Secret Warranties on Car Defects

We are living in an age of transparency and businesses are expected to deal fairly with consumers and be open and honest. Yes, even car dealers. We expect that the cars we buy are safe and free of defects. Of course, we are fast learning that this is not the case, even with makes we trusted for years. But one thing we do have in the United States is a strong lemon law that protects consumers from defective products. In California, the Song-Beverly Consumer Warranty Act provides protection for consumers who lease or buy new motor vehicles. If a dealer is unable to service or repair a new motor vehicle to meet the terms of an express written warranty after a reasonable number of repair attempts, the manufacturer is required promptly to replace the vehicle or return the purchase price to the lessee or buyer.

This is not news – we all know that every new car comes with a warranty. However, there is another category of warranty you will never read about in your vehicle maintenance manual or warranty documents – a ‘secret warranty.’

When a manufacturer decides to design and release a new model of a vehicle, a lot of the tasks are farmed out to assorted parts manufacturers all over the world. Prototypes are made and as much testing as can be squeezed in takes place during this process.

Perhaps, during the testing phase it is discovered that the turbo charger had a tendency to produce oil sludge. Sometimes as a result the turbo would fail. Occasionally the turbo would freeze, explode and spatter shattered components all over the countryside; (this is a real example).

The manufacturer has his risk analysts figure out how much of a problem this is likely to be. As long as this is a low figure the new design will go into production. And sure enough after a year or so, five or six out of every one thousand buyers complain about the turbo failing because of a sludge problem. Some of them just get it repaired. A few complain and make a big fuss.

So what does all this have to do with the secret warranty? For those few who make the big fuss and threaten to report the problem to the NHTSA, suddenly the dealer is all cooperation. They agree to make a ‘special exception’ in this case and fix the vehicle defect at no cost. You see, they know that the problem exists and they take care of the few who make a loud enough noise about it.

Every single automobile manufacturer has at least one ‘secret warranty' in place. Some of them have three or four for different defects. If too many safety defects in a certain vehicle get reported, the NHTSA will have to issue a recall. Think Toyota. A recall cost big bucks. So that is why they have these secret warranties – to avoid the pain of a recall.

If you have a defect in your car and someone at the dealership starts telling you it's your fault, don’t buy it. Do your homework. Go online and find out if other owners are experiencing the same defects. Read about the lemon law and find out if a ‘secret warranty’ exists and get the service you deserve.

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