Branding Car Titles Of Lemons Is Now The Law in Minnesota

Call it the scarlet letter for certified clunkers.

This month, Minnesota got in step with a number of other states by requiring all vehicles that have been bought back by manufacturers under "lemon laws" to carry the distinction on their titles.

Lemon laws generally require carmakers to buy back a vehicle that's under warranty if it has critical or chronic defects.

Titles issued in Minnesota can already be "branded" if the vehicles have been drowned, salvaged from a total loss or rebuilt after a terrible accident. The titles feature such alarming designations as "FLOOD DAMAGED," "PRIOR SALVAGE," "REBUILT" and "RECONST."

But until this year, the Minnesota Driver and Vehicle Services agency had no authority to brand a car's title if it was part of a manufacturer buy-back in Minnesota or if it arrived from another state with that stigma, said Larry Ollila, vehicle services program director.

"It's something we put forward as an initiative because vehicles were coming in from other states with that brand," Ollila said. "We didn't have the ability to carry forward the brand. It's a consumer awareness issue.

Ollila said he didn't know how many vehicle titles in Minnesota would have to carry the stamp, although the first "LEMON LAW VEHICLE" brand went on a title on Aug. 1, the day the law went into effect.

The new law comes too late for Angela Lembo of Bloomington, who bought a 2003 Volkswagen Jetta last year. The Jetta had been part of a lemon law buyback program in California, but by the time Lembo bought the car in Minnesota, the title didn't show it.

Lembo found out about the Jetta's checkered history only when she tried to resell it and the buyer made the discovery during a title search. She welcomes the new law.

"It's no different than buying a car with a salvage title," she said. "You know what you're getting into."

Article by James Eli Shiffer

Minneapolis StarTribune.com

Warranty Works on Front End Shake

Bradley Joyce was preparing for grave disappointment.

Shortly after purchasing an $8,724 Thruxton motorcycle from Clinton Cycles in Camp Springs, the geographic information systems manager said he felt "a significant and dangerous feeling wobble" in the bike at speeds over 45 miles per hour.

Several attempts to fix the wobble got him nowhere. He was without his bike for more than a month. Joyce feared that his journey into warranty hell would only lead to no good and an eventual lemon law claim.

Warranties make my head hurt. In most cases that end up here, companies flub the job and tick off the customer. Loopholes in the law, or the lack of any law, further fail consumers. But Clinton Cycles and manufacturer Triumph USA proved Joyce wrong, and Maryland law would have protected him had the situation gone terribly awry.

Excuse my joy. It's not every day I get good consumer news like that, especially after several bleak moments for Joyce.

The Baltimore resident's problem started on July 21 when he took his bike into Pete's Cycles in Fullerton, an authorized Triumph dealer, for a 500-mile initial inspection. Joyce asked the service department to take a closer look for a shake in the front end.

"They balanced the front wheel," said Joyce, who paid $260 for the service visit. "It didn't help."

Joyce called Pete's back to tell them the fix didn't work. They put him on a waiting list. A call back to the original dealer that sold him the bike, Clinton, got Joyce an appointment right away.

On June 28, Joyce dropped the bike off and Clinton diagnosed the problems as "a head bearing in need of adjustment." They tightened it. Joyce started to take the bike home - and turned back around. "The problem was still there," he said.

On July 3, he called Clinton to check on the bike's progress. No one had looked at it yet. That evening, the dealership called to say it swapped the wheel out, but the problem persisted. So Clinton did a complete head bearing replacement under warranty.

The wobble won the day.

On the fifth attempt, even as Joyce's patience was worn microscopically thin, Clinton disassembled the fork tubes, which deal with the front-end suspension and how the bike handles. And still, wobble - 5, Clinton - 0.

At wit's end, Joyce wrote a letter to Triumph's head of customer relations, Peter Carleo. He ended the e-mail by saying that if the problem was not resolved, "I intend to turn the matter over to the state lemon laws."

Lemon laws are great if your vehicle is protected. Not all lemon laws are equal, though. Depending on which state you live in, motorcycles and recreational vehicles may not qualify.

"Most people think they are automatically covered," said Ronald Burdge, an Ohio attorney who specializes in lemon laws. "The amount of lemon law coverage you have might depend on the number of wheels you have. Four wheels? You're probably covered. Three? Probably not. Two wheels, it's 50-50. A lot of states don't cover motorcycles. It makes no logical sense."

The beauty of state lemon laws is that most clearly define what qualifies your vehicle, such as how long and how many times the vehicle needs repair work for the same problem, or specific problems. If you live in a state where your motorcycle or RV doesn't qualify, there is a federal consumer law that could provide some protection, but the presumptions aren't clearly defined.

