Tag Archives: California Lemon Law

Beware of Buy Here Pay Here Auto Sales

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For many people a car is a necessity in life. Even with the best public transportation, daily commutes and errands, are much easier with your own vehicle. As a result, consumers who don’t qualify for conventional loans, may agree to unrealistic terms when purchasing an automobile.

A fast growing corner of the auto market, also known as “Buy Here Pay Here” auto sales, is being advertised as helping the consumer purchase a car, but more often than not, it is the dealership that benefits from the agreement. Buy Here Pay Here lots sold nearly 2.4 million cars nationwide last year, according to CNW Marketing Research. It is estimated that there are more than 33,000 lots nationwide making about $80 billion in loans every year. Some dealerships have been accused of purposefully structuring loans to guarantee the borrower will default. Higher purchase prices, interest rates nearly triple the national average, and aggressive repossession practices make it easy for the dealership to repossess the car and sell it to a new customer at the same high interest rates, and while still pursuing the old borrower for their debt. Some dealerships have been accused of equipping their cars with hidden GPS devices and remote-control ignition blockers to make the repo man’s work easier.

Dealers say they are offering a valuable service for people who can’t get credit for a car. They say they risk never seeing a payment, or the car again. When a buyer does default, repossessing can be a costly hassle. Some cars are never found while others come back so beaten up they have to be junked. “This is not the car business. This is the finance business,” said Ken Shilson, an accountant who founded the National Alliance of Buy Here Pay Here Dealers in Houston. “Not everybody has the stomach for it.”

There have been some crackdowns on Buy Here Pay Here dealerships. In 2004, an Ohio chain settled a federal class action for $21.8 million to customers who say they were misled about their loans. In 2006, the Kentucky attorney general reached a $7.4 million settlement with the nationwide J.D. Byrider chain to settle violations and deceptive sales practices. But these settlements are rare. Buy Here Pay Here businesses are both auto dealers and consumer lenders, it’s not always clear who has authority over them.

You can view the whole story HERE, as reporter Ken Bensinger of the LA Times explains Buy Here Pay Here auto sales and how they can take advantage of people with bad credit while providing a valuable service for someone who needs a car but can’t get credit.

Lemon Law Attorney Exposes Cramming Scam

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Like any other small business owner, California lemon law attorney Kurt Delsack is trying to keep his expenses down, so when he noticed and unauthorized charge on his phone bill, he decided to investigate. The charges came from a third-party billing company called Operated Assistant Network (OAN), and according to Kurt’s investigation, he wasn’t the only person being scammed.

The Federal Communications Commission says about 15 to 20 million households are overcharged on their telephone landlines, costing consumers almost $2 billion a year. Also known as, “cramming”, the overcharges come from third party billing companies for features like voice mail and call waiting. Because these charges are buried within the phone bill only about 5% of households even realize that they are victims.

Don’t become a victim. There is something you can do:

  • Know your phone bill, so you can recognize unusual charges. Most local phone companies require you to opt out or shut off any third party billing, so make sure you contact your phone company to do so.
  • Don’t provide your name, address and phone number for promotions, coupons and sweepstakes without knowing exactly where it’s going. That’s how scammers get your OK to charge you.
  • Contact your phone company right away to dispute any charges you didn’t authorize. You should also contact the third party provider and make sure they are permanently removed from your bill.

    • .

After Kurt talked to Verizon, they reimbursed him for one year of the charges. But now he checks his bill more carefully.

Saab Saved From Liquidation By Chinese Automakers

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Hours before facing court action to liquidate, Saab has been saved by Chinese automakers, Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade, in an agreement to buy the company for a little over $140 million. The Swedish automaker has been struggling to survive since January 2010 when General Motors sold the automobile division to Spyker cars. In April 2011, the company continued to struggle as factories closed due to lack of credit. At the time, the tentative agreement with China’s Pang Da Automobile Trade allowed the factories to reopen, giving the Chinese company an equity stake in Spyker.

The Chinese companies are expected to invest up to $708 million in Saab, and plan to build vehicles at their Trollhattan plant as well as in China, which will become the second home market for Saab. The deal first requires the approval of the authorities in Beijing, the European Investment Bank, the Swedish government, as well as G.M., which has links to Saab, through intellectual property and preferred shares.

