Often in the course of our law firm reviewing the purchase or lease documents provided by our potential clients for their possible “lemon law” case, we uncover various forms of dealer contract fraud. The alleged fraud (not yet proven) can be found in both purchase AND lease contracts provided for customer signature to “finalize” the sale or lease of the new or used motor vehicle.What kinds of “lemon law” claims contain fraud? It often depends on the elements contained in the purchase or lease contract. Some examples of contract fraud can be:
Improper or non-disclosure of “negative equity” on a trade-in.
Dealer not providing a Spanish language contract for customers that only read and write in Spanish.
Contracts that cannot be financed by the lender, and improper “new” contracts are drawn up for signature that supercede the first contract.
Sales in which customers are “required” to buy certain accessories in order to “qualify” for “special” financing, or “qualify” for a particular interest rate.
The dealer does not list the trade-in on the contract at all, resulting in the customer losing the monetary value of the trade-in.
Dealership selling a car “guaranteeing” it has not been in a major accident by virtue of a “clean” title history report given to the customer as “assurance” at time of sale.
There are often other types of dealership contract fraud. We invite you to call our offices if you feel you are the victim of dealership contract/sale/lease fraud.
Saturday, May 24, 2008
Lemon Law... The “no cooling off period” rule
In California, when a customer purchases or leases a new motor vehicle, there is no “cooling off period” rule. What this means is just because you may think that (after signing and taking delivery) that it’s not the right vehicle for you, your payments are too high, or other various reasons that the sale/lease can be cancelled – it cannot. The moment you complete the sale/lease documents and take physical delivery of the car (drive off the lot), there is no “cooling off” period in which to return the vehicle and rescind the sale. At this point it is yours.The only exceptions to the “no cooling off period” are dealer fraud, or if the dealer has delivered the vehicle on a “subject to lenders credit approval” conditional sale, and it later turns out that the dealer cannot secure the necessary financing to complete the sale.Be very careful when you are about to take delivery on a new (or used) vehicle. Sometimes vehicle’s that have problems (both the vehicle and/or the contract) right from the start can be avoided entirely by the consumer following a few guidelines:1. Test-drive the vehicle before signing the contract for mechanical/operational problems.2. Inspect the new vehicle under fluorescent lights for body/paint flaws or dealer-repaired damage. It’s easier to start off with a vehicle that doesn’t required post-sale paint repairs. NOTE: even brand new vehicles may have previously sustained damage during the railcar transportation process, loading or unloading, or while on the dealers lot.3. If buying or leasing a “used” vehicle, (whether or not it’s “certified” or not) have it checked out by a reputable mechanic. Also have a reputable body shop check for undisclosed collision damage repairs.4. Make sure the contract lists all accessories that you are purchasing as part of the sale/lease. NOTE: Accessories added by the dealer (especially non-factory aftermarket accessories) are not reimbursable in a “lemon law” claim. “Lemon law” claims are based on the vehicle ”as equipped” on the factory Monroney label (window sticker).Once you have purchased or leased your choice of vehicle, and if it turns out to be problematic with substantial defects that may be applicable to “lemon law”, we invite you to call our offices for a free case “lemon law” review.
Lemon Law... See us on California’s freeways and highways
The Law Offices of William R. McGee, California Lemon Law Attorneys, has become part of the California highway “landscape”, with outdoor billboard advertising on California’s freeways and highways. Our high visibility “1-800-CA-LEMON” phone number provides California motorists with an instant “lemon line” to call and get rid of their “lemon” vehicle.
