California Lemon Law Lawyer Blog

California Senate Committee Approves Bill to Regulate Buy Here Pay Here Car Dealers

Thu, 19 Apr 2012 08:08:14 -0800

Yesterday, the Senate Banking Committee of the California Legislature approved a bill that will put a limit on the interest that Buy Here Pay Here car dealers may charge consumers. The bill will also place such dealers under state regulation as lenders. BHPH dealers' typically sell cars to consumers with poor credit at extremely high interest rates of 27% or more. The dealers are willing to risk non-payment because they get a down payment and upon default, they simply repossess the car and sell it to someone else. The dealers claim large losses justify their exorbitant interest rates (often 27% or more), but the losses are mostly illusory.

Ken Bensigner, a LA Times reporter, has been investigating the growth of this segment of the car dealer business. He has reported that the BHPH business is so lucrative that hedge funds are behind some of the BHPH dealer groups. A LA Times story on yesterday's legislative action is here.

I testified before the Senate Panel on behalf of the National Association of Consumer Advocates. One of my clients who bought a car from a BHPH dealer also testified. Rosemary Shahan who is with Consumers for Auto Reliability and Safety, also testified in favor of the bill.

The 2012 New Car Book Is Available

Tue, 10 Apr 2012 15:11:45 -0800

For 32 years, Jack Gillis and the Center for Auto Safety have published a consumer’s guide to the year’s best and worst cars. The book is a buyer’s guide, a list of best cars to buy in different categories, the results of safety tests, fuel economy, warranties, tires, and strategies for negotiating deals with car dealers. Anyone contemplating a new car purchase may wish to buy a copy ($28 from the Center for Auto Safety).

The Car Book’s best bet new cars in the subcompact size category are the Chevrolet Sonic and the Hyundai Accent. The highest rated compact is the Chevrolet Cruze.

The highest overall rated intermediate size cars are the BMW 5 series, Buick LaCrosse, Hyundai Sonata, Toyota Camry and the VW Passat. The highest rated mid-size SUV is the Volvo XC60.

In crash tests of subcompacts and compacts, the Chevrolet Sonic, Volt and Cruze got top ratings as did the Scion IC, Toyota Corolla, and Toyota Prius. In the intermediate size category, The BMW 5 series, Buick LaCrosse, Cadillac CTS, Chevrolet Camaro, Hyundai Sonata, Toyota Camry and VW Passat did well. The best rating among intermediate SUVs was the Volvo XC60. The large SUVs had good ratings overall. Pickups overall had poor ratings.

The cars that scored worst in crash tests were the tiny Fiat 500, Nissan Versa, and Nissan Sentra. Overall, the smallest cars had the worst crash test results with the exception of the Chevrolet Sonic and Cruze models, which had outstanding ratings, even compared to larger size cars. In fact, three of the safest new cars are these Chevrolet models along with the intermediate SUV, the Volvo XC60.

Consumer Advocate Rosemary Shahan Featured in LA Times

Sat, 31 Mar 2012 10:48:51 -0800

Rosemary Shahan has been a leading advocate for car buyers for many years. The LA Times just published a complimentary profile about her work.

Rosemary is our leading advocate for laws to strengthen the California Lemon Law. She has also been instrumental in successful efforts to kill industry proposals to weaken the law.

Petition Asking Enterprise Rent-A-Car to Perform Safety Recalls

Thu, 01 Mar 2012 07:35:23 -0800

Consumers for Auto Reliability & Safety is continuing its campaign to induce Enterprise Rent-A-Car to agree to perform safety recalls before renting out car in its fleet. The campaign began after two sisters died in a crash that would not have happened if Enterprise had performed a safety recall.

CARS and our other consumer groups have joined with Change.org, which is an online platform for social change, asking consumers to sign a petition imploring Enterprise to set a new policy. Over 148,000 have signed the petition just in a matter of days. Polling data indicates almost everyone agrees Enterprise should change its policy to protect its customers. Hertz has voluntarily agreed to perform all safety recalls before renting cars.

So join this campaign; just click here to sign the petition.

http://www.change.org/petitions/enterprise-rent-a-car-stop-opposing-a-law-prohibiting-companies-from-renting-out-recalled-cars

Honda Recalling 2008-2009 Odysseys for Faulty Lift Gates

Thu, 23 Feb 2012 17:32:44 -0800

Honda is recalling its 2008-2009 Odyssey models due to a faulty lift gate. Chris Jensen, who follows such developments in the New York Times, reports that 46,000 Odyssey minivans may have struts supporting the power liftgates may fail.

In a document posted Wednesday on the federal safety agency’s site, Honda said a manufacturing flaw on the Odyssey EX-L and Touring models equipped with power liftgates allowed pressurized gas to escape from the struts. The condition could result “in the liftgate closing under its own power, possibly unexpectedly,” according to Honda. The recall followed an investigation initiated by the safety agency.

