Lemon Law Blog

President Obama introduced a “Cash for Clunkers” program last week. 

The $1 billion program will provide drivers with up to $4,500 in trade in value if they turn their poor-mileage clunker in for a more fuel-efficient vehicle. The government is hoping that the new program will take off the way it has in Germany, and will result in more than a quarter of a million new car sales throughout the Country while simultaneously getting gas guzzlers off the road.

According to an article in the Newark Sar-Ledger, this new law could increase Garden State car sales by roughly 24,000 sales and provide $50 million in additional tax and motor vehicle fee revenue for New Jersey. It is widely understood that other states will enjoy the same success.  That being said, the program is not as cut and dry as it may suggest.

For instance, the car that is going to be traded in must have been registered in the owner’s name and insured for at least one year. Eligible clunker cars must also be drivable and have an overall fuel economy rating of 18 or less miles per gallon.  Furthermore, in order to qualify for the top dollar amount, $4,500, the new vehicle has to get 10 miles per gallon more than the car being traded in, which is a pretty lofty feat. If you are looking at a van, SUV or pickup, it has to get 5 additional miles per gallon to receive the top rebate.  The new vehicle being purchased cannot cost more than $45,000.

If you cannot find a vehicle that gets 10 miles more per gallon, you can get a $3,500 rebate if you find a car that gets 4 additional miles per gallon. For vans, SUVs and pickups, an extra 2 miles per gallon will fetch a $3,500 voucher.

The program applies only to new cars purchased or leased between July 1and November 1.  Dealers have to register for the program in order to participate.

The other benefit to this program is while many of the clunkers traded in would not qualify for lemon law or breach of warranty protection due to their age and mileage, the new cars will qualify, giving consumers an extra piece of mind.

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As you can imagine, distressed drivers submit hundreds of questions each week to Lemon Law.com, hoping to find out more information about lemon law, breach of warranty and dealer fraud claims. And without fail, at least ten times a day, we receive this one-line inquiry:  “Are used cars covered under the Lemon Law?”

If we had a nickel for every time we received this question, we would be billionaires many times over.  In the nutshell, the answer is no.  The Lemon Laws we work with apply to new or demo cars purchased or leased by authorized manufacturers dealerships.  Now, does that mean that if you purchase a used car, you are up the creek?  Not necessarily.  If you purchased a used car with an original or extended manufacturers warranty, and you find yourself having to go back to the dealer three or more times for the same repair, you very well may have rights under the Federal Law we are always talking about, known as the Magnuson Moss Warranty Act.  Under this Law, you would be entitled to significant monetary compensation from the manufacturer to reflect the diminished value of your car as a result of the problems you have incurred.  In other words, part of what you pay for is a manufacturers warranty and that is the ensure that problems are fixed efficiently and effectively.  If they are not being fixed, there is a breach of warranty and you are entitled to money back.

In many of these cases, you could be looking at 15-35% of what you paid back in your pocket.  This money is non-taxable, you get to keep your car, and your warranty remains completely in effect.  In fact, if the car is fixed after 3-4 attempts, you still are entitled to remedy under this law. You do not need to disclose that you received this money at the time of trade or sale and your car is NOT branded a lemon on carfax.  This is essentially free money in your pocket to pay you back for the defect you have dealt with.

And the best part of all is like the Lemon Law, the Magnuson Moss Warranty Act has a fee-shifting provision which means that if you prevail the manufacturer must pay all attorney fees and legal costs on top of what you receive.  Thus, there is no cost and no risk to filing a claim.

If you feel you may have a potential breach of warranty claim, feel free to contact us at 1-800 LEMON LAW or drop us a line.  Be as specific as possible regarding your problem so we can provide you with a solution to best fit your needs.

Also, it is important to note that certain states we work with, including New Jersey and Massachusetts, do provide used car lemon law protection.  The used car lemon laws are a bit different than new car claims, and in most circumstances can be handled through your State’s Attorney General.  If we feel you qualify for this type of protection, we will be glad to direct you.

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When college student and Kimmel & Silverman client Ryan Robinson purchased the car of his dreams, a 2007 Ford Mustang with 13,000 miles, he had no idea he was stepping into a puddle of problems. However, even though the carfax was clean, Robinson found his car turned out to have previously been flooded.  He has filed suit against the dealer for misrepresentation and remarkably enough, we signed another client today who purchased a flooded BMW from the same dealer.

CBS 3Consumer Reporter Jim Donovan has Robinson’s story, and also some important tips from ASE Certified Mechanic Steve Ruch on how to spot a flood car.  You can read the story and view the video by clicking here.

