March 9, 2010

California DMV Makes it Easier for Consumers to Access Used Car History

California is now one of 31 states to offer the public online access to used car history reports after consumers rallied for DMV report procedures to be more consumer-friendly. In fact, according to a national report from the LA Times website, California residents desiring to purchase a used vehicle can now check the history of the vehicle online for a small fee of $4; a charge significantly less than other car information firms.

The new arrangement, run by the American Association of Motor Vehicle Administrators for the Justice Department, will allow residents to purchase a detailed outline of a used car’s background, including information from insurance companies, auto-body shops, junkyards, and other sources that reveal if a car was stolen or if the odometer was modified. Prior to the new setup, the DMV had an agreement with an outside source, R. I. Polk & Co., who maintained an extensive car history database. However, that agreement gave Polk the right to sell information to the public at its own discretion.

A consumer group, Consumer Action, says the new DMV data reporting system, 18 years in the making, will help shoppers to be more careful when considering a used car and avoid poorly maintained and unsafe vehicles. To have your vehicle assessed, check out http://www.vehiclehistory.gov.

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February 3, 2010

How to Protect Yourself from Buying a Used Lemon Car

A recent U.S. News & World Report article discusses certain “deal breakers” that a consumer should look out for when buying a used car. According to the article, some of the “red flags” that consumers need to pay attention to include frame damage and models that have persistent problems or constantly fall short of quality and functionality standards (a.k.a. a lemon vehicle). The article also mentions that a car with water damage, a missing or altered Vehicle Identification Number (VIN), or a history of being used by police or as a taxi should be avoided when buying a used vehicle. It is also important for a potential car owner to spend time examining a car and to consider having a mechanic conduct a pre-purchase inspection.

In comparing purchasing a car to getting married, the report acknowledges that the process of buying a used car, and the subsequent use and care of that vehicle, involves legal, financial, and time commitments. Although many consumers rely on vehicle history reports when deciding whether or not to buy a particular car, if a previous owner did not report an accident to the police or their insurance, then it is not going to be on the history report. As a consequence, a vehicle could be damaged even if that does not appear to be the case.

While discovering that your used car has more problems than you were initially led to believe is not a pleasant experience, fortunately, consumers are protected when adversely affected by used car fraud, unfair business practices, or a lemon vehicle. For more information about how you may be able to receive a full refund or replacement vehicle, contact attorney Howard D. Silver. Call 866-49-LEMON today for a free consultation. You can also refer to Howard D. Silver’s Consumer’s Guide to Buying a Used Car in California for additional information.

Source article: http://usnews.rankingsandreviews.com/cars-trucks/The-Worst-Used-Cars-You-Can-Buy/

January 28, 2010

22,000 Chevrolet Corvettes Recalled Over Faulty Roof and Frame Design

Although we would like to believe that our vehicles are ultimately free of imperfections, this is not always the case. According to a detnews.com article, GM has recalled 22,000 Chevrolet Corvettes due to concerns that the vehicle roof may fly off while being operated.

General Motors informed the National Highway Traffic Safety Administration that its 2005-07 model year Corvettes and Corvette Z06 models contain adhesive between the roof panel and frame that may come apart. GM is supposed to install a redesigned roof panel for affected vehicles as well as reimburse motorists who have already had their roofs repaired or replaced.

GM released the following statement: "If there is a partial separation, the driver may notice one or more symptoms, such as a snapping noise when driving over bumps, wind noise, poor roof panel fit, roof panel movement/bounce when a door or hatch is closed, or a water leak.”

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January 6, 2010

Over 13,500 Sprinter Vans Recalled

It was announced on November 15, 2009 that over 13,500 Sprinter vans sold as Dodge and Freightliner vehicles were being recalled. According to an automotive-fleet.com article, the model vans in question include MY 2002-2003 Dodge Sprinter 2500 and Doge Sprinter 3500.

Based on the National Highway Traffic Safety Administration’s report, the intake manifolds in these vehicles may have been destroyed. It is suspected that “under certain conditions”, sulfur in the diesel fuel is capable of creating a chemical reaction, causing sulfuric acid to form in the exhaust channel of the intake manifold. The consequences of the intake manifold decay may contribute to an exhaust gas leak, harm to the fuel return line that could bring about a fuel leak, and heat destruction to the insulation at the front wall.

In addition to Chrysler LLC informing vehicle owners about the recall, van owners may contact Chrysler by calling (800) 853-1403. Auto dealers are supposed to examine and replace the intake manifold at no expense to van owners.

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December 30, 2009

Electric Sports Car Maker Hints at IPO Filing

Tesla Motors, most widely known as a U.S. electric sports car maker, may soon go public with an Initial Public Offering (IPO). Typically issued by an up-and-coming company looking for capital to expand, an IPO may also be filed by a large privately-owned company hoping to be publically traded. An IPO will consist of common stock or shares presented to the public for the first time. In addition to the strong reappearance of electric vehicle technology, Tesla Motors continues to demonstrate that the future of green technology for automobiles is very bright.

According to a reuters.com article, an IPO filing by Tesla Motors, manufacturer of a $109,000 all-electric Roadster, may be confirmed soon. If the public offering goes through, it would be the first from a U.S. automaker since Ford Motor Company in 1956.

With the Obama administration’s goal of having approximately one million rechargeable vehicles on U.S highways by 2015, and with the support of low-cost Department of Energy loans for manufacturers, there may be quite a significant increase in electric vehicles on California roads in upcoming years.

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December 23, 2009

Understanding California's Vehicle License Fee Increase

In a previous post, we discussed California’s Vehicle License Fee (VLF) increase that was initiated in May of this year. Although it is understandable why vehicle owners would object to an increase in fees, as a part of the state’s budget plan to combat a $42 billion shortfall, there isn’t really anything we can do about it.

To jog our readers’ memory, the new legislation that enabled DMV to raise the VLF from 0.65% to 1.15% for registration payments due on or after May 19, 2009 applies to trailer coaches, automobiles, motorcycles, and commercial vehicles with confirmed gross operating weight lower than 10,001 lbs. The VLF enhancement may last until June 30, 2013. If you are not sure as to the exact vehicle license fee you must pay, you can check your vehicle registration renewal notice or validated registration card. You can also visit www.dmv.ca.gov for more information.

