Lemon Law Blog

By Jacqueline Mitchell, Forbes.com

Think about a used car and you might think junky, dirty and old. But another market is catching the attention of savvy buyers who want updated rides without paying new-car prices.

These certified used or certified “pre-owned” (CPO) vehicles have been inspected and refurbished by the manufacturer and are backed by extended warranties. The certified used car market isn’t one that automakers can afford to ignore. According to a recent J.D. Power and Associates study, sales of certified used cars have increased 46% since 2000. Auto experts estimate that 1.6 million certified used cars are sold annually, a number equivalent to 10% of new vehicle sales. This rapid growth started when the segment emerged in the 1990s. Luxury automakers like Mercedes-Benz, BMW and Lexus, looking for ways to unload vehicles coming off lease programs, introduced the certified pre-owned programs as a way to attract the discerning buyer who wanted a luxury car but didn’t want to shell out the big bucks. Other luxury and non-luxury automakers who found themselves in similar situations began offering their versions of these programs. Smart car buyers like them, too. Now, with this best-and-worst list of certified used cars from Forbes.com, smart buyers can be even smarter about this growing market segment.

Kelley Blue Book experts say new vehicle prices average $35,000 and depreciate at a rate of about 20% a year. With this in mind, the cost involved with the inspection, refurbishment and warranty of a certified pre-owned vehicle may add up to a better purchase package than buying a brand new car. “CPO cars are selected from the best of the best,” says Micah Muzio, video road-test editor of Kelley Blue Book. “Automakers can sell them for a premium, usually about $3,000 more than a used (non-certified) car. But the customer gets peace of mind, because the vehicle has been inspected and it’s backed by an extended warranty.”

But don’t rush out and purchase or lease just any vehicle wearing a CPO badge. The programs vary by automaker — and the quality of the vehicles is just as diverse. We looked at a combination of measures to find the best and worst certified used cars on the market, including Consumer Reports’ used-car verdict scores, the Insurance Institute for Highway Safety for crash test ratings and manufacturer-backed warranty programs.Topping our list of the Best CPO vehicles are the Honda Accord, Toyota 4Runner, Acura TL, Subaru Impreza and Lexus GS.

Making our list of the Worst CPO vehicles are the Saturn Relay, Jeep Grand Cherokee, Pontiac G6, Volkswagen New Beetle and Mercedes-Benz E Class.Vehicles that weren’t at the top of class as new car purchases won’t emerge at the top as stellar CPOs, Muzio says. The Relay, New Beetle and E Class, for example, are aging, older models; the Pontiac G6, while fairly new, isn’t a big seller in the segment for family cars. And the Jeep Grand Cherokee has struggled in the highly competitive SUV market.

To get a comprehensive list, we did not use multiple vehicles from one brand, but took the best of the bunch. So if one company had two vehicles that could make the list, we chose the top-ranked car from that brand, based on our measures, to include on the list. We did not include vehicles that had been significantly redesigned for 2008, and we excluded vehicles that did not have complete reporting data for safety or Consumer Reports’ used-car verdicts.

Those used-car verdicts are based on reliability history in 17 areas, ranging from the engine, transmission, and brakes to power equipment and the electrical system. Consumer Reports provides the data, where available, dating back to 1998. We used data for a three-year period spanning 2005 through 2007, as data for a five-year period was not always complete. The highest possible score a vehicle could earn over that time period is 15, or five points for each of the three years. We considered only vehicles with a total of 13 points or greater for the “best” list; a cutoff of seven points or less was used to determine the “worst.”

The only vehicle making our list with a score of 15 is the Honda Accord. The vehicles with the lowest score are the Saturn Relay and Jeep Grand Cherokee, both tying with a score of three.Keep in mind a score of 15 doesn’t mean that the vehicle is problem-free; it just means that it has relatively fewer problems compared with other models. And a score of three doesn’t mean a vehicle is unreliable; it merely has a higher rate of problems than the average model.

