The last few months have been quite eventful for California Lemon Law advocates and consumers alike. The downward trend in sales, bailouts and bankruptcy proceedings were contributing factors. The June sales figures are in and while the news isn’t good, there are signs that the market is beginning to stabilize. Of the automakers with a major presence in the U.S., Ford showed the best results with sales dropping only 10.7% compared to last June and reporting a gain in market share. Overall, the drop in sales reported by all manufacturers was 27.7% - almost exactly the same as Toyota. General Motors and Honda were worse than average at 33 and 30 percent respectively. The big loser was Chrysler whose sales plummeted a whopping 42 percent.

Most analysts figured that the GM and Chrysler bankruptcies would hurt their sales and it appears that the experts were right. Ford, on the other hand, seems to have won a lot of consumer confidence by refusing government bailouts and remaining self-sufficient.

Chrysler fared much worse than GM, at least on a one-month basis and a good question is why the difference? There is probably not a single answer. One reason might be in how the two manufacturers have dealt with warranty matters (i.e. demands for buybacks under the California lemon law and other state lemon laws) while under bankruptcy court protection. Early in the process, GM got court approval to continue to honor warranty claims as it always had. Chrysler, on the other hand, created a lot of ill will and bad publicity by bouncing settlement checks. It has tried to use the bankruptcy to change the terms of settlements previously agreed to. Did the public conclude that Chrysler was using the bankruptcy to hide from its responsibilities? Hard to tell for sure, but one thing is certain. Your rights to warranty protection are an essential part of car ownership. When these are threatened, you should request legal assistance and consider taking your future business elsewhere.

Congress has just passed a bill that would give consumers cash vouchers between $3,500 and $4,500 in exchange for trading in their existing gas guzzlers for newer, more fuel-efficient vehicles. The bill does not specifically mention your rights under the California lemon law or federal lemon laws, but your protection as a consumer is something you should always consider when buying a new car. You never know if it will turn out to be a fuel efficient lemon car.

The idea behind the gas guzzlers law, which President Obama is expected to sign, is a simple one. Cars with poor gas mileage will be gotten off the road while at the same time stimulating flagging car sales. There is a lot of skepticism as to whether the idea will work and critics in Congress scaled back the duration of the program from a year to four months.

The government has put up a web site where you can learn if you qualify. The Car Allowance Rebate System can be found at www.cars.gov. Should you decide to take advantage of the program you should fully check out the warranty protection of your new car to see if it will meet your needs and to determine what protection you will have if the car is defective.

Remember: just because a car is a fuel-sipper doesn’t mean it can’t be a lemon car. The California lemon law and federal lemon laws don’t take fuel economy into consideration.

California lemon law requires consumers to give the manufacturer a reasonable opportunity to repair the defect(s).The paperwork the dealership gives consumers with each repair is an important legal document for a lemon law case. Consumers should resist the temptation to toss what often seems like a confusing jumble of abbreviations, auto mechanic jargon and undefined computer codes into the recycle bin. If a car turns out to be a lemon, these repair orders will be vital evidence in getting a buyback- a warranty refund.

There are three cardinal rules that every consumer should follow

1. Take your car to the dealership for repairs when it first starts to give trouble or if the defect is still not fixed after repair. Sometimes people with busy lives prefer to limp along with a defective car, figuring that they’ll take it up when they next bring the car in for service. This can be a big mistake. Why? When manufacturers buy a car back, California lemon law allows them to deduct an amount from the refund proportional to the mileage on the car at the time it was first presented for repair of the major defect. In other words, every mile you drive the car after it starts acting up could cost you money. If you make follow-up visits promptly, it will be easier for your attorney to prove that you were diligent in trying to get your problems addressed.

2. Always give the service writer a complete description of your car’s problems to the best of your knowledge and make sure that he writes down exactly what you say. Lemon laws generally require that a manufacturer be given a “reasonable number of opportunities” to repair the defect. Without repair orders that say exactly what the problem is, it is hard to prove that the manufacturer’s authorized dealers were given the required chances to fix the problem.

3. Always remember to get a repair order and keep it in a safe place for as long as you own the car. Dealerships may try to avoid giving them out. If you have already been in for the same problem several times you might hear, “you already know we can’t fix it (or we don’t think there’s a problem) and so we didn’t do any work. So, we don’t have to give you a repair order.” This creates a problem. They can’t repair your car but they won’t give you the document you need to prove it. If polite persistence doesn’t work, you can write them a letter stating the date and time you presented the car with a statement of the defect you brought it in for. If relations have deteriorated to this point, it is probably already time to consult a lemon law attorney.

The California Bureau of Automotive Repair publishes a guide called “Write it Right” which is also available on their web site (www.bar.ca.gov/). It states exactly what needs to be written on a repair order in California.

Hopefully, technicians will be able to fix the problems with your car somewhere during the repair process and you will wind up with the car you paid for. But if not, you may need to seek a warranty refund. Following the three cardinal rules of repair orders will give you vital documentation you need when requesting a buyback in a lemon law case.

Auto sales began a serious slide in the spring of 2008 and by the fall, several manufacturers were down as much as 30% from the prior year. What if anything will this mean to the consumers in their future lemon law claims?

A hint of what may become the prevailing attitude amongst manufacturers happened during the recent Chrysler bankruptcy proceedings. It appeared as though all outstanding lemon law claims and the bouncing checks were going to be swept up and discharged in the bankruptcy leaving many lemon owners out in the cold. There was a public uproar carried by various consumer groups speaking on behalf of those who had purchased a lemon, went through the process and were poised for their refund. The media was such that it gave Chrysler a black eye, and in what appeared to a  PR effort to secure a future with the buying public the “New Chrysler” switched its course and decided to honor the outstanding lemon law claims.

Just prior to GM’s recent bankruptcy filing I was informed by someone in a position to know that GM did nto want to make the same mistake Chrysler did by giving the appearance that it didn’t give a hoot about its buying public or those stuck with a lemon. I took this to mean GM is already looking to the future with a message they will stand behind their product, which includes honoring the lemon law.

Auto manufacturers in this country will survive only if they deliver a high quality product and stellar service. No manufacturer is immune from producing a bad one every now and then. It is the nature of mass production. So when it does happen, manufacturers are smart to stand behind their product and “exchange in abundance” with their public by honoring lemon law claims. Gone should be the days when a consumer has to fight to get what the manufacturer promised at the time of sale; a vheicle free of defects for a given term.

Good news for Chrysler consumers. U.S. customers of the new Chrysler to emerge from bankruptcy will be covered by lemon law rights according to the agreement reached by Chrysler and Fiat. Warranty promises will be honored as originally intended.

Under most states lemon laws, a manufacturer is suppose to either buy back or replace a lemon vehicle where the consumer has given the manufacturer a reasonable opportunity to repair a major problem.

Prior to the agreement reached between Chrysler and Fiat it was unclear how consumers who had initiated claims under the lemon law would be affected by the bankruptcy. Some consumers who had requested refunds on their “lemons” had been issued checks that bounced because of the bankruptcy filing. After many protests by consumer groups and attorneys on behalf of consumers, Chrysler said it immediately requested and received approval from the court to honor warranties in the bankruptcy case. The court decided that all warranty and lemon law obligations will be assumed by the new company after the clsoe of the transaction between Chrysler and Fiat.

Chrysler consumers can now rest easy knowing their warranty is intact and they will still have rights to seek a refund or replacement under the lemon law if they find they have purchased a lemon, whether it was prior to the bankruptcy, during or after.

There is a big difference between warranties and service contracts. A warranty promises to perform needed repairs on the vehicle and that it be free of defects. A service contract offers no promise of quality.

After a reasonable number of failed attempts to repair a vehicle under warranty, you should have the right to a refund or replacement (lemon law). However, you could theoretically have over one hundred failed attempts to repair the same major defect under a service contract, yet still have no right to a refund or replacement.

The price of a service contract is typically based on several factors: the make and model of the vehicle; whether the vehicle is new or used; and the desired overage and length of the service contract. The cost can range from several hundred dollars to over a thousand dollars or even more.

Some people will gladly pay for extra coverage for their vehicle, just for the comfort of knowing that defects will be taken care of no matter what happens, after manufacturer’s warranty expires. For people who keep a close eye on their budgets, service contracts make sense if they paln to put a log of miles on their vehicles in a short period of time. In such cases the original warranty wille expire much sooner, so a service contract could be worth its weight in gold. Otherwise the manufacturer’s basic warranties are usually adequate.

When a consumer is faced with the proposition of going to lemon law arbitration with a manufacturer over their lemon vehicle, the question looms, should I do it?

Most consumers think by so doing they are going to a neutral forum where justice will be served.  However what they don’t know is that the manufacturer pays for this service, and arbitrations are a majority of the time in favor of the manufacturer.  All too often a consumer is “awarded” additional repairs to the defect they have already given the manufacturer a reasonable opportunity to repair.  Ironically, this is no award at all because typically the consumer still has warranty coverage, or if the general warranty expired, the warranty as to the defect they failed to repair (at least in California) is extended for the defect the manufacturer failed to repair during the existence of the warranty.  In the few instances where an award is made, many times it is not in accordance with the laws i.e. it may look like a “lemon law buyback” but the consumer is shorted the complete remedy the law allows.

Why bother going to a forum that is more often than not biased in favor of the manufacturer?  Why put yourself through the frustration of having your case fall on deaf ears?  Most people would like to give the benefit of the doubt to a process like this.  It sounds appealing; it avoids lawyers and the court.  But the truth of the matter is, you’d be better off not going through this process (unless it is required in your state; it is not required in California) and retaining a lemon law attorney to help you.  Many times cases can be resolved without going to court.  Many attorneys will represent the consumer at no cost. 