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December 15, 2009

Number 1 on Consumer Holiday Wish-List: Used Car Buyers Guide Update

According to a nytimes.com article, state lemon-law administrators, consumer groups, and the attorneys general from 40 states are hoping that the Federal Trade Commission’s Used Car Buyer’s Guide receives an update. The F.T.C.’s Buyer’s Guide is required to be placed in every used vehicle by auto dealers. In claiming that the Buyer’s Guide has not been significantly improved since its appearance in 1985, consumer advocates would like to see a change in the current emphasis on warranty information.

Based on the article, the National Association of Attorneys General believe that it is time to protect buyers from rebuilt wrecks, or lemons, that may not be safe, may be overpriced, or both. On the other hand, the article mentions that the National Automobile Dealers Association opposes adding any information about a vehicle’s negative history pertaining to damage because it represents “far-reaching changes” that would “impose significant, costly, and in some cases, impossible burdens on used car dealers.”

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November 30, 2009

New Legislation to Protect Used-Car Buyers in California

In addition to the Consumer Legal Remedies Act of California, which protects consumers by prohibiting used-car dealers from using deceptive and unfair business practices to sell their cars, new legislation (Senate Bill 95 and Assembly Bill 647) advocated by criminal justice officials and consumer protection groups will go into effect in January 2010.

Senate Bill 95, also referred to as the California Car Buyers Protection Act, will require auto dealers to have outstanding liens (legal claims on a vehicle as security for a debt) completely paid off before trading or selling a used car. Additionally, Assembly Bill 647 gives consumers access to a national database containing title, theft and other important vehicle information.

One State Senator commented that Senate Bill 95 will assist consumers who are already battling the tough economy. In fact, some car dealers have gone out of business due to the economy, leaving consumers with unpaid liens on vehicles that they traded in. Based on the article, the president of the Sacramento-based nonprofit Consumers for Auto Reliability and Safety stated that SB 95 “will help law enforcement agencies crack down on violations before hundreds of car buyers have their credit ruined at a single dealership.”

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November 24, 2009

Creator of the Song-Beverly Act Remembered

An article from latimes.com reported that Robert G. Beverly, a well-known lawyer and Republican who worked in the state Legislature for almost 30 years, passed away on Wednesday, October 14, 2009 from complications connected to Parkinson’s disease. He was 84-years-old. According to the report, one of Robert G. Beverly’s major contributions was the creation of the Song-Beverly Consumer Warranty Act. His innovative consumer-protection legislation led to what so many consumers know today as our California lemon law statute. What many consumers don’t know is that the Song-Beverly Act dates back to 1970 and is the foundation for the consumer protections we now enjoy.

Thanks to the hard work of Mr. Beverly, citizens are protected from unscrupulous car dealers selling “lemons” and manufacturers that are unaware that their vehicles are flawed in some way. Pursuant to the lemon law, consumers may receive their money back or a replacement vehicle when the vehicle they purchased is defective.

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November 18, 2009

3.8 Million Vehicles Recalled Due to Dangerous Floor Mats

Consumers and citizens throughout the U.S. were shocked to hear that 3.8 million vehicles were being recalled by Toyota Motor Corp. due to poorly designed removable floor mats that increased the likelihood of accelerators getting stuck, cars accelerating out of control, and subsequent car accidents. According to a huffingtonpost.com article, this is Toyota’s largest recall to ever take place in the U.S. According to a Toyota spokesman, "A stuck open accelerator pedal may result in very high vehicle speeds and make it difficult to stop a vehicle, which could cause a crash, serious injury or death."

As Toyota works with officials from the National Highway Traffic Safety Administration (NHTSA) to find a solution for the faulty floor mat issue, owners of these vehicles have reportedly already been notified of the recall. Also, until the problem is fixed, consumers have been advised to take the removable floor mat out from the driver’s side of the vehicle and not substitute it with a replacement.

So what triggered this recall in the first place? Sadly, a high-speed collision took place in California in August involving an out-of-control Lexus automobile exceeding speeds of 120 mph due to a stuck accelerator. In addition to this tragic accident, NHTSA stated that 102 other incidents were reported regarding accelerators on Toyota vehicles that also may have become stuck due to the faulty floor mats.

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November 9, 2009

California Man Arrested for Auto Insurance Fraud

There are many different kinds of fraud associated with motor vehicles. Although consumers are typically more concerned with used car fraud or auto repair fraud in California than they are with auto insurance fraud, insurance schemes also have the potential to affect the wallets of consumers. A recent article from insurancejournal.com reported that a 56-year-old San Jose man was arrested for auto insurance fraud and faces criminal charges for filing a counterfeit motor vehicle claim, perjury, and falsely reporting a crime.

According to the story, this particular man went as far as reporting his “stolen” vehicle to the San Jose Police Department and filed a stolen vehicle claim with his insurance company. Sentry Insurance suspected the claim was fraudulent and reported the incident to the Department of Insurance. An investigation conducted by the California Department of Insurance (CDI) discovered that before the man reported his vehicle to be stolen, he purportedly tried to use the car as collateral for a loan. This incident serves as an important reminder that although our economy is struggling, turning to fraudulent actions is not a solution and there is no excuse for such behavior.

Based on the article, the California Department of Insurance received approximately 300 more vehicle theft and arson claims in 2008 than 2007. For consumers who really have had their vehicles stolen, fraudulent cases do nothing more than make the recovery process that much more difficult.

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October 7, 2009

California Steering Bill Drives Off the Beaten Path: Senate Does Not Approve

There has been much controversy lately regarding California Assembly Bill 1200, also known as “the steering bill”, which did not pass this week in a 19-17 Senate vote. California Assembly Bill 1200 would remove restrictions against an insurer to require or suggest that a vehicle be repaired at a specific auto repair dealer. If the bill had been approved, insurers would have apparently had more leeway in steering customers to their preferred shops. According to a report, it is possible that the bill may be reintroduced.