Safety was another key factor. Using information from the Insurance Institute for Highway Safety, we were able to find historical crash test ratings. All the vehicles that made the “best” list have safety ratings of “good” for both frontal-offset and side-impact crash tests for the three model years considered.

The vehicles on the “worst” list all earned “good” ratings in frontal-offset testing, but earned scores of less than “good” for side impacts. The lowest score was “poor” — for the Volkswagen New Beetle. The Saturn Relay, depending on the year, had scores of “average,” “marginal” or “poor.”

We looked at the extended standard warranty and the number of points inspected, which range from 75 to 165. For the best, we used a cutoff of 150 points or higher; for the worst, 130 points and below. The length of time of an extended standard warranty and additional benefits were taken into consideration, but were not as heavily weighted as the number of inspection points, crash-test ratings and reliability history. All extended standard warranties kick in when the original manufacturer warranties expire; if the original has already expired, the new warranty goes into effect at the time the CPO vehicle is purchased. This information is available at the manufacturers’ websites and the Kelley Blue Book site.

The CPO Acura TL includes 24-hour roadside assistance, 24-hour emergency towing services, emergency fuel delivery and emergency lock-out service as part of its 12-month/12,000-mile extended warranty.

The CPO Lexus GS comes with a loaner car, 24-hour roadside assistance and trip interruption service (If your vehicle breaks down while you are away from home, this will cover reimbursement for meals, lodging and rental for a certain period of time, while your car is under repair) under its three-year/100,000-mile standard warranty. Some vehicles making our “worst” list also offered some added benefits under standard warranty plans. The CPO Pontiac G6 standard warranty includes 24-hour roadside assistance, a three-day, 150-mile satisfaction guarantee and a vehicle history report that details any past accidents, damage or “lemon” history.

With the information you need guiding you to the right CPO vehicle, you just might be able to slide behind the wheel of your dream car sooner than you think.

Popularity: 24% [?]

From Associated Press
Ford Recalling 3.6 Million Vehicles
By Ken Thomas, Associated Press Writer
 
Ford Recalling 3.6 Million Vehicles to Deal With Concerns About Faulty Cruise Control Switch

WASHINGTON (AP) — Ford Motor Co. said Friday it is recalling 3.6 million passenger cars, trucks, sport utility vehicles and vans to address concerns about a cruise control switch that has led to previous recalls based on reports of fires.

Ford said the recall covered more than a dozen vehicle models built from 1992-2007. The company said it was responding to concerns from owners about the safety of their cars and questions about the speed control deactivation switch in the vehicles that is powered at all times.

The Dearborn, Mich.-based automaker previously had recalled nearly 6 million vehicles beginning in January 2005 because of engine fires linked to the cruise control systems in trucks, SUVs and vans.

“Customers remain concerned about the long-term durability of the speed control system and about the safety of their vehicles,” said Ford spokesman Dan Jarvis.

He said the automaker had received “a few reports of fires” in Ford Crown Victoria passenger cars prior to the recall. He did not have a precise number.

The recall involves the following vehicles: 1998-2002 Ford Ranger, 1992-1997 Lincoln Town Car, 1992-1997 Ford Crown Victoria, 1992-1997 Mercury Grand Marquis, 1993-1998 Lincoln Mark VIII, 1993-1995 Taurus SHO, 1999-2001 Ford Explorer and Mercury Mountaineer.

Also covered are the 2001-2002 Ford Explorer Sport, 2001-2002 Ford Explorer Sport Trac, 1992-1993 E150-350 vans, 1997-2002 E150-350 vans, 1993 Ford F-Series pickups, 1993 Ford Bronco, 1994 Mercury Capri, 2003-2004 Ford F-150 Lightning, and 1995-2002 Ford F53 motor homes.

An additional 177,000 vehicles in Canada, Mexico and Europe are covered by the recall.

Jarvis said there have been no deaths, injuries or accidents associated with the recall.

It was Ford’s sixth recall, involving a total of more than 10.4 million vehicles, conducted since 1999 because of problems with the speed control system, according to the National Highway Traffic Safety Administration.