Don’t fall prey to this pretentious trap.  Bypass any offers to go to arbitration and get a lemon law attorney today!

Will General Motors File Bankruptcy? What will happen to the millions of consumers with GM warranties? Will they have recourse under the lemon law? It all may come down to whether or not GM files for Chapter 11.

Americans are waiting with baited breath to see if General Motors will file for Chapter 11 Bankruptcy on June 1, 2009, or whether their efforts to reorganize on their own can stave off the prospect of doing so. On May 21, 2009 GM reported it had reached a tentative agreement with the United Auto Workers to modify its labor contract with GM, removing a major hurdle to GM’s government-mandated restructuring. Reducing union costs are crucial for GM as it tries to shrink its debt before the restructuring deadline. To avoid bankruptcy, GM and Obama’s Auto Task Force still must reach a deal with bondholders to significantly reduce the $27 billion in debt securities owed. GM must convince its lenders (bondholders) to forgive about 90 percent of the company’s debt. GM is currently being kept afloat by $15.4 billion in government loans. Can GM make it before the June 1 deadline? Will the bondholders force GM into bankruptcy? Those are billion dollar questions. This week we should know the answer.

The “lemon law community” is still waiting to see just how the Chrysler bankruptcy is going to affect lemon law claims. There are consumers who have a legitimate lemon law claim who haven’t filed yet. There are those who have filed lemon law claims and are mid cycle, and finally those who resolved their lemon law claims and haven’t been paid.

It is wise to hold on to claims that haven’t been made yet so as not to be swept into the bankruptcy mess. By all accounts the bankruptcy process is supposed to be fast, and Fiat has a purchase agreement in place to buy Chrysler and among other things will assume specified liabilities including “certain liabilities for product warranties, product returns and rebates…”

There is a big question whether claims that are mid-stream can be resumed with the “New Chrysler.” The language of the proposed sale is ambiguous in this regard.

Just what the purchase agreement between Fiat and Chrysler means in the lemon law context remains to be seen. I think it is safe to assume that the “New Chrysler” will continue to honor Chrysler warranty claims for the driver who goes to the dealer but, one would argue that after a reasonable opportunity to repair defects, that one should be entitled to invoke the lemon law and seek a replacement or refund. The “New Chrysler” cannot have an infinite number of repair attempts while “honoring their warranty.” After all, that is what the lemon law is all about. There comes a time when enough is enough, right?

As for those who have returned their vehicle and got a bounced check in return, hope is on the horizon. There has been a lot of publicity about bounced refund checks from Chrysler, the Los Angeles Times recently wrote an article describing this fiasco. If the “New Chrysler” intends to honor its warranties, they had better honor the lemon law buy back too. They go hand in hand.

I’m sorry Mr. Service Writer person; that dog won’t hunt. Even people who don’t understand how cars work aren’t going to buy it when the service writer says they have misused Mercedes, BMW and an assortment of other manufacturer’s wonderful machines, and that’s why the check engine light is on, the transmission won’t shift out of first and the air suspension causes the vehicle to look like it was designed to go around mountains counterclockwise—only.

The service writer or technician—less often the technician—wants the owner to believe that he or she is too stupid to understand how to use a car. Dealerships actually want consumers to believe their cars are fine, and if they only knew something about cars, there never would have been a problem in the first place.

It’s all about delay. The stall…baffle the consumer with distractions to hide the fact the consumer has bought a piece of crap and the good fellows down at the dealership hasn’t a clue how to fix it. The reason they can’t fix it is because something is wrong with the design.

Telling the consumer, “we’ve checked your car against similar models and they all do the same thing” is such horse dirt! If one of those boneheads told me something like that, good manners go out the window. I’m sorry folks, I’ll tolerate my share of idiocy but here the crap stops! I am going to give him and an ear full. For example, a well-known American convertible; when the top was up and the vehicle was moving at speed with the windows open, boomed and thundered inside the driver’s area like the drum section of the Los Angeles Symphony.

Quite rightly, the owner complained. She said it was driving her crazy. They had the brass to say that they had compared hers to several other vehicles of the same year and model and that they all made that noise. She would just have to live with it.

If I find a herd of zebras in my back yard that has somehow gotten loose from the visiting circus up the street and the circus folks point out that every other house on the block also has a herd of zebras in their backyard, eating their wife’s roses, and that I’ll just have to get used to it, someone’s zebras are dinner.

If you have experienced the dealership blame game, tell us about it. It may not cure them from doing it again, but sometimes it’s a good thing to get it said. By the way, we talk about this abuse and many others in Mr. Taylor’s book on the Lemon Law. Have a look at www.lemonattorneys.com .