March 21, 2007

Maybe It Was A Drunk Unicorn...

DATELINE: Billings, Montana, Wednesday, March 14, 2007

County Attorney Dennis Paxinos apologizes to the court, the public and to local DUI defendant Phillip Holliday. Why was he making this public apology? The day before, a deputy prosecutor employed by Mr. Paxinos' office told a local judge an eyebrow-raising story: When officers arrived at the scene where Mr. Holliday had crashed his truck into a light pole, Mr. Holliday told the officers that a unicorn was driving. Yep, a UNICORN was driving.

Well, it turns out that Mr. Holliday never actually claimed a unicorn was driving. The apparently somewhat green deputy prosecutor misinterpreted an e-mail from a colleague that indicated Holliday was pursuing a "unicorn defense" - which is prosecutor-speak for when a defendant blames the offense on some unnamed, unidentified (mythical) other person. In fact, Holliday had told officers at the scene than an unnamed woman was driving at the time of the accident.

Paxinos said he chastised the prosecutors and the pink elephant involved.

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March 21, 2007

Indiana's Lemon Law, How Does It Compare (Part 1b)

In Part 1a, we looked at how Indiana law handles the "reasonable allowance for use" calculation and how it encourages manufacturers to delay the resolution of claims. Let's take a look at how some of our neighbor states handle reasonable allowance for use:


The Illinois statutory provision reads: "A reasonable allowance for consumer use of a vