Lemon Law Blog

According to the Associated Press, December auto sales figures were quite surprising. Despite the financial trials and tribulations being experienced by the big three, it appears that two of the most dependable manufacturers, Toyota and Honda, ended up at the bottom of the heap.  Despite showcasing affordable, fuel-effective models, Toyota sales dropped 37 percent last month, and Honda was right behind with a 35 percent drop.

This is more than a matter of getting financing for interested consumers, says analysts, but rather it is a matter of finding interested consumers in the first place. They expect to see auto sales industrywide drop up to 40 percent.  According to Edmunds, It appears that auto sales figures are at their lowest level since 1992 as the Nation remains uncertain about the economy and employment. 

There is only one company who is announcing sales increases in 2008 in the United States.  Subaru of America said its US sales of the Impreza and Forrester models rose 0.3 percent this year, selling roughly 500 more cars this year than last. Not much to crow about, but it’s better than the alternative.

So, are there any winners when it comes to this sales disaster?  Absolutely.  As in the case of real estate, it is a buyer’s market, and if you have good credit, you can run the show.  Many manufacturers are continuing to offer vehicles at significant discounts, plus they are coupling these great deals with the always popular zero percent financing and significant incentives and rebates. In addition, there are still many 2008 models around, so you could save even more money by purchasing a leftover.  The rule of thumb as always is to shop around and educate yourself.  Lastly, we urge you to read your sales contract carefully before signing on the dotted line.  Happy shopping!

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Unfortunately, as the economy continues to spiral downward, so does production of several General Motors sport utility vehicles. The manufacturer has announced that come December 23, they will close their plant in Moraine, Ohio and cease production of the Chevrolet Trailblazer, the GMC Envoy, and the Saab 9-7x.  Thankfully, it’s not all coal and humbug this Christmas for the company. The Chevrolet Traverse, Saturn Outlook, GMC Acadia, and Buick Enclave have all remained popular and will continue to be produced.

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Another manufacturer is taking radical steps to get out from under. The New York Times is reporting that Chrsyler Financial will stop offering leases to consumers, effective today.  The reason is that plummeting resale values for SUVs and trucks have made it practically impossible for the manufacturer to turn a profit once the consumer turns the vehicle in from a lease.  Leases will still be offered through independent banks.

James Press, co-president of Chrysler, says that in place of leasing, the company will divert their efforts towards creating new, more attractive financing options for drivers. This makes sense for both the consumers and the company, as low interest rates make financing more appealing and there is a far lesser financial risk for the automaker. The Associated Press is reporting that Chrysler will offer 72-month finance deals starting this month on a large variety of its compact, midsize and full size cars. The new program will allow monthly payments lower than previous finance offers and similar to its 36-month lease program.  Some purchases will also include a cash bonus of up to $2000, plus there will be a loyalty incentive for returning lease customers and the lease disposition fees will be waived. 

Ford and GM still plan on offering leasing, despite both suffering billion-dollar losses for similar reasons.

Quick programming note for those in Philadelphia and the Delaware Valley:  Looking to save a few bucks by buying a used car?  Do your homework first or else your dream car could have been someone else’s nightmare. Watch Lemon Law Attorney Craig Thor Kimmel tonight at 10 on MyPHL News on Channel 17.

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As we have reported repeatedly on this blog, car sales are down big time! As a result, dealers are doing everything they can to make a sale.  Unfortunately, some dealers are more concerned with getting the cars off the lot immediately than they are about securing financing for their customers.  And as new car sales continue to be more competitive, we are receiving a plethora of calls at 1-800 LEMON LAW regarding a dealer tactic known as spot delivery.

Most folks have heard of this tactic before.  An alleged spot delivery transaction between a NJ consumer and the Brad Benson dealership found its way on National TV (and throughout cyberspace).  Spot Delivery occurs when a dealer puts a consumer in a new car “on the spot,” with the consumer signing a number of documents, including a retail sales agreement.  Later on, the customer starts receiving calls tellling them their financing did not go through. In most cases, they are trying to get the customer to come back to pay more money than they originally agreed to.   Some dealers play dirty when this occurs.  They may threaten repossession, or not pay off a trade-in, or make numerous threatening phone calls. And in most cases, customers feel trapped into paying more money.