The nation’s largest single recall involved 7.9 million Ford vehicles in 1996 to replace an ignition switch.

Texas Instruments Inc. supplied the speed control switch in all of the vehicles covered under Friday’s announcement, Ford said. A TI spokeswoman could not immediately comment.

Owners will begin receiving recall notices on Aug. 13. Jarvis said the parts for passenger cars would not be available until early October. In the meantime, owners can take their vehicle to a dealer to have their cruise control deactivated until the parts arrive. The parts are available for trucks, Jarvis said.

Dealers will install a fused wiring harness into the speed control electrical system or replace the deactivation switch if its found to be leaking.

Owners with questions about the recall can contact Ford at (888) 222-2751.

Ford Motor Co.: http://www.ford.com/

Popularity: 60% [?]

A large and growing number of corporations now require consumers and employees to sign contracts that include mandatory arbitration clauses. Unfortunately, in most circumstances, most individuals have no option but to move forward and accept the clause, or to forgo securing employment or needed goods or services. The Arbitration Fairness Act would ban pre-dispute Mandatory Binding Arbitration clauses in consumer and employment contracts that are buried beneath the fine print.

For more information, visit the National Association of Consumer Advocates website at www.naca.net.

Popularity: 18% [?]

From Dealerscope.Com

Legislators in New Jersey have proposed a measure that would extend traditional “lemon law” protections to customers purchasing consumer electronics. A-3978, also known as the Consumer Electronics Warranty Lemon Law, unanimously passed an Assembly committee last week. The idea behind the legislation, its sponsors said in a statement to PoliticsNJ.com, is that because some consumers spend thousands of dollars per year on electronics, they deserve the same sort of protections that car owners do.

To avoid prosecution under the proposed law, sellers would have to meet several criteria: Replace items that could not be repaired after three attempts; refund defective items; provide at-home service, if promised, within 72 hours, and comply with several other provisions. Failure to comply would result in a $10,000 fine for first offenders, under the state’s Consumer Fraud Act. If passed, New Jersey’s bill would be the first law of its kind in the nation, although going after electronics salespeople for Lemon Law violations is not entirely unheard of; Kimmel & Silverman, one of the East Coast’s top Lemon Law firms, lists electronics along with cars, trucks, motor homes and boats as “lemon” items for which it goes after fraudulent sellers. Traditionally, such claims have been brought under the Magnuson-Moss Warranty Act, a federal law passed in 1975 that governs all consumer warrantees.

The proposed New Jersey law “would narrow and articulate what specific rights are, so [consumers] don’t have to see a lawyer and look it up,” said Craig Kimmel, co-founder and managing partner of Kimmel & Silverman. Kimmel said the proposed law would “give teeth” to existing legislation, but said it is too early in the process to tell how much effect the law would have.“I don’t know if it would need changes to make it practical, and palatable for everyone involved,” Kimmel said. The New Jersey bill passed the state’s Assembly Consumer Affairs Committee on May 10 and is now on the desk of Assembly Speaker Joseph J. Roberts, who will decide whether to bring it for a full assembly vote. If the measure passes both the assembly and state senate, it will reach the desk of Gov. Jon Corzine.

Popularity: 20% [?]

General Motors is backing up talk of better product quality with new warranties. Starting with all 2007 models, GM will offer a 100,000-mile/five-year powertrain warranty on its lineup. In addition, consumers will also get expanded roadside assistance and courtesy transportation, GM CEO Rick Wagoner said at a press conference.

For non-powertrain components, GM’s standard warranties remain in effect: four years or 50,000 miles for Buicks, Cadillacs, HUMMERs and Saabs, and three years or 36,000 miles for Chevrolets, GMCs,Pontiacs and Saturns, GM officials said.

Wagoner credited the expanded warranty coverage to the company’s ongoing improvements in quality. GM’s warranty costs have dropped by roughly 40 percent in the past five years thanks to a concerted effort to ensure the company’s vehicles are reliable, he said.