Also remember, when purchasing a used car, there are a lot of questions you need to ask to make sure your dream car was not previously someone else’s nightmare.  Check out our Lemon Dodger worksheet, and make sure you read some of our past blog entries on used car buying.  Even though you are purchasing a used vehcile, you still are making a significant financial commitment and if you don’t watch yourself, you could find yourself paying out of pocket for costly repairs and part replacement.  We have seen many instances where it cost a consumer more to purchase a used car than it would have to purchase a new one.

Lastly, if you feel your car was misrepresented at the time of sale, inquire about your rights with us or another consumer attorney.  It never costs anything to ask a question and the advice provided could prove to be invaluable.

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Yes, I know we are in the middle of a hot, humid Summer….no better time to surprise you with a pop quiz on your knowledge relating to the lemon law and car buying.  No matter what time of year, it’s important to be prepared when either buying a new or used car, or filing a lemon law claim.  So, grab that #2 pencil and let’s see how much you know….

1) TRUE OR FALSE: If I buy a car and something goes wrong with it, I have three days to return the car.  It’s the law. 

2) TRUE OR FALSE: Once I have driven the car off the lot and signed a sales agreement, there is no way a dealer can change the price on me.

3) TRUE OR FALSE:  If I purchase a car and later figure out that I can’t afford to make the payments, I can return the car and it won’t affect my credit as long as I can prove financial hardship.

4) TRUE OR FALSE: I can ask the dealer to show me what he paid for the car he is selling.

5) TRUE OR FALSE: If I buy a used car and the car has been in an accident, the dealer must tell me that prior to sale.

6) TRUE OR FALSE: The Lemon Law not only applies to major problems, such as the transmission and engine, but also to electrical problems, water leaks, rattles and paint.

7) TRUE OR FALSE: If a new car is in the shop for 30 days in the first year, regardless of whether it’s for the same or different problems, the driver can file a lemon law claim.

8 ) TRUE OR FALSE: If I have a manufacturers warranty and something goes wrong with my car, I have to take it to the dealer when I purchased the car, even if it is far from my home.

9) TRUE OR FALSE: Used cars are covered under the State Lemon Laws.

10) TRUE OR FALSE:  A consumer under the age of 25 may be denied a loaner while their car is in service because of their age.

Click here to see how well you did!

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Over the years, we have frequently received calls and e-mails from folks who have purchased vehicles on e-bay.  Unforutnately, most times, we had to refer these consumers elsewhere, because it was very rare for a car sold on e-bay to still have a manufacturers warranty.  Well guess what? That’s about to change.

With car sales declining by the day, the manufacturers are looking for new outlets to sell their cars and that includes e-bay.  Reuters is reporting that Daimler Chrysler will market over 15,000 certified pre-owned Chrysler, Jeep and Dodge vehicle on the popular website. Chrysler’s certified pre-owned vehicles cover models from 2003-2008 with less than 65,000 miles and reconditioned to meet the automaker’s standards. They carry an eight-year, or 80,000 mile powertrain warranty, backed by the manufacturer, roadside assistance and rental car allowances.

Just a reminder, of course, that even with certified pre-owned cars, it is important to ask the right questions BEFORE you buy.  Check out the Lemon Dodger for specific questions you need to ask before signing on the dotted line.

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While Pennsylvania has always had a lemon law for new cars, Philadelphia has now instituted a lemon law for used cars sold in the city. Mayor Nutter has signed Philadelphia’s first Used Car Lemon Law Bill, sponsored by Councilman Darrell L. Clarke.  The Used Car Lemon Law ensures that purchasers of used cars in Philadelphia have the opportunity to have the car inspected by a licensed mechanic with 72 hours of purchase.  If a major structural defect is found, the consumer has the right to have to return the car for repair or a full refund.

Here are the details:

**A purchaser of a used car may return their vehicle within 72 hours after purchase if it is unable to pass safety or emissions inspections or found by a certified inspection mechanic to have an undisclosed major structural defect (The mechanic MUST put his findings in writing.)

**Upon return of the car, the dealer has 10 days to either fix the car, entirely at their own expense, or refund the consumer’s money.

**Dealer must also provide a copy of any written warranty to the purchaser within 15 days of payment for the warranty, and shall perform all repairs covered under the warranty promptly. At the time of purchase, the delaer MUST disclose in lareg capital letters whether the warranty is provided by the dealer, the manufacturer or a third-party warranty.

**If you purchased a used car and feel the dealer is not upholding their responsibilities, contact the Philadelphia Office of Consumer Affairs at 215-686-7598. They will take complaints and determine their merit.  Repeat offenders face possible suspension or revocation of their Automotbile Sales License and/or Business Privilege License.

Kudos to Mayor Nutter, Councilman Clark and Lance Haver at the Consumer Affairs Office for making this happen.

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