In 2009, the safety agency told Honda to recall recall 22,000 model year 2005 Odysseys, but Honda refused claiming ”the failure of the struts was an inconvenience, but not a safety defect."

Car Buyers May Save Money by Refinancing their Loans

Tue, 21 Feb 2012 08:48:47 -0800

Car buyers stuck with high interest rate car loans should consider refinancing their loans with a credit union. Many buyers do not realize that credit unions may offer lower interest rates. Refinancing options are discussed in a Detroit Free Press story.

Consumers should not assume they cannot join a credit union as it is now usually pretty easy to find one to join. To find a credit union to join go to the credit union associations' website.

Used Car Buyer Gets Money Back

Thu, 16 Feb 2012 15:31:32 -0800

Ms Jendry Ramos bought a used 2003 PT Cruiser from a Jim Auto Sales, San Pablo, CA, car dealer. The dealer sold the car with bald tires, which is a violation of California law. A tire store that replaced the tires found more problems--the wheels were bent and had to be replaced.

The history of the car indicated it had been in five (5) previous collisions and was in terrible mechanical condition.

The dealer ignored our letter demanding a repurchase. After a lawsuit was filed and served, the dealer promptly agreed to a repurchase with Ms Ramos getting all her money back and the loan cancelled.

Ms Ramos' experience was the subject of a consumer report by Channel 5 in San Francisco.

Owner Stuck with Lemon Wind Turbine

Mon, 13 Feb 2012 14:08:51 -0800

Most lemon cases involve defective cars and trucks, but the lemon laws also cover other products. I represent an owner of a wind turbine that was supposed to provide power for his residence Oak Run, Ca. The wind turbine was defective from “day one” and never produced any significant amount of electricity in spite of various repair attempts. The owner paid about $65,000 for the turbine.

The turbine was manufactured in Shanghai, China and distributed by Re-Driven Power, Inc., Ontario, Canada. A lawsuit is pending in the Shasta County Superior court alleging that Re-Driven breached the a five-year warranty on the turbine.

Civic Hybrid Owner Wins $10K in Small Claims Court

Wed, 01 Feb 2012 19:26:08 -0800

A crusading Civic hybrid owner in LA won almost $10,000 in her small claims case giving Honda a black eye in the process. The LA Times article recounts the story of Heather Peters taking on Honda in small claims court arguing that her hybrid never got the mileage Honda advertised it would get.

Heather Peters, a former attorney, has received massive publicity on her case (go to www.dontsettlewithHonda.com). The results in the small claims court demonstrate the unfairness of a class action settlement pending before a San Diego County Superior Court judge in which owners who do not opt out will get only $200 in damages.

Ms Peters surely has invested a great deal of time in her case. There is an easier way for 2006 to 2008 Civic hybrid owners to achieve justice! Just hire me or some other knowledgeable lemon law attorney. The IMA battery warranties have not expired on these cars.

I have obtained buybacks from Honda in two cases and have five other cases pending. The law is definitely on the owners' side; owners just need a lemon law attorney to make it work.

Owners must opt out of the settlement by February 11, 2012, or their claims will be barred (assuming the judge approves the settlement).

Unfair Class Action Settlement Affects 2006-2008 Honda Civic Hybrid Owners

Thu, 29 Dec 2011 12:22:25 -0800

In July 2010, Honda announced new software for the IMA batteries in the 2006-2008 Civic hybrids. The purpose of the update was to prevent the batteries from deteriorating. Since the batteries are under 10 or 15 year warranties, Honda would have to pay for replacements. The problem is that the software update caused a 25% reduction in fuel mileage and a 25% loss of power. Owners are not happy with the results needless to say.

Honda has repurchased two Civics from owners I've represented. I have three other cases pending or others about to be filed. But here's a warning and some advice to unhappy Civic owners--a pending class action settlement in the Superior Court in San Diego county will wipe out owners' claims if, as expected, it is approved by the Court. The settlement provides for a payment of $100 to all Civic hybrid owners based on Honda's misrepresentations of fuel economy back when the cars were being sold and another $100 to Civic owners who file a claim stating they are unhappy with the results of the July 2010 software update.

Owners of 2006, 2007, and 2008 Civic hybrids throughout the U.S. are affected. Unless owners are satisfied with the $200, they should "opt out" of the settlement and find an attorney to file their own case. The procedure is simple--just write a letter to the Settlement Administrator, P.O. Box 2566, Faribault, MN 55021-9566 stating your name, address, year of your car and the VIN and that you want to be excluded from the settlement. Deadline to opt out is February 11, 2012. If you don't opt out, you will be precluded from bringing your own case. Of course, if you don't wish to bring your own case, you may fill out a claim form and get the $200. More information on the settlement is available at www.hchsettlement.com.