At the heart of the criticism is the notion that it does not give consumers the protection they need or require. A California-based consumer advocacy group that opposes the Bill, Consumer Watchdog, has published multiple insurance company documents that are said to show evidence of anti-consumer practices and direct repair programs (DRPs) that do not really help consumers. In fact, one contract between an insurance company and its desired group of body shops revealed that the auto body shop was being pressured into maintaining lower costs, at the expense of having their contract terminated if they did not comply.

The executive director of Consumer Watchdog said that these questionable contracts create “reverse competition.” Instead of competing for customers, body shops are fighting for insurer referrals, which are ultimately determined by the shop’s capability of cutting its rates, thus leading to poor auto repair work stemming from those cut-rate prices. In addition, another document revealed that a body shop was reprimanded for using more factory parts than an insurance company preferred. Also, it was recommended by the insurance company that the body shop use more after-market parts to lower costs.

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September 29, 2009

Increase in Auto Sales from Rebate Program: Does the Lemon Law Still Apply?

This summer has shown how far a little innovation can go when it comes to giving consumers incentive that really works in purchasing vehicles, especially in a struggling economy. The National Highway Traffic Safety Administration’s CARS rebate program, also known as cash for clunkers, proved successful as consumers traded-in their cars for more fuel efficient vehicles, receiving credit starting at $3,500 and up to $4,500.

According to a report, foreign automakers finished the sales race ahead of domestic automakers. Out of the estimated 700,000 autos purchased through CARS, 61.4% were foreign-made cars. With so many new vehicles hitting the road, particularly those that have been sitting on car dealership lots for an extended period of time, many consumers may be wondering if the California lemon law applies to vehicles purchased through the CARS program.

The answer of whether or not your vehicle bought through the program falls under the lemon law in California depends on the reasonable amount of attempts the manufacturer has made to fix your vehicle. Overall, if the vehicle you obtained through the rebate initiative turns out to be defective in some way and a lemon law candidate, it is highly possible that you may be able to get your money back or have your vehicle replaced.

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September 2, 2009

Electric Car Federal Grants May Contribute to Funding Increase

$2.4 billion dollars in federal grants that will go towards the production of electric cars was announced on August 5, 2009 by President Obama while in the state of Indiana. According to a report from the LA Times website, the large sum is to go toward reducing oil imports and lowering greenhouse gas emissions. The money will be split up in the following ways:

  • $1.5 billion – for production of advanced batteries that could allow electric cars to drive long distances on a single charge;

  • $500 million – for drive trains for electric cars; and

  • $400 million – to purchase and support thousands of electric vehicles that will serve as demonstration models.

Thanks to a near $800 billion economic stimulus bill that Congress passed earlier this year, the reported sum will be made available to help our nation’s environmental goals progress and stimulate the auto industry. Living in a competitive world, the federal grants could launch the U.S. into world leadership for the production of electric cars.

As a follow-up to his May proposal of strict new federal standards for greenhouse gas emissions for trucks and cars, President Obama has introduced the means for automakers to create a new generation of high-efficiency vehicles that can be more readily available to consumers. Another positive twist on the “single largest investment in advanced battery technology for hybrid and electric-drive vehicles ever made” is that an estimated tens of thousands of manufacturing jobs will be created.

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August 26, 2009

Common California Lemon Law Questions Answered

With millions of cars relied on by drivers across the country, we depend on our vehicles to function properly and get us to and from where we need to go without breaking down. If you’ve been experiencing a suspicious amount of problems with your vehicle, you may find yourself asking if you have a lemon. The California Department of Consumer Affairs website provides some helpful and important information regarding California lemon law questions and answers, and explains what consumers can do in relation to consumer rights. Here are just a few of the more common California Lemon Law Q & As to get you started:

Q: How do I know if California’s Lemon Law applies to my vehicle?
A: Cars, vans, pickup trucks, and SUVs, whether new or used and that came with the manufacturer’s new vehicle warranty, should qualify in addition to the drive train, chassis, and chassis cab of an RV. Many vehicles purchased or leased primarily for business-use, personal, family, or household purposes also qualify, as well as dealer-owned vehicles and demonstrators.

Q: What vehicles do not qualify under the California Lemon Law?
A: Vehicles that have been abused or are not registered under the California Vehicle Code because they are driven off-road do not qualify. After-market parts like those found in “van conversions” also do not apply under the California Lemon Law.

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August 19, 2009

California Auto Insurance Fraud Has Made a Notable Increase

A recent article from searchautoparts.com reported that more and more cases of auto insurance fraud have been committed across California, perhaps brought on by the downtrodden economy. In fact, the California Department of Insurance (CDOI) reported a 25 percent increase in the number of suspected vehicle arson fraud cases from 2007 to 2008 and a rise in auto theft fraud referrals as well.

A CDOI Commissioner stated, “Many Californians are facing a host of financial challenges in today’s economy, but I want to remind everybody that you will only compound your problems if you break the law and commit fraud in search of a quick fix…our enforcement experts are working hard to crack down on anyone attempting to skirt the law for financial gain.”

The CDOI Commissioner said that enforcement officers examine every case brought to the Department’s attention and that referrals have been received from local law enforcement agencies, directly from consumers, and from insurance companies. The department obtained almost 300 more suspected vehicle theft and vehicle arson cases statewide in 2008 than in 2007.

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August 12, 2009

Cash for Clunkers Car Rebate Allowance System Re-Fueled by Additional Funds

We informed our readers when the Car Rebate Allowance System (CARS) program under the management of the National Highway Traffic Safety Administration (NHTSA) was launched, but no one could quite calculate its paramount affects. It didn’t even take a complete week for car dealerships to receive a flood of consumers that soaked up the $1 billion financial plan’s set-up for “clunkers” to be exchanged for vehicles with more fuel efficiency. Who could blame them? Having the chance to save money in the long run with a more environmentally friendly car by obtaining $3,500 or up to $4,500 rebates is quite irresistible.

Based on a recent report, in response to positive feedback of the program, on June 31, 2009, the House granted $2 billion more for CARS, giving more consumers the chance to join in. It’s not certain at this time how long the new funds will last, but while they do, it is bound to make lots of consumers happy now and for a good amount of time into the future.

