step to protecting yourself against buying used cars with costly hidden problems. CARFAX searches its nationwide database and provides a detailed vehicle history report in seconds."

Carfax' advertising is deceptive because the reports often do include the most important information a car buyer should know--whether the car has been in a serious collision.

Reporters at a Vancouver, B.C. TV station just completed an investigative report on the unreliability of Carfax reports. The report gives examples of cars that had been in severe accidents that had "clean" Carfax reports. Car dealers use the Carfax reports to convince buyers the vehicles had never been hit. Car dealers typically buy cars at auto auctions where any frame damage is usually disclosed. Car dealers can determine if cars have been in accidents by inspecting for after-market components and unrepaired damage.

Chrysler is having repair problems with its 2007 and 2008 Dodge RAM trucks equipped with the 6.7L Cummins turbo diesel engine. Typically, the check engine light comes on causing the owner to take it in to their dealer for warranty repairs. The dealers often find problems with the engine computer controls, the emissions system, the turbo, and the transmissions.
Dodge has issued technical service bulletins on these models dealing with engine control software issues and excessive turbocharger soot accumulation resulting in emissions problems. KABOB attorneys have arranged a number of repurchases of these model trucks on behalf of owners of these trucks.

Buyers often trade in cars with outstanding loans on the the dealer's promise it will pay off the loan. Honest dealers promptly do so, but a small number of dishonest dealers do not pay off the loan. When that happens, the lien-holder finance company usually finds the car and reposses it leaving the consumer out the down payment, payments, and no car. Alternatively, the car is not repossessed, but the buyer cannot get clear title because of the lien.

Dealers engaging in this type of fraud are often about to go out of business. When DMV finds out about the practice, DMV revokes their license to sell cars. The dealers usually disappear.

This law firm has represented a number of clients who have been the victim of these practices.
On January 4, 2009, the New York Times reported on such dealer practices. The article quotes Bryan Kemnitzer of this firm who represents a consumer who bought a car from Vacaville Ford with a lien on it resulting in her inability to register it with DMV.

On January 7, 2009, the San Francisco Chronicle reported on the same practices quoting victim Stephanie Feliciano, Roseville, CA. Feliciano traded in a Camry to a Sacramento dealer who failed to pay off the loan on the Camry. Mark Anderson of this law firm represents her in a pending action against the dealer bond company.

All California car dealers must post a $50,000 bond to protect consumers who are defrauded by car dealers. If the buyer obtained a new loan that was arranged by the selling dealer (on top of the existing loan), the buyer may sue the new lien holder for damages since the new finance company is subject to the same claims the buyer has against the dealer.

Safety advocates are concerned about defective Chinese auto parts such as tires susceptible to tread separation and child restraints that come apart in an impact. Other examples are tire valves that break and let air escape, glass that does not meet standards for tempered glass, and high-intensity discharged headlights that do not meet U.S. federal safety standards.

Clarence Ditlow of the Center for Auto Safety said that so many Chinese parts are coming into the market that U.S. safety officials cannot keep track of them. Ditlow researched recalls ordered by National Highway Safety Administration finding that the agency had ordered recalls on a number of faulty Chinese products.

The importer/distributors are often undercapitalized and may not be familiar with U.S. safety regulations. For example, one recall involved kits to convert headlights to more powerful high-intensity lights that the importer was selling on eBay. The importer kept his inventory in a closet.

A related problem is that some importers may not have the resources to carry out a recall. An importer of Chinese made tires in New Jersey recently struggled to recall 255,000 tires.

Christopher Jensen reported on this story in the New York Times on 12/20/08.