Luckily for Joyce, Maryland's law does protect motorcycles (but not RVs). Under our law, four unsuccessful repairs or 30 calendar days out of service or one unsuccessful repair of a braking or steering system within 15 months or 15,000 miles allows a lemon law claim.

But here's the even better part of this story.

On the sixth and final attempt, Clinton was set to replace the entire front end of the bike. The dealership called in its master mechanic, who decided to swap out the front wheel one more time.

The wobble vanished, and so did Joyce's consternation - especially when Clinton charged him nothing for any of the 36 hours of work or parts, which would have cost thousands under normal circumstances.

"Ultimately, the people down at Clinton Cycles worked very hard to get my problem fixed," Joyce said. "The bike rides perfectly now."

There are a number of really good lessons here.

•Check that your state lemon law covers what you're buying. If it doesn't, see if a neighboring state has a stronger law that protects nonresidents and consider buying your motorcycle, RV or disability van (which is afforded even fewer protections) from there.

•Deal with the dealer you originally bought your vehicle from, so that your problems are a priority to them.

•Stay on top of the problem. Joyce never let his concern go for more than a week without checking in with Clinton, and he was always politely persistent.

•Go over heads if the problem persists. Joyce wrote a letter to Triumph's Carleo, who made sure that the dealership was communicating with the manufacturer's techs to diagnose the problem. Carleo, who is based in Georgia, was also prepared to fly to Maryland to help if need be.

"Some of the timing problem was based on the techs not finding what the problem was," Carleo said. "Mechanical conditions can be hard to diagnose. These things can take time. We want to rule everything out. Had the mechanical conditions not been resolved, we would have replaced the bike if need be. We take customer satisfaction seriously at Triumph."

Which bring us to the final lesson, which is that a couple of failed attempts to fix a mechanical problem might not necessarily mean that you're getting jacked around. But be sure to keep all correspondence, notes and maintenance records with the dealer and manufacturer and document the time, date and notes for every call. If you fear after a first or second fix that you own a lemon, send a certified letter to the manufacturer.

Do exercise patience, but don't be taken for a fool.

Article by Dan Thanh Dang, Baltimore Sun.com

The Lemon law - Do Some Homework Before Buying Used Car

First, know what it's worth. Just because the price looks good doesn't mean the vehicle may not need some repair work. The Kelley Blue Book and N.A.D.A. Appraisal Guides have been the standard for determining car values for years, and now you can check prices online at www.kbb.com or nadaguides.com. Secondly, know the vehicle's history. If you have the vehicle identification number, you can use a service such as Carfax to purchase a history report on that vehicle. However, the report will only show what has been reported to insurance companies or government agencies. If the vehicle was in a flood, for example, and this was not reported, that information won't show up. Go to www.carfax.com or AAA.com.

Next, check the mileage and gauge it against what you see. If the odometer shows 5,000 miles, for example, but the pedal pads are worn out, that's a clue. Also, look for doorjamb stickers or papers in the glove compartment that may contradict the mileage.

Check tire wheels or rims for marks from wheel weights. The more marks, the more often the tires have been balanced, indicating age. Has the vehicle just been completely repainted? If the mileage is low, this may mean it has been in a wreck. On the other hand, if the vehicle is older, a new paint job may have been called for.

Turn the key on with the engine off and compare the warning lights you see with what the owner's manual says you should be seeing.

If any warning light doesn't work, a different warning light should go on — the one in your head. Someone may have tampered with the vehicle to hide a problem.

Finally, have the car thoroughly examined by an auto technician you trust. If the car's owner or salesperson won't let you have the vehicle checked, pass on it — they're hiding something.

Most dealers provide at least some level of warranty on their used cars. Read the fine print carefully. And consider an aftermarket warranty to further protect yourself. If you're buying from an individual, you're totally on your own from the moment you take possession.

Article by Chuck Mai

NewsOK.com

Research the lemon laws in your state.

Aston Martin Is Subject of Missouri Lemon Law Suit

Sunset Hills, Missouri — Secret agent James Bond relied upon his Aston Martin Vanquish automobile, down to its machine guns, in the 2002 movie "Die Another Day."

But Gary Mathes of Sunset Hills, who presumably has no weaponry on his, says in a lawsuit that he cannot get even the basic systems to work dependably. He is demanding return of the $258,300 he paid for it.

Mathes is suing the vaunted British maker of high-performance luxury cars under Missouri's "Lemon Law."

Specifically, he claims that the 2006 model he bought in February 2006 has problems the dealer can't or won't fix. The suit says he reported problems on at least 12 occasions in the 11 months after purchase — involving the engine, windows, brakes, fuel system, accessories, electrical system, body and "noises." I

n addition to the Lemon Law, Mathes is suing under federal and state laws covering warranties and state consumer protection law.