From what we have seen up until this point in the year, auto sales in the United States have been extremely low; however, with the overwhelming response and utilization of the CARS program, auto sales have been the highest for 2009. Although this is an exciting fact that has been quite an asset to the auto industry, car fraud may be an issue for concern in some rebate sales and it is something that hopefully consumers can avoid experiencing.

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August 5, 2009

General Motors Agrees to Accept Future Product Liability in Bankruptcy Concession

A story published by Reuters recently describes General Motors Corporation’s decision to accept liability for future product defects as one of several concessions the company has made to expedite approval for a quick sale from bankruptcy. GM also said that it would alter the terms of its proposed asset sale to assuage the concerns of over 20 suppliers who objected to specifically the original terms. They also discussed the future of a joint manufacturing plant with Toyota and GM said that it was actively working on a resolution with the other car-manufacturing giant.

General Motors addresses these and several other concerns as part of documents filed in the last week of June 2009 in a New York bankruptcy court. GM has been actively working with Obama administration officials to smooth over many of the problems that arose when the company filed bankruptcy. No fewer than nine state attorney generals had objected to GM’s proposed reorganization because the original terms would have left GM buyers without any protections against product defects under state laws. GM responded by saying that it would continue to honor lemon law claims in California and throughout the nation so that if consumers purchased a defective vehicle, they would be entitled to a replacement vehicle or a refund.

The outcry over the terms of the bankruptcy caused GM and Obama administration officials to rethink the reorganization of the company and reconsider liability for future product liability claims. In a prepared statement that was part of the bankruptcy court filing, GM said, "The purchaser will expressly assume all product liability claims arising from accidents or other ... incidents arising from the operation of GM vehicles subject to the closing."

GM proposed that a new company be created under the reorganization plan to purchase the company’s best and most economically viable assets, and that the sale would be concluded by August 2009.

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July 29, 2009

New Federal Car Rebate Program Information

On July 1, 2009, a federal program signed into law by President Obama provides a rebate for people who trade in older gas-guzzlers for new, more fuel-efficient automobiles. The Car Allowance Rebate System (CARS) program is applicable to car purchases that occurred on or after July 1, 2009. People with vehicles that qualify for the program may be able to receive rebates between $3,500 and $4,500 on the purchase of a new qualifying vehicle. To qualify for the program, the following conditions must apply:

  • The vehicle traded in must be less than 25 years old by the trade-in date and in drivable condition.

  • The rebate applies only to the purchase or lease of new vehicles with a manufacturer’s suggested retail price of $45,000 or less. The new vehicle can be from a foreign or domestic car manufacturer. Pre-owned vehicles are not eligible for the program.

  • Generally, the vehicle being traded in must get mileage of 18 miles per gallon or less (different requirements apply to some cargo vans and very large pick-up trucks).

  • Trade-in vehicles must be registered and insured continuously for the full year preceding the date of the trade-in.

  • Participating auto dealers will apply the rebate at the time of purchase so no vouchers are required.

  • The CARS program runs through Nov 1, 2009 or when the program funds are exhausted, whichever comes first.

  • Vehicles traded in must be destroyed. Therefore, the value you negotiate with the dealer for your trade-in is not likely to exceed its scrap value. The new law requires the dealer to disclose an estimate of the scrap value of your trade-in vehicle.

The CARS program is implemented and overseen by the National Highway Traffic Safety Administration (NHTSA), which must publish the program’s rules and regulations by July 24, 2009. The new law requires auto dealers to register to participate in the program, and the agency will update the list of participating dealers on the website. Anyone wishing to take advantage of the program is encouraged to contact dealers in their area to see which have registered. States will license the respective dealers to sell new automobiles.

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July 15, 2009

Lemon Law Obligations Upheld

A recent story contains welcoming news for car owners who are waiting for lemon law refunds from auto manufacturer Chrysler. A new agreement has been reached between Chrysler’s new Italian owners—Fiat—and a coalition of states. The agreement is part of a bankruptcy court order which upholds the company’s obligation to pay off lemon law claims arising before the company’s bankruptcy.

The article states that as of June 1, 2009, the new agreement will allow consumers who have Chrysler vehicles made within the last five years before the company underwent bankruptcy proceedings, to collect lemon law claims if necessary.

The news comes as a welcome relief to residents of California and the seven other states that participated in the talks with Chrysler and new owner Fiat. Until the agreement was reached, the status of California lemon law claims hung in a legal limbo due to the unique standards of bankruptcy proceedings.

Under bankruptcy rules, outstanding claims for payment may not be processed without approval from the judge overseeing the proceedings. Although sources quoted in the article state that Chrysler acted promptly to request approval to begin making lemon law refunds, consumers in California and other states saw their lemon law refund checks declined by their banks due to insufficient funds.

Hopefully, the new agreement will spare future claimants the shock of having their lemon law buyback checks bounce. The new agreement will also do much to bolster consumer confidence, and may help reduce the blow being dealt to California’s Chrysler dealers. A U.S News and World report news item states that over 800 Chrysler and related dealers across the nation must cease selling Chrysler vehicles as of June 9, 2009. The beleaguered dealers have slashed prices in order to attract buyers, but until now the combination of economic uncertainty and concerns over Chrysler’s ability to honor its lemon law commitments has dampened consumer willingness to purchase a new car.

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July 8, 2009

GM Bankruptcy Creates Far Reaching Effects

On June 1, 2009, GM joined automaker Chrysler in announcing plans to enter bankruptcy. Although the Obama administration and some GM officials are hopeful that this action will bring about long-term financial health for the company, expect short-term woes to continue. A report from USA Today illustrates the effects of this decision as it propagates across the automotive industry.

Although it is not expected that GM will be sold, thus alleviating some concerns over lemon law obligations, the effects of its bankruptcy can have a far-reaching impact on auto buyers. For example, auto parts manufacturers usually make parts for several brands and models of cars. As GM slows or ceases production of cars and trucks, these parts manufacturers idle production lines. Idled production lines in turn affect the production of parts for other brands of cars.