2006 Jeep Wranglers "Death Wobble"

Wed, 30 Nov 2011 10:56:12 -0800

http://www.youtube.com/watch?v=vwiv23dLhMY

2006 Jeep Wrangler owners are reporting they experience a violent shaking at certain speeds.
Check out the You Tube video.

One owner, Heidi Schwartz of Annapolis, MD, said her 2006 Wrangler shakes between 50 and 60 miles per hour causing a near loss of control.

The federal safety agency website, safercar.gov has 436 complaints about 2006 Jeep Wranglers.

Clarence Ditlow, executive director of the Center for Auto Safety, has been pushing the safety agency, NHTSA, to take action since it is a safety issue.

Rosemary Shahan, president of Consumers for Auto Reliability and Safety called NHTSA's lack of action "mind-boggling." She plans to contact NHTSA's Office of Defects Investigation to ask for action. "NHTSA is the pressure point," Shahan said. "I don't see how you can say with a straight face that this is not a safety defect.

Buy Here Pay Here Used Car Dealers Rip Off Consumers

Mon, 31 Oct 2011 08:15:54 -0800

Buy Here Pay Here used car dealers prey on people who cannot buy a car because their credit scores are very low. Most of these people need a car. The Buy Here Pay Here car dealers do not use outside lenders to finance car sales; instead, they finance in-house. When a person buys a car, he or she agrees to make payments to the car dealer.

The problem is that these dealers have tremendous opportunities to take advantage of their vulnerable customers. They charge interest rates on the financing of 30% or more. They markup the vehicles, which are usually one step from the junkyard, of 100% or more.

The dealers do not care if the buyers default as they often do given the high prices of the cars and sky-high interest rates. When buyers miss a payment, the dealers repo the car and sell it to the next guy keeping the prior buyer's down payment and monthly payments.

A Los Angeles Times reporter has written a fine report on this predatory business. He reports that Wall Street investors are putting money into such dealerships and even securitizing the car loans.

I am representing a buyer in a lawsuit against Autoville Motors in Sacramento, which is one of the Buy Here Pay Here dealers.

The reporter traced the history of one car sold eight times by the same Pay Here dealer.

Flood Cars Being Sold in Arizona

Thu, 27 Oct 2011 15:27:26 -0800

Joe Ducey, a reporter with the ABC affiliate in Phoenix, is reporting that cars caught in floods in the Phoenix area are being sold in the that area. Ducey counted 36 being sold one day in Phoenix.

The cars are listed on the Insurance Auto Auction's website as flood cars. The cars were totaled due to flood damage.

Consumers for Auto Reliability and Safety warns that flood cars are likely rotting from the inside -- with ruined electronic systems, brakes, airbags, or engine components. Some of these vehicles might have gotten cosmetic fixes in order to sell the car, and a buyer may not notice. In Arizona, which has weak consumer protection laws, has no special designation on titles for flood. So, they could be seen as clean titles.

Before buying any used car, check the Vehicle Identification Number (VIN) through the National Motor Vehicle Information System (www.add123.com). This is often a more up-to-date system than Carfax.com or AutoCheck.com.

Joe Ducey is an excellent consumer reporter who formerly worked for Channel 4 in San Francisco.

Radioactive Used Cars on Sale in Japan

Thu, 27 Oct 2011 10:34:21 -0800

If you are shopping for a used car in Japan, be warned. It may be radioactive! Dishonest car dealers are selling cars contaminated by radiation from the Fukushima Daiichi nuclear plant meltdown.

The cars were supposed to have been destroyed. However, some dealers registered cars under new license plates and sold them according to the Asahi Shimbun newspaper. Dealers initially tried to export the cars to Russia, but the police turned them back after finding they were radioactive. Testing at the docks in Japan has stopped exports of the contaminated cars.
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One van that was re-registered and sold within Japan was found to emit 110 microsieverts of radiation an hour, which is 300 times the legal limit.

This story is on the NBCLosAngeles.com site.

Best and Worst Bay Area Auto Repair Shops

Mon, 24 Oct 2011 16:01:04 -0800

Consumer's Checkbook, which is a nonprofit magazine and website available by subscription at $34 per year, annually publishes the results of its survey of persons who have deal with Bay Area auto repair shops. The surveys cover price and quality of work. Of the 559 shops evaluated, 221 were rated "superior" for their overall quality by 90% or more of their surveyed customers. On the other hand, 66 shops were rated "inferior" for overall quality by at least 20% of those surveyed.

Checkbook found no relationship between shops' prices and the quality of their work! Checkbook also found that price differences can be dramatic. Replacement of belts on a Honda Accord ranged from $506 to $1,200. Hourly rates ranged from $80 to $196.

Persons who did business with new car dealers' service centers rated their overall performance as superior only 61% of the time. Persons rated non-dealer repair facilities superior 87% of the time. This may prove that non-dealers have to try harder to stay in business.

Using its site, checkbook.com, you can sort and select shops by such factors as location, whether the shop does in-factory repairs, and by considering price and quality.