The case was moved this week to federal court in St. Louis after originally being filed in April in St. Louis Circuit Court.

Mathes' lawyer said the company cannot replace the Vanquish, as only a limited number are made each year. The dealer has said it's not willing to offer a refund "at this point," he said.

Aston Martin's response, filed in court Friday, denies the allegations. A lawyer for the company did not return a call seeking comment, and the company did not respond to an e-mail. It was a division of Ford Motor Co. at the time Mathes' car was built.

The dealer was not named as a defendant and is not identified in the suit.

Public records show Mathes is a retired engineer. Mathes could not be reached.

Aston Martin's website says only a few hundred Vanquish models were built each year. The model has been discontinued.

Under Missouri's Lemon Law, vehicle owners have to report problems or defects in writing to the manufacturer, which gets a "reasonable" number of attempts to fix the problem. If the problem hasn't been fixed after four trips to the dealer, or if the vehicle has been out of service for more than 30 working days for a problem under warranty, the manufacturer can either offer a cash refund or an acceptable vehicle of comparable value.

R. Patrick - St. Louis Post Dispatch - 9/29/07

Laundered Lemons Sold To Unsuspecting Consumers

When Stephen and Michelle Steiner won their lemon-law case against Volkswagen of America last fall, the Stratham, N.H., couple were thrilled. At last they were free of the 2003 Passat wagon that they were afraid to drive.

But delight turned to dismay early this year when Mrs. Steiner, curious about what had become of the car, searched the Internet and found it advertised by a used-car dealer near Rochester as a “perfect family car” with a “clean title.”

The Passat had been anything but perfect. The car had already had three repairs for fuel-pump problems, and the Steiners had become so worried about its stalling that they stopped driving it last summer. New Hampshire had declared it a lemon, so Mrs. Steiner could not believe there was no warning in the online ad about its troubled past.

“I was flabbergasted,” she said. “I thought they would have to let it be known that it was a lemon.”

A few states to the west, Julia and Manuel Moreno found themselves on the other end of a transaction involving a used lemon. In 2005 while living in Wooster, Ohio, they bought a used 1998 Kia Sportage. After a series of problems, they discovered that in 2000 Kia Motors America had bought the vehicle back from its original owner as a lemon. The Morenos said the S.U.V. had steering and suspension problems.

The definition of a lemon varies by state, but in general the vehicle has had a serious problem that remains uncorrected despite several attempts to fix it. A car could also be a lemon if it has had a series of different problems that has made it unavailable to the consumer for a long period, often 30 days.

All 50 states have lemon laws, according to the International Association of Lemon Law Administrators. Once a car is determined to be a lemon, usually by an independent arbitration board, the manufacturer is required to buy it back.

But as the Steiners and Morenos have learned, the car can cause problems after that, because of inconsistent state laws on how lemons are handled. Even if one state requires the title to be branded as a “lemon” or “buyback,” consumer advocates and state officials say there is a good chance the car can be sold in another state with no indication on the title of its troubled past.

“Crossing state lines opens very dangerous opportunities for washing titles or eliminating the branding,” said Attorney General Richard Blumenthal of Connecticut.

Bob Russo, who headed New Jersey’s lemon law program for 16 years and is now president of the Consumers League in that state, said society was so mobile that without a uniform national policy consumers cannot be protected against buying vehicles that had serious problems or might be dangerous.

To see what happens to lemons, Experian Automotive, which specializes in collecting and analyzing automotive data, picked at random 1,000 Florida vehicles that were branded lemons, from a list on a state Web site. Experian found that 555 had been taken out of the state. And four-fifths of those 555 cars no longer had titles branding them as lemons, according to an analysis conducted for The New York Times.

Automakers say that if a lemon’s history is lost it is not their fault. They insist that they require paperwork intended to make sure used-car dealers and consumers know the vehicle had been bought back. In addition, they say, mechanical problems are fixed before the vehicles are resold.

But consumer advocates are skeptical about such claims, saying that if lemons were easy to repair they wouldn’t be lemons. They also note cases where automakers or dealers were caught reselling lemons without warning consumers.

In 2002, the California Department of Motor Vehicles settled an eight-year-old case with Chrysler. The automaker paid $325,000 after the agency found that Chrysler committed fraud by selling 119 lemons — some with unrepaired safety defects — to consumers. Chrysler did not admit any wrongdoing, said Armando E. Botello, a spokesman for the agency. Lisa Barrow, a Chrysler spokeswoman, said that the case was old and that Chrysler “is an ethical company that adheres to all state lemon laws.”