For consumers saddled with defective vehicles, this may translate into longer, more frustrating experiences when attempting to get their cars repaired. As dealerships and repair centers close down, consumers may find that returning a vehicle is a more time consuming and costly process than it has been in the past. Erratic parts production may create long delays for owners of all car brands. Specific re-tooling for a defective part will cause considerable production delays.

While auto owners across the country could face these effects, California car owners may be hit harder by the bankruptcy of industry giants like GM. California has one of the largest markets for car sales in the United States. As the company rushes to shut down operations, the local economy suffers. Smaller parts shops and auto service stations may have to close down in the face of falling demand, thus heightening the difficulty in getting service and parts to the car buyers stuck with defective vehicles.

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July 1, 2009

Dealers Not Passing the Buck in Hard Times

A recent story in The Wall Street Journal’s Marketwatch highlights the growing problem of car dealerships that fail to forward consumer payments. During the economic downturn, more dealerships are failing to pass on consumer payments for taxes, title fees and other costs. In some cases, dealers are refusing to fulfill their obligations to pay off the remaining balance on trade-in cars, making consumers responsible for thousands of dollars in hidden costs.

Although car dealer fraud is not a new phenomenon, the economic situation has contributed to these activities. According to figures cited by the news story, the California Department of Motor Vehicles has seen the number of open cases against dealers for failing to transfer customer payments double since the beginning of 2007.

Why do car dealerships fail to pass on consumer payments? While a small percentage of dealerships may actively withhold customer payments out of a desire to commit fraud, in times of economic difficulty, plummeting cash flow may contribute to a number of these cases. If a dealership finds its flow of ready cash dwindling, anxious creditors may freeze the dealership’s funds.

Given this problem, a strange Catch-22 arises for California car buyers. Although many troubled dealerships are offering incredible discounts for new and used vehicles, these very same dealerships are the ones most likely to be unable to forward your taxes, title fees and other costs. Thus, a great sticker price could deliver a nasty surprise after the sale is complete.

For struggling dealerships, this situation can lead to a downward spiral as concerned consumers stay away from deals offered by troubled car sellers, which chokes off their cash flow and leads to the dealers being unable to pass on consumer payments.

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June 24, 2009

Chrysler Failing to Pay Lemon Law Claims?

A Los Angeles Times article reports that many car owners receiving California lemon law settlement checks from Chrysler are getting an unpleasant surprise when they cash them at the bank. Due to bankruptcy proceedings and other financial complications, many of these checks are bouncing.

In recent weeks the financial bailouts of the Big Three automakers have been the subject of intense media attention. Amid all of the coverage, very little attention has been paid to the economic “ripple-effect” created as these large companies struggle for their existence.

During bankruptcy proceedings, pre-existing expenses such as outstanding lemon law claims cannot be paid unless given “the okay” by the judge in charge of the proceedings. The sources cited in the Los Angeles Times story state, that up to this point, Chrysler has not asked for court approval so it can begin making payments.

The result is clear to see—buyback checks that do not clear the bank and innocent consumers bewildered and frustrated by an automaker’s failure to uphold its obligations. For many of those consumers waiting for rebate checks, Chrysler’s inaction on this issue affects them on multiple levels. For example, the auto manufacturer has taken their defective vehicle and these consumers may not have access to a working vehicle. Without a lemon law refund check, these same unfortunate consumers are also unable to purchase another car. Although they have the option of pursuing their claim as a creditor, under bankruptcy proceedings, the consumers may only recover a fraction of the amount owed.

The irony of this situation is that car manufacturers cannot afford the public relations damage resulting from failing to pay lemon law settlements. Manufacturers and dealers need Californians to buy new cars. However, the knowledge that a car company may not have the financial means to replace defective vehicles, heightens the uncertainty that most consumers are feeling about making large purchases.

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June 18, 2009

DOT Upgrades Roof Standards for Light Vehicles

On April 30, 2009, the United States Department of Transportation (DOT) announced in a report that the roof strength standard for light vehicles has been raised. The announcement comes as a reaction to concerns about rollover safety.

According to figures cited by the DOT, rollover accidents account for over 10,000 fatalities on America’s highways. One solution to this problem is better vehicle design and safety standards.

Currently, the roof of light vehicles (vehicles with a gross weight under 6,000 pounds) must be able to withstand a force equal to one and one half times the weight of the vehicle. The new standard doubles this amount to three times the weight of the vehicle. Additionally, both the passenger side and driver side of the roof must be able to meet this standard. In the past, only one side had to pass the test in order to meet the roof safety standard.

The DOT regulations will also be extended to heavier vehicles, which have not been required to meet any roof strength standards. Vehicles between 6,000 and 10,000 pounds will have to have roof structures capable of supporting at least one and one half times the vehicle weight without collapsing.

The new standards will be phased in beginning September 2012, and will be in full effect for 2017 models.

If you have any questions about how these new DOT standards impact the responsibility of manufacturers to provide reasonably safe vehicles to consumers, please contact the California Lemon Law Offices of Howard D. Silver. Howard D. Silver represents consumers in California who have been victims of used car and auto repair fraud, unfair and deceptive business practices, and automobile lemon law. Call us today at 866-49-LEMON.

June 10, 2009

Using Financial Institution Lists

Sometimes, finding the owner of a used vehicle can be a little more difficult than expected. A DMV report states that multiple re-sales, repossessions and other events can leave you without a clear trail to follow to the owner of the car. One resource you can use to track down a car’s legal owner is a financial institution master list.

A financial institution’s master list compiles contact information about banks, credit unions and other professional lending entities into one location—speeding up the process of finding the legal owner of a used car. Although financial institution master lists may differ in content, most will give you a certain amount of contact information:

  • Financial institution’s name

  • Financial institution’s address

  • Financial institution’s telephone number

Because banks, credit unions and other lenders may merge with other businesses or go out of business altogether, a good financial master list may include updated contact information.

Continue reading "Using Financial Institution Lists" »

June 3, 2009

DOT to Review Motorcoach Safety

The United States Department of Transportation (DOT) will review the safety of motorcoaches. The review is being made with the intention of developing a department plan for improving the safety of multipassenger transport vehicles.