Wagoner also said the warranty improvement will mean that GM warranties are now better than those offered by key competitors such Ford, Toyota, Honda and Nissan. Ford increased its basic warranty to five years and 60,000 miles earlier this summer.

Popularity: 22% [?]

Fall is an ideal time to consider buying a new car. Between the 2006 leftovers and the shiny new 2007 models, the selection is at its finest. But before you take that leap, remember five easy steps to prevent being taken for a ride:

1) KNOW YOUR NEEDS–Sure a fire-engine red convertible may be the ideal cure for a mid-life crisis, but not for the doting dad of three. Before you head out to the dealership for a test drive, figure out exactly what you need from your new car and create a list of the features that are most important to you. Are you frequently on the road for business? Perhaps, you need more trunk space. Will you go crazy without a sunroof? How much leg room do you need? Are you looking for a coupe? a sedan? a stationwagon? a minivan? Do you take long road trips? You may want to check out the cars which receive the best mileage per gallon. If you live in an area known for its white winters, check out the vehicles with four-wheel drive. Once you can narrow your sights on the vehicles which best fit your lifestyle, you can zoom ahead to the next important step…..

2) RESEARCH, RESEARCH, RESEARCH! It’s so important we have to say it three times. An educated consumer is an effective consumer. The internet offers some wonderful websites such as Edmunds and Vehix, where you can compare vehicles side by side. Our award-winning lemon law website (self promotion alert!) offers some very useful data from the Center for Auto Safety: The 2006 Car Complaint Index, which lists the cars that receive the most complaints per sales, and this year’s Best Buys, which take into account everything from mileage to warranty to customer satisfaction. Plus, make sure you find out the MSRP (manufacturers suggested retail price)–in most situations, you should always pay below the MSRP. Soak up as much information as you can before setting your sites on that shiny new car. The knowledge you possess may be worth its weight in gold.

3) TRY IT BEFORE YOU BUY IT! As you enter the sun-soaked lot of shiny new vehicles, you see it–your dream car…there in the distance…you must have it…you talk with the dealer, you look over the car, you agree on the price…everything is moving along so smoothly…you are about the sign the paperwork and drive your dream car off into the sunset…STOP!!! Before you sign on any dotted line, it is important to try out the car. Put the pedal to the metal and take that baby out on a decent test drive. Try to sample the car both in city and highway settings and also make sure you examine every feature. Turn the AC to full-blast and open the sunroof–even if you are in the middle of March. Turn on the radio, press the horn, lock the doors, move the seats back–make sure everything is working perfectly and do not purchase the car if you find something wrong. This is your one chance to demand perfection. Do not settle for any IOUs.

4) UNDERSTAND YOUR WARRANTY. Every new car comes with a manufacturers warranty. Before you purchase your car, make sure you understand the terms of your warranty–how long does it last? what is covered? Most manufacturers also offer an extended warranty on the powertrain components. Some even offer free maintenance, including oil changes and service. Know what is offered and take advantage of it. If your car is giving you problems and you are under a warranty, you will void that warranty if you go to the neighborhood mechanic or if you don’t change your oil. Plus, keep all of your records, because you will never know when you need to…..

5) FIGHT FOR YOUR RIGHTS! Here’s the bottom line–When you purchase a new car, it comes with a manufacturers warranty which is supposed to insure that problems are fixed efficiently and effectively. But what happens when they are not? That’s why every state has a Lemon Law and in most states, these laws have fee-shifting provisions, providing consumers with completely free legal representation. If you are having a problem, do yourself a favor and look into hiring a consumer attorney. Just make sure that they do not charge a retainer or take a percentage of your winnings. Why would you represent yourself when you can someone experienced working with you to help you achieve your desired result? Lemon Law America provides a wonderful on-line resource to learn about your State’s Lemon Law and to connect with a consumer attorney in your state. If you do find yourself in a jam, this website will help you get back on the road to recovery. LemonLaw.Com also offers a list of lemon law attorneys throughout the Nation.

Well, there you have it….five easy steps to help you when you are looking for a new ride. Here’s wishing you safe driving in your new car!

Popularity: 25% [?]