Ford Quality Rating Drops

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Consumer Reports’ 2011 annual car reliability survey, seems to mimic JD Power & Associates annual automobile quality study, by reporting that the overall quality of 2011 vehicles has dropped. Ford, suffering the biggest drop, went from 5th to 23th spot, the biggest drop for any major automaker in Consumer Reports’ 2011 Annual Auto Survey. According to the report, the new Ford Explorer, Fiesta, and Focus all had below average reliability, but the problems were attributed to new technologies like the new MyFord Touch infotainment system and the new automated manual transmission. Chrysler had better results with its new Chrysler 200 (formerly Sebring) sedan, the redesigned Dodge Durango and the Jeep Grand Cherokee SUVs. Of the 91 Japanese models for which Consumer Reports collected data, 96%, were rated average or better in predicted reliability. These vehicles, however, offered little in new technology from previous models.

NHTSA To Address Distracting Auto Technology

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The focus of the Federal Motor Vehicle Safety Standards (FMVSS) is to set minimum safety performance requirements for motor vehicle equipment. They protect drivers against unreasonable risk of crashes due to the design, construction, and performance of a vehicle and they set minimum standards for protection in the event of an accident. But when it comes to the design of electronic systems, automobile manufacturers have historically been on their own.

Back when electronic systems were relatively simple automakers followed voluntary guidelines which called for displays to be high enough that drivers can scan the road while viewing displays, and that interfaces be simple enough so drivers don’t take their attention away from the road. But, today’s automobile interfaces have become considerably more complicated and even though car makers tell drivers to pay attention to the roads, they continue to pack their vehicles with infotainment systems that encourage multitasking. Today’s high tech features allow the driver to entertain and navigate as well as stay connected through their phones, e-mail and social media. According to automobile industry officials, “You can’t stop drivers from multitasking and becoming distracted. By giving motorists built-in connections that are simpler and less distracting than portable devices, we are making the roads safer.

Transportation Secretary Ray LaHood disagrees. He calls distracted driving “a deadly epidemic,” and feels federal authorities should set some safety standards. And they are. The National Highway Traffic Safety Administration (NHTSA) is developing its own set of guidelines, to be released this fall. They will address visual and manual distractions and hope to eventually set guidelines for voice controls and portable devices.

Thailand Floods Affect Auto Production

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Floods in Thailand are threatening to affect automotive production for auto makers and suppliers, such as Toyota, Honda, Ford, Mitsubishi, and Michelin. Work in many of Thailand facilities will be halted through to November 5th, affecting production in Japan, the U.S., Canada, South Africa, the Philippines, Vietnam and Indonesia. It is expected that it will take months before the water recedes and residents can start to rebuild. The disaster comes shortly after Japanese car makers return to full production after the March earthquake and Tsunami shut down factories in Japan.

New California Lemon Law For Used Car Buyers

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A new California lemon law bill, signed into law September 28, will give used car buyers more protection than ever before. The law, effective starting July 2012, will require all used and new car dealers to check the vehicle identification number (VIM) against a federal database. This database will have a more comprehensive list than existing commercial services because than law will require all states, insurance companies, salvage yards and junkyards to provide information on vehicles written off in a flood, fire or accident. The system is used by state motor vehicle departments and police, and is open to the public for a small fee.

California Lemon Laws And Small Business Vehicles

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A recently settled lemon law case in California is making it easier for small business owners to exercise their lemon law rights when it comes to vehicles used primarily for the business. Currently the law states that cars and small trucks purchased for personal use are covered under the law, but vehicles used primarily for business, weighing 10,000 pounds or more are not included. In the aforementioned case, the business owners trucks weight was under 7,000 pounds, but because the fully loaded weight was 10,000 pounds it did not qualify under the California lemon law. After a four year battle, courts finally sided with the business owner, saying that the vehicles actual weight and not the fully loaded weight, is what counts. This case will set the precedent for auto makers and future lemon law cases in California involving small business owners and their trucks used primarily for their business.