The call to action comes from the department after a tragic 2008 Utah motorcoach crash which killed nine passengers and injured over 40 others. In the aftermath of that crash, an investigation revealed that both mechanical and human factors contributed to the crash, including driver fatigue, lack of seat belts and other issues. DOT Secretary Ray LaHood made the call for the review public on April 30, 2009.

Although motorcoach crashes are uncommon, several factors make the cost of these accidents unacceptably high in both human and financial terms. The factors are:


  • Lack of safety restraints put passengers at risk

  • Long periods between stops induce driver fatigue

  • The design of motorcoaches can lead to rollover accidents

  • Weak roof structures fail to support vehicles in the event of a rollover

Several agencies within the DOT will be involved in the review, including the Federal Motor Carrier Safety Association, the Federal Highway Administration and the National Highway Traffic Safety Administration. The review is expected to be finished by August 2009. Once finished, the findings of the multiagency review will be used to make recommendations to manufacturers and motorcoach operators in order to improve safety.

If you have any questions about the safety of motorcoaches, please contact the Law Offices of Howard D. Silver. Our California lemon law attorneys help protect the rights of consumers from unfair, vague, or deceptive business practices, automobile lemons and auto repair fraud. Call us today at 866-49-LEMON.

May 20, 2009

What Happens to a California Lemon Law Buyback?

Under the California lemon law, if a manufacturer fails to fix a defective vehicle within a reasonable number of attempts, the manufacturer may be forced to purchase the vehicle from the consumer. When this happens, the vehicle is now the property of the car manufacturer, who understandably wants to realize some profit from the vehicle.

In order to re-sell the vehicle, the manufacturer is required by California law to clearly identify the vehicle as a lemon law buyback.

The California Department of Consumer Affairs has created a website with information about lemon law buybacks and how to identify them on a car dealer’s lot. Here is an overview of what the manufacturer is required to include for the lemon buyback vehicle:

• Title must be in the manufacturer’s name
• Certificate of Title and Registration Certificate must be marked Lemon Law Buyback
• A Lemon Law Buyback Decal should be attached to either the left door frame, left side of vehicle, or the frame of a major entry

If you are sold a lemon law buyback vehicle, you are required to receive a hard copy notification of the defect status of the vehicle. This notification must contain the following information:

• Year, make and model of the vehicle
• VIN Number
• Title is marked Lemon Law Buyback
• Known defects experienced by previous owner
• Repair attempts made to address the known defects

If you have any questions or concerns about the California lemon laws or lemon law buybacks, please contact the Law Offices of Howard D. Silver. Call 866-49-LEMON for a free consultation with a skilled California lemon law attorney with over twenty years of experience representing consumers.

May 15, 2009

California Lemon Law Survival Guide

Although being stuck with a lemon car in California can be frustrating, it is important that you stay calm and keep good records of all details. The rules and regulations that surround California defective vehicles have to be followed if you wish to be compensated for your car troubles.

Document Repairs

A vital component for surviving a California lemon vehicle and getting compensated for your troubles, is keeping good records of repair efforts made on your vehicle. Here are a couple of key things to remember when documenting repair efforts:

• List specific problems for each repair attempt
• Include the dates that the vehicle is sent in for repair and when it is returned
• Get a copy of the mechanic’s repair assessment for each repair attempt

In California, a vehicle is presumed to be a lemon if:
• There are at least two safety (and four non-safety) related repairs in the first 18 months or 18,000 miles of ownership or at least 30 days in service to repair these defects in the same period of time.

If you have any questions of concerns about the California lemon law, please contact the Law Offices of Howard D. Silver. Call 866-49-LEMON for a free consultation with a skilled California lemon law attorney.

May 13, 2009

California Quick Guide to Branded Titles

Brands are descriptions of conditions in a vehicle’s history usually placed on the vehicle’s Certificate of Title or registration card. Brand information should be clear and specific to ensure that vehicle owners and prospective buyers are aware of what has happened to the vehicle in the past.

California Vehicle Title Brands

Currently the state of California recognizes a handful of vehicle history brands that are required by the California Department of Motor Vehicles to be disclosed on the title:

• Non-USA: Not all countries have the same vehicle standards as the USA that repairs/retrofitting that has been performed on the vehicle must be disclosed.
• Original Taxi (Prior Taxi): Vehicle used for hire and may have extensive mileage
• Remanufactured: Car has been rebuilt with used or reconditioned parts
• Salvage: Car extensively damaged, possibly junked. Cars with this brand can be repaired and returned to the roads; if so, they will bear a Revived Salvage brand.
• Warranty Return/Lemon Law Buyback: Car returned to dealer or manufacturer under the terms of the California Lemon Law. Defects may still be present.

For more information about branded titles and the California Lemon Law, please contact the Law Offices of Howard D. Silver. Call 866-49-LEMON for a free consultation with a skilled California lemon law attorney.

May 8, 2009

Beware of Loan Fraud: Auto Dealer Arrested for Loan Scheme

The California Department of Motor Vehicles reports that an auto dealer and his wife have been arrested for their part in an alleged multimillion-dollar auto loan scheme.

This California auto fraud case underscores the need for consumers to be very careful with the information that they give to an auto dealer who also provides financing. Unscrupulous dealers can use that information to apply for additional car loans or home loans, potentially putting an innocent car buyer on the hook for more than he or she bargained for.

Tips for Safe Auto Financing

• Never sign a loan application with blank spaces for the dealer to “fill in later.”
• Always read any financial application form completely before signing
• Never sign backdated financial forms, including auto loan applications

If you have any questions or concerns about auto loan fraud or fraudulent auto dealer practices, please contact the Law Offices of Howard D. Silver. Call 866-49-LEMON for a free consultation with a skilled California used car fraud attorney.

May 1, 2009

CA Vehicle License Fees Set to Nearly Double by May 2009

According to the California Department of Motor Vehicles, the Vehicle License Fee (VLF) that the state charges car owners is slated to nearly double on May 19, 2009. The VLF is a value-based tax charged to vehicle owners when they renew their vehicle registration with the DMV each year.