That same year, General Motors paid a $110,000 fine to the State of Ohio because the titles of 515 lemons were not properly branded.

While all states have lemon laws, only 19 — including New York, New Jersey and Connecticut — require the title of a lemon vehicle to be branded with a warning like “lemon” or “manufacturer buyback,” according to a survey by The New York Times.

That warning can easily be lost when the vehicle is sold in another state, because so many states lack provisions for carrying over the lemon designation, said Keith Kiser, vice president for vehicle services at the American Association of Motor Vehicle Administrators.

The number of lemons bought back each year is unclear because automakers decline to provide details, and they are not required to do so. But estimates by consumer groups and state officials range from 25,000 to 60,000 a year.

Whatever the annual number, it is clear that hundreds of thousands of lemons have been bought back by automakers and resold to consumers since lemon laws became more common about 15 years ago, said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, an advocacy group in Sacramento.

After a lemon is bought back, the automaker usually sells it at a car auction for dealers. Rodney Davis, vice president for dispute resolution with the Council of Better Business Bureaus, said automakers made sure lemons were clearly marked when they were sent to those auctions. The potential for the lemon branding to be lost is greater when the dealer then resells the vehicle, he said.

“In some cases it may be an innocent mistake,” Mr. Davis said, “and in other cases it may not be an innocent mistake.”

In 2003, while he was attorney general of New York, Eliot Spitzer required 56 used-car dealers to pay $50,000 in penalties and refund $200,000 to 37 consumers who had not been warned that the cars they bought were lemons.

The Steiners said their Passat is proof that the system can fail and that it can be the automaker’s fault. On the “repurchased vehicle disclosure statement” that accompanied the Passat when it went to auction, VW did not mark the section that reads, “to resolve lemon law claim.”

That disclosure form was filled out and signed by the VW official in Michigan to whom the Steiners sent all the lemon-law paperwork. So that official had to know the car was a lemon, Mrs. Steiner said.

A VW spokesman, Keith Price, said an error was made on the form.

Tony LoCurto, sales manager at the dealership that offered the Passat for sale, Sutherland Auto Sales in Pittsford, N.Y., said he did not know the Passat was a lemon because of the incorrect disclosure form. Mr. LoCurto said Sutherland, which is not a Volkswagen dealer, probably paid more for the Passat than it should have, given that it was a lemon.

Mr. Price said recently that VW had repurchased the Passat from Sutherland. It was sold yet again this month at a Pennsylvania auction, but no details were available last week.

While New Hampshire had declared the Passat a lemon, Mr. LoCurto could send potential buyers the Steiner’s original “clean” title. That was possible because although New Hampshire considered the Passat a lemon and put that information in its computer, the vehicle moved out of state, said Katie Daley, a spokeswoman for the state Division of Motor Vehicles. Had the car been repurchased in New Hampshire, the new owner would have received a lemon-designated title. But when VW sold the vehicle in New York, the car’s lemon history was lost, she said.

Ken Brown, a spokesman for the New York Department of Motor Vehicles, said a New York title was not required for the vehicle to be brought into the state and sold.

As for the Morenos with the troubled Kia Sportage, the problem wasn’t that the S.U.V. was sold out of state. Rather, its title was never properly branded as a lemon, as required under Ohio law.

In 2005, the Morenos sued Kia. The company’s lawyers did not deny that Kia had failed to notify the state, but argued that the Morenos had waited too long to file suit, according to court records.The suit was settled out of court. The Morenos, who now live in West Virginia, still have the car but say they are afraid to drive it. A Kia spokesman, Alex Fedorak, said a company hired by Kia was supposed to brand the title. That company no longer works for Kia, he said.

The issue of lemon laundering has concerned consumer groups for more than a decade; the Federal Trade Commission called a meeting on lemon laundering in 1996. At the meeting, auto company officials said they would accept strong safeguards against laundering as long as the regulations applied nationally, making compliance easier by reducing state-to-state variations.

But consumer groups expressed concern that a federal rule, which would pre-empt state laws, might offer less protection than the strongest state laws, according to several participants. Faced with a lack of consensus, the F.T.C. took no action. “The F.T.C. didn’t really do anything,” said Ms. Shahan, whose group had asked for the meeting.

As a result, there is not much buyers can do to protect themselves, consumer advocates say. Buyers can use a vehicle-history service like Experian Automotive’s AutoCheck (autocheck.com) and Carfax (carfax.com). But some consumer advocates say there may be gaps or delays in the car’s history before information is updated.

What is really needed to protect consumers is a national database of lemon vehicles, said Carol Roberts, executive director of the International Association of Lemon Law Administrators.

Article excerpt from the New York Times - 8/26/07.