Lemon Law... Dealership “pressure” sales tactics
Most new vehicles manufactured for sale or lease to consumers turn out to be “good” vehicles to their buyers or leasers, fulfilling their requirements of providing reliable transportation.Some vehicles will turn out to be “lemons” under our California Lemon Law. These vehicles will turn out to have operational/mechanical problems, and/or safety/use impairment issues.Can a consumer spot a brand new vehicle that may be a potential “lemon”? The answer is YES. Can consumers avoid these potential lemons? Yes. Do automobile dealerships often pressure the customer to “speed up” the sale/lease process and side-step important pre-sale decision steps? Yes.Some examples of potential “lemon law” candidate vehicles are:1. Vehicle’s that have a severe steering “pulling” problem noted by the consumer on the “test drive”.2. Vehicle’s that have paint flaws, such as “peeling” or “flaking” new paint. Also, vehicle having “panels” that do not color match to one another (example: fender does not color match door correctly) should be avoided.3. Vehicle’s that have doors or hatches that improperly close/latch/fit.4. Vehicle’s that are represented as “company demonstrators” or “executive cars” that are registered as “new”, but the consumer fails to have inspected for abuse or damage prior to signing the contract.How does the consumer avoid the “pressure tactics” of car dealerships and car salespeople, yet at the same time ensure that they properly inspect and “test drive” their vehicle choice? It’s basically a “buyer takes control” step-by-step plan.To “take control” of the vehicle purchasing/leasing experience and minimize stress, “pressure sales tactics” and reduce the possibility of a “lemon” vehicle, consider following these steps:1. Speak with your banker or credit union on what price vehicle you can afford before you go into a car dealership. Discuss your available down-payment, payments, etc. with your loan officer so you will have a good idea what the “maximum price” car you can afford before starting your car buying/leasing quest. Any purchase price you end up negotiating that is below your “target price” will result in a lower monthly payment.2. Before visiting the car dealership(s), do your homework on the internet. A wealth of information is available on the internet, including factory rebates, incentives, special financing and more. Most manufacturers allow you to “build” your vehicle online at their web site, reviewing what the “MSRP” (manufacturers suggested retail price) is before ever going on a dealers lot! Many websites, such as www.kbb.com, and www.edmunds.com allow you to “build” a new vehicle on line with options you desire, allowing you to see both “retail” and “dealer invoice” prices. 3. Once completing your “pre-dealership visit homework”, it’s now time to visit the car dealership.4. Once you have completed the time necessary to find the vehicle that is the your potential purchase/lease candidate, you will need to remember this important tip: “price negotiations at the dealership can either be to the benefit of the consumer, or to the dealer”. Time=Fatigue=Pressure. The more time you spend at a dealership, the more tired you become. The more tired you are (as well as the emotions involved in the car buying experience) the more fatigued you become, and the dealer then takes control. If you find that you are feeling tired, fatigued or “pressured”, STOP. This is where the buyer can take control. You can choose to halt the negotiations/sale process for some “breathing room”. This is a good time to consider returning on another day to the dealership. A simple refundable deposit check is all that is necessary to “hold” a vehicle so you can come back another day to continue the negotiating/sale process. There is a big difference between signing a contract (completed sale), and simply leaving a refundable deposit to “hold” the particular vehicle you are interested in.5. What if the vehicle has a rebate and/or special financing, that is ending the day you find your vehicle? This is a situation that requires you to make choices. These choices are up to you. 6. What if the dealer “pressures” me with “this price is only for today” or similar verbal sales tactics? Figure it this way, if the dealer can sell it to you for “X” price today, what makes tomorrow any different? Answer: nothing. If the dealer attempts to talk “rebate ends” or other tactics, the rebates have nothing to do with the “selling price” that the dealer is negotiating with you. The rebate is taken after the vehicle purchase price, tax and license are computed. Don’t fall for this old dealer pressure sales tactic.Remember, no one is handcuffing you to a chair at the dealership. You can get up and leave at any time. The buyer is in control until or unless the buyer chooses to allow the emotions (or the dealer) to control the sale. Keep in mind this is a business/monetary transaction. You are exchanging money and/or a financial obligation in return for motoring transportation. If you treat it as such, and not a “spur of the moment” or “pressured” same day decision, you will likely end up being happier with your purchase/lease decision.Once you have decided upon and have completed your vehicle acquisition, and if it for some reason the vehicle turns out to be a “lemon”, we would invite you to call our law offices for a free “lemon law” case review and evaluation.
Lemon Law... Used Car Lemon Law
Can a vehicle purchased or leased as “used” be considered a “lemon” under the California Lemon Law? The answer is “yes”, if it meets certain criteria:
The vehicle is covered by the balance of the manufacturer’s new vehicle limited warranty.
The vehicle was sold with a manufacturer’s “certified” used vehicle limited warranty.
The vehicle was sold with a limited warranty provided by the selling dealer, as described on the “BUYERS GUIDE” disclosure label.
When a vehicle has had an unreasonable number of repair attempts within the limits of the manufacturer’s warranty period for a repeated defect of a substantial nature, the vehicle may be a “lemon law” candidate. The California lemon law may be applicable for repurchase relief.If the vehicle has had an unreasonable number of repair attempts within the limits of the dealer-provided limited warranty for a repeated defect of a substantial nature, the dealer can be pursued for legal remedy. NOTE: Our law firm does not pursue “independent” used car dealerships (meaning those dealerships that are not franchised to sell new cars). It should be noted that for vehicles covered by a dealer-provided limited warranty, the vehicle must be presented to the selling dealership for warranty repairs.