Currently the VLF is set at 0.65 percent of the purchase price of the vehicle (65 cents per 100 dollars of the sale price). New legislation pushed through to combat California’s budget deficit will increase this fee to 1.15 percent, or $1.15 per 100 dollars of the purchase price of the vehicle. The increase is earmarked for the state’s general fund with a portion going towards the Transportation Tax Fund.

The fee increase will target certain smaller vehicle classes—namely automobiles, motorcycles, trailer coaches and commercial vehicles with a gross weight under 10,000 pounds. Commercial vehicles weighing more than 10,000 pounds and vehicles currently exempt from paying VLF will be exempt from the increase.

Please keep in mind that the fee is based on the due date of your vehicle’s California registration fees. Paying your fees early will not exempt you from the increase. On the bright side, paying your fees late will not make you liable for the increased amount, provided your registration fee due date is before May 19, 2009.

The increased VLF fees are scheduled to remain in place until June 2011.

If you have any questions or concerns about California vehicle laws, please contact the Law Offices of Howard D. Silver. Call 866-49-LEMON for a free consultation with a skilled California lemon law attorney.

April 24, 2009

Purchasing a Car in California from a Private Party?

The California Department of Motor Vehicles has developed in a report a series of steps you need to follow when you purchase a used car from a private party. Normally, these tasks would be taken care of by the car dealership, but in a private transaction you have to look after these details yourself in regards to California lemon law and certified pre-owned vehicles.

10 Days to Transfer Ownership

Within 10 days of the final sale, you have to file an array of paperwork with the DMV. One of the most important pieces of documentation you need is the title, also known as the pink slip. You and the car’s former owner have to sign the pink slip and have it notarized. If the car was financed, the owner of the loan must sign as well.

Once the signatures have been notarized, you need to pay a transfer fee (currently $15) and use tax (varies by county). You have 30 days to pay these fees to the DMV.

Depending on the age of the car, you may need to pay a smog transfer fee. Cars that are four or fewer years old are subject to a smog transfer fee (currently $8). If the car is older than four years, the seller must prove that the vehicle has passed the current smog certification period. Certain exceptions to this rule apply.

If the car is less than ten years old, you will also need to record the mileage on the odometer. Your title paperwork should have a place to record this information. If not, a special form must be used called the Vehicle/Vessel Transfer and Reassignment Form (REG 262). This form is obtained from the DMV and then signed by both you and the original owner of the vehicle.

Vehicles given as gifts, or transferred within families are subject to slightly different rules. Please contact the Law Offices of Howard D. Silver at 866-49-LEMON if you have questions about the legal issues involved in selling or buying used cars in California.

April 15, 2009

Buying a Vehicle Out of State? What California Car Buyers Need to Know

For the most part, buying a car from out of state is much like the process of buying a new car or buying a used car in California, but with one big exception—the California vehicle emissions standards (the smog laws). California has tougher emissions standards than other states. Here’s what the California smog laws mean to you when you buy a new car out of state:

According to a guide report from the Department of Motor Vehicles, any new car, truck or motorcycle purchased from out of state must comply with California’s emissions standards. If the vehicle does not meet California’s admission standards, you may not be able to register the vehicle in this state.

What’s New?
In the state of California, 7,500 miles or less on the odometer counts as new. If your new car, truck or motorcycle shows this amount or lower on the odometer when you acquire the vehicle, your vehicle must meet California emissions standards.

How Do I Know if a Vehicle Meets CA Emission Standards?
Look under the hood of a car or truck. You should find an emissions sticker that will tell you whether the vehicle is built for use in California. On a motorcycle, the emissions notice may be on the vehicle frame or on the steering head (the place where the front fork attaches to the frame).

The Vehicle Doesn’t Meet CA Requirements. Now What?
You can replace the entire emissions system in the vehicle with a system that does comply with CA standards or you can look at another vehicle.

Continue reading "Buying a Vehicle Out of State? What California Car Buyers Need to Know" »

April 8, 2009

California Guidelines on What You Need to Know When Buying a Car

First time buying a used car? The California Department of Motor Vehicles has created a very nice guide in a report that lists what you need to know before you sign a contract with a car dealer. Here is a summary of the important points:

Research the Value
In an effort to avoid being a victim of used car fraud in California, research the market value of the vehicle before you commit to buying a used car. The Kelley Blue Book is one of the most valuable resources for a used car buyer. Double-check the sticker price against the Blue Book and compare prices from several dealers.

Comparison Shop for Interest Rates
If a car dealer is offering financing, compare interest rates with other lenders. A couple of point difference in the interest rate can save you a bundle over the life of the car loan.

No Cooling Off Period…Unless You Purchase One
Used cars sold by a dealer for less than $40,000 must come with the option to purchase a two day cooling off period (a Contract Cancellation Option Agreement). This option only applies to sales of used cars for less than $40,000. Buying a new car? Doesn’t apply. Buying from a private party? Doesn’t apply. Buying a motorcycle? Doesn’t apply.

Continue reading "California Guidelines on What You Need to Know When Buying a Car" »

February 18, 2009

The New Danger Zone: Used Car Dealerships

As a story in 5TJT reports, used car dealerships are becoming dangerous places to do business. According to the story, 11 people were arrested in Nassau County, NY, after a year-and-a-half long investigation by the property crimes and homicide units of the local Police Department and the Department of Motor Vehicles.

Investigators found fraud, corruption and theft rampant at the used car dealership under investigation after the January 2007 shooting of a car salesman in front of the dealership’s offices. When authorities looked more closely at the dealership, they found serious crimes being committed. These illegal acts included identify theft to provide certain buyers with the opportunity to own cars without revealing their own identities.

Continue reading "The New Danger Zone: Used Car Dealerships" »

February 11, 2009

GM Recalls Malibu Hybrids

On December 17, 2008, Big Three auto manufacturer, General Motors, began the recall of a small number (77) of 2009 Chevy Malibu Hybrids

The recall is based on cars failing to comply with a federal vehicle safety standard for windshield defogging and defrosting. In the affected vehicles, the heating and air conditioning system that keeps the windshield clear may fail to operate. If this happens while the car is on the road, the driver may not be able to see clearly and could crash as a result.