So, what should you do? You need to stand your ground.  If you signed purchase doucments and registration applications, obtained insurance, and a new license plate installed or an old plate transferred, the car belongs to you.  Here are some other tips to follow if you find yourself in a spot delivery situation:

• Keep all copies of your paperwork and anything else associated with the sale (including calendars, photographs, advertisements). If the finance manager asks for your papers at any time for any reason, refuse! Keep these documents in a safe place, not the car.
• If you are called back to the dealership to sign additional papers, either do not go or do so in a different car than the one you bought.
• Have a friend or spouse drive you and witness whatever is being told to you. This will prevent the dealer from taking your car as hostage, an all too common happening.
• If a dispute arises with the dealer over the contract and the dealer demands the car is returned, park it in a garage or remote location until the matter is resolved, to prevent it from being taken against your wishes.
• Put together a complete time line of everything that happened from the time you thought of purchasing the car until the car was taken away. Try to remember specific names of dealership personnel and any statements that were made to you during conversations with the sales and finance staff.
• Keep track of all monies you had invested into the purchase, including registration, insurance, down payment and trade. Never pay cash and always get a receipt!

If after reading this, you realize that you are a victim of spot delivery, you may want to contact a consumer attorney to take action. At this time, we are handling spot delivery claims in Pennsylvania and New Jersey. If you are in either state, please contact us via e-mail or by calling Michael Sacks, Director of Client Services at 1-800 LEMON LAW (1-800-536-6652) ext. 131.  If you reside in another state, contact your attorney general or check out our attorney directory.

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We are equal opportunity bloggers. It appears that misery loves company and being that we have already reported on General Motor’s spiral downfall, they should be happy that we are now discussing Ford’s foibles. The Los Angeles Times is reporting that despite an unexpected $100-million profit the first quarter, the manufacturer significantly suffered second quarter with a $8.7 billion loss, their largest quarterly loss ever. Much like GM’s situation, the huge loss is being blamed on soaring gas prices and the huge crash in consumer demand for trucks and larger SUVs (although we still get calls about F Trucks every single day).

Ford appears to be following in GM’s footsteps and will be concentrating their efforts on producing smaller, more fuel-efficient cars, according to chief executive Alan Mulally. And there’s good reason for this; truck and SUV sales have declined 18% this year, while Ford Focus sales are up 27%.

In order to achieve their goal, they are shifting production at a variety of their plants. The Detroit Free Press reports that SUV and truck plants in Michigan, Mexico, and Kentucky will all be converted by 2011 to produce smaller cars, including cars derived from the manufacturer’s new C-car platform and a new verion of the Ford Fiesta. There is a bright side; a Twin Cities, Minnesota plant originally scheduled to close in 2009 will stay open through 2011 to produce the compact Ford Ranger pickup.

Time will determine if these plans are in fact “built Ford tough,” or if there are going to be unforseen potholes on their road to financial recovery.

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As you can expect, we have successfully handled thousands upon thousands of GM lemon law cases through the years….Cadillacs, Buicks, Chevrolets, Corvettes, Pontiacs, Hummers, etc.  Founding Partner and Lemon Law Attorney Bob Silverman has taken charge of many of these cases, and he has always felt that, despite the fact the glitches occur, GM has constantly exhibited a strong commitment to quality and customer service.  We have also seen that many of our GM clients have illustrated tremendous brand loyalty, buying a brand new GM vehicle following their lemon law experience.  Thus, it is quite disheartening to hear that this once invinceable auto giant is suffering a tremendous amount of troubles and tribulations.

Bloomberg reports that the company has suffered a 16 percent decline in 2008 U.S. auto sales and the price of GM stocks is now at a 54-year low (Shares have tumbled 62% this year, the most among the 30 companies in the Dow Jones Indsutrial Average). However, despite continuous speculation that GM could file for bankruptcy in the next year, Chief Executive Officer Rick Wagoner says that the company has “no thoughts whatsoever” of bankruptcy.  Wagoner also says that Hummer is the only one of GM’s U.S. brands being studied for possible sale or shutdown. As gas prices continue to soar, the manufacturer will review the truck’s future and sales potential. He adds that the bankruptcy rumors have not resulted in any drop in sales, with GM sales falling less than 1 percent in the first three months of the year.

As a company, GM has not posted an annual increase since 2004, with no U.S. sales gain since 1999. Last year, they suffered an astounding $38.7 billion loss. Outside analysts say that in a worst case secnario, with sales continuing to decline and an inability to acquire much needed captial, GM might have to declare bankruptcy by the end of 2009 or beginning of 2010, but they put the odds of that happening at 25 percent.

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