The vehicle is covered by the balance of the manufacturer’s new vehicle limited warranty.
The vehicle was sold with a manufacturer’s “certified” used vehicle limited warranty.
The vehicle was sold with a limited warranty provided by the selling dealer, as described on the “BUYERS GUIDE” disclosure label.
When a vehicle has had an unreasonable number of repair attempts within the limits of the manufacturer’s warranty period for a repeated defect of a substantial nature, the vehicle may be a “lemon law” candidate. The California lemon law may be applicable for repurchase relief.If the vehicle has had an unreasonable number of repair attempts within the limits of the dealer-provided limited warranty for a repeated defect of a substantial nature, the dealer can be pursued for legal remedy. NOTE: Our law firm does not pursue “independent” used car dealerships (meaning those dealerships that are not franchised to sell new cars). It should be noted that for vehicles covered by a dealer-provided limited warranty, the vehicle must be presented to the selling dealership for warranty repairs.
Lemon Law... FAQ's (frequently asked questions)
1.Am I required to go through Arbitration before pursuing a Lemon Law claim?
No. The California Lemon Law does not require the consumer to participate in arbitration that may be offered by the vehicle manufacturer in order to pursue a Lemon Law claim.
2.Am I required to notify the vehicle manufacturer and give them a opportunity to repair a problem before pursuing a Lemon Law claim?
No. So long as the manufacturer’s authorized warranty repair facility has had a reasonable number of opportunities to repair a warranty problem, the manufacturer need not be given notice or a opportunity to repair the problem.
3.Does the Lemon Law apply to vehicles that are older than one or two years?
Yes. As long as the vehicle is having warranty problems, the Lemon Law potentially can apply no matter hold old the vehicle is. The Lemon Law may also apply to a vehicle even if the original new vehicle warranty has expired so long as the vehicle is still having problems complained about on repair orders during the original warranty period.
4.Does the Lemon Law apply to vehicle that have in excess of 18,000 miles, or 18 months?
Yes. As long as the vehicle is having warranty problems, the Lemon Law may apply no matter what the odometer reading is on the vehicle.
5.Is a vehicle registered to a business on lease or purchase covered by the Lemon Law?
Please click on our web site link “Senate Bill 1718 Passed” for more information on business use/owned/leased vehicles.
6.Is there a specific number of repair attempts that must be completed in order to have a valid Lemon Law claim?
No. There must be a reasonable number of repair attempts. The definition of what constitutes a reasonable number of repair attempts will vary given the vehicles particular problem(s). In general, if a problem has been subject to at least four separate repair attempts at the manufacturers authorized repair facility, or has spent more than 30 days cumulative in the shop, this is sufficient to establish a reasonable number.
7.Are there situations where only 2 repair attempts are considered reasonable?
Please click on our web site link “Senate Bill 1718 passed” for more information.
8.Does the Lemon Law apply only to passenger cars?
No. The Lemon Law applies not only to passenger cars, but also to trucks, SUV’s, vans, motorcycles, and all consumer goods that are covered by a manufacturers warranty and are used primarily for personal, family or household use.
9.Does the Lemon Law apply to vehicles that are purchased used?
Yes. The Lemon Law can apply to a used vehicle. The vehicle must be covered by a warranty.
10.Does the Lemon Law apply to minor defects, or only significant defects?
The Song-Beverly Act applies to defects which constitute a substantial impairment to the use, value or safety of the vehicle to the owner or lessee. Therefore, inconveniences (static or poor reception in the radio, for example) normally do not make a Lemon Law claim. Serious problems with brakes, transmission, engine function, SRS/airbag, inoperable air conditioning, persistent water leaking, engine oil or transmission oil leaks, overheating, “CHECK ENGINE”, to cite a few, are examples of Lemon Law impairment to use, value, or safety of the vehicle. There are other federal laws that further expand on what is considered to be a “defect” that constitutes replacement of purchase price or a refund of monies spent.
No. The California Lemon Law does not require the consumer to participate in arbitration that may be offered by the vehicle manufacturer in order to pursue a Lemon Law claim.
2.Am I required to notify the vehicle manufacturer and give them a opportunity to repair a problem before pursuing a Lemon Law claim?
No. So long as the manufacturer’s authorized warranty repair facility has had a reasonable number of opportunities to repair a warranty problem, the manufacturer need not be given notice or a opportunity to repair the problem.
3.Does the Lemon Law apply to vehicles that are older than one or two years?
Yes. As long as the vehicle is having warranty problems, the Lemon Law potentially can apply no matter hold old the vehicle is. The Lemon Law may also apply to a vehicle even if the original new vehicle warranty has expired so long as the vehicle is still having problems complained about on repair orders during the original warranty period.
4.Does the Lemon Law apply to vehicle that have in excess of 18,000 miles, or 18 months?
Yes. As long as the vehicle is having warranty problems, the Lemon Law may apply no matter what the odometer reading is on the vehicle.
5.Is a vehicle registered to a business on lease or purchase covered by the Lemon Law?
Please click on our web site link “Senate Bill 1718 Passed” for more information on business use/owned/leased vehicles.
6.Is there a specific number of repair attempts that must be completed in order to have a valid Lemon Law claim?
No. There must be a reasonable number of repair attempts. The definition of what constitutes a reasonable number of repair attempts will vary given the vehicles particular problem(s). In general, if a problem has been subject to at least four separate repair attempts at the manufacturers authorized repair facility, or has spent more than 30 days cumulative in the shop, this is sufficient to establish a reasonable number.
7.Are there situations where only 2 repair attempts are considered reasonable?
Please click on our web site link “Senate Bill 1718 passed” for more information.
8.Does the Lemon Law apply only to passenger cars?
No. The Lemon Law applies not only to passenger cars, but also to trucks, SUV’s, vans, motorcycles, and all consumer goods that are covered by a manufacturers warranty and are used primarily for personal, family or household use.
9.Does the Lemon Law apply to vehicles that are purchased used?
Yes. The Lemon Law can apply to a used vehicle. The vehicle must be covered by a warranty.
10.Does the Lemon Law apply to minor defects, or only significant defects?
The Song-Beverly Act applies to defects which constitute a substantial impairment to the use, value or safety of the vehicle to the owner or lessee. Therefore, inconveniences (static or poor reception in the radio, for example) normally do not make a Lemon Law claim. Serious problems with brakes, transmission, engine function, SRS/airbag, inoperable air conditioning, persistent water leaking, engine oil or transmission oil leaks, overheating, “CHECK ENGINE”, to cite a few, are examples of Lemon Law impairment to use, value, or safety of the vehicle. There are other federal laws that further expand on what is considered to be a “defect” that constitutes replacement of purchase price or a refund of monies spent.
Lemon Law... Arbitration - What you should know
“Arbitration” is an “alternative dispute resolution process” that many automobile manufacturers make available to purchasers of their vehicles who may want to pursue their Lemon Law rights. A consumer does not have to use the manufacturer’s arbitration process to enforce the Lemon Law. A consumer can choose to use a Lemon Law attorney.An arbitration hearing is not necessarily a “win” or “lose” outcome for the consumer. The arbitrator may “award” another repair attempt for the vehicle's manufacturer as the “reasonable” solution to the problem(s), even though the consumer feels that they have provided the manufacturer or its dealership with more than enough repair attempts. In addition, if the arbitrator does not feel that the consumer’s problem is “substantial,” the arbitrator may reject the consumer’s claim. Often times the arbitrator will ask to test drive the consumer’s vehicle in an attempt to duplicate the consumer’s complaint, however, if the problem is of an intermittent nature this can result in a denial of the consumer’s claim. A very common arbitrator's decision is to order an additional repair attempt, typically infuriating the vehicle owner. The consumer needs to be aware that an arbitrator’s decision or opinion is not a binding determination of the consumer’s Lemon Law rights.It is important for the consumer to know that a manufacturer’s arbitration process is VOLUNTARY in California. In other words, the consumer does not have to use the manufacturer’s arbitration process to enforce the Lemon Law. It is also important to be aware that while the arbitrator’s decision is not binding on the consumer, the decision is admissible in any later court proceeding and may be used against the consumer by the automobile manufacturer.Often times in the course of the arbitration process, the automobile manufacturer may make an offer to the consumer to “resolve” his/her Lemon Law claim. However, such an offer by the manufacturer may not follow the requirements of the Lemon Law and may provide the consumer with substantially less than the Lemon Law would otherwise provide the consumer.If you are considering, or have already applied for arbitration, you should consider calling our offices prior to any arbitration hearing taking place. In addition, if you have already completed the arbitration process and would like to know if you received or have been awarded your full Lemon Law entitlement, you should consider calling our office for a arbitration award review.
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