The recall will send the affected Malibu cars to a Chevy dealer, where the computer module that controls the heating and air conditioning system will be reprogrammed.

GM’s recall illustrates the care that auto manufacturers must take to ensure that a vehicle meets safety standards. Lemon laws in California help protect consumers who have unknowingly purchased cars that fail to meet standards of performance or safety.

Continue reading "GM Recalls Malibu Hybrids" »

February 4, 2009

California Leads In Air Quality Standards, Auto Buyer Protection

California has taken an aggressive lead towards making sure that cars driven in this state are safer, more fuel efficient and more environmentally friendly than vehicles elsewhere in the country.

A recent news story featured in Reuters highlights the lead taken by California in auto emissions standards. Governor Schwarzenegger praised President Obama for recommending that EPA leaders should re-evaluate their refusal to let California regulate air standards.

California has some of the most stringent auto emissions standards in the country as a result of public outcry over deteriorating air quality in Los Angeles, San Francisco and other major cities. The story mentions that other states are ready to follow California’s lead on vehicle emissions.

Continue reading "California Leads In Air Quality Standards, Auto Buyer Protection" »

January 28, 2009

7,200 Mazda Cars Recalled: Fuel Leaks, Fire Hazard

The National Highway Traffic Safety Administration (NHTSA) issued a recall for 2007 Mazda automobiles with California emissions systems.

According to the NHTSA recall notice, the protective PVC coating found on the outside of the fuel tank of the 2007 Mazda may have been damaged during the assembly process. The PVC coating acts as a barrier against coercion. If the PVC coating is breached, it may allow rust to weaken the tank causing fuel leaks and increasing the risk of fire.

As part of the recall, Mazda dealers will inspect the protective coating on the bottom of the fuel tank for damage. If damage is discovered, the fuel tank coating will be repaired; or if necessary, the fuel tank itself will be replaced.

Continue reading "7,200 Mazda Cars Recalled: Fuel Leaks, Fire Hazard" »

January 21, 2009

Fewer Vehicles Recalled by Manufacturers in 2008

Although the total number of vehicles recalled by the auto industry in 2008 declined, the total number of recall campaigns increased, reports David Shepardson at detnews.com.

Automobile manufacturers recalled 10.2 million vehicles during 2008—a decrease of almost 30 percent. Yet the total number of recall campaigns increased by over 9 percent, from 588 to 642.

This seemingly contrary situation has been created by a number of factors. According to the National Highway Traffic Safety Administration (NHTSA), improvements to the system which monitors vehicle defects deserve a portion of the credit. By gathering a more complete picture about the reliability and safety of cars, the NHTSA is better able to recommend corrective actions to manufacturers and dictate corrective action as necessary.

Continue reading "Fewer Vehicles Recalled by Manufacturers in 2008" »

January 7, 2009

Forced Warranty Scam

One scam that is commonly encountered in both new and used car sales is the forced warranty. Basically, the dealer tells the buyer that financing for the car will not be approved unless the buyer purchases an extended warranty. Usually this is passed of as protection for the buyer should anything go wrong with the car. What the dealer isn't telling you is how much profit he or she is making on the deceptive business practice deal.

Extended warranties are huge money makers for car dealers. In an interview with the New York
Times
, Consumer Reports automotive editor Rik Paul revealed that extended warranties for new
cars are "major profit centers" for auto dealers. Even worse, when buyers fall for this unfair
business practice
, the warranty charges are often rolled into the financing arrangements. This makes it difficult to tell exactly how much the warranty really costs, and the extra cost hits their wallets again and again throughout the lifetime of the loan.

Continue reading "Forced Warranty Scam" »

January 2, 2009

Remedies Available From the California Lemon Law

California's lemon law is officially known as the Song-Beverly Consumer Warranty Act. This section of the civil code provides protection for buyers of new cars, used cars that are still covered by the manufacturer's warranty, motor homes and other vehicles.

Song-Beverly requires manufacturers to meet the conditions spelled out in a written warranty. Manufacturers (or their dealers) must attempt to repair the defects in a vehicle that is covered by the warranty. If they are unable to do so after a reasonable number of attempts, the manufacturer must either replace the vehicle or refund the purchase price to the buyer.

According to the lemon law, manufacturers have the right to charge the buyer for the millage that they have put on the vehicle. This is known as the usage fee and is based on the number of miles on the vehicle the first time it is brought to the authorized dealer to repair the defect.

Continue reading "Remedies Available From the California Lemon Law" »

October 15, 2008

Executives at Chrysler are Personally Making Customer Satisfaction Calls

Responding to a growing wave of consumer discontent with automated call centers and unresponsive dealership bureaucracy, executives at the Chrysler Motor Company will now be directly following up with customers. Doug Betts, the top corporate officer in charge of customer satisfaction, has pushed hard for this unique and strategic way to improve the brand's image. Dissatisfied customers currently express their discontent through the internet, and they use web forums or auto product liability lawsuits to amplify their message. The theory behind this customer satisfaction program is to salve consumer anger by getting out in front of problems before they “go viral” and do damage to the brand.

In the pilot weeks of the program, executives contacted more than 2,100 Chrysler, Dodge, and Jeep owners. Even Bob Nardelli, Chrysler's Chairman, got in on the action.

Will the 300-plus Chrysler execs moonlighting as customer service representatives improve the image of a company that's had its brand tarnished not only by internal political problems but also by macro-trends against American carmakers? It remains to be seen, but independent analysts have generally applauded the plan as a step in the right direction towards reforming a corporate culture that has often been dismissive of the “little guy.”

If you have had a mechanical, service, or financial problem with your Dodge, Jeep, or Chrysler purchase, you may have legal options to fight back. Whether you purchased a lemon from a used car dealership, got injured due to car repair fraud, or lost money because a dealer failed to disclose issues or reset the odometer to read at a lower mileage, contact the law offices of Howard D. Silver today to get the help you need. Visit www.california-lemon-law-blog.com, or call the law offices of Howard Silver today at 1-866-495-3666 to explore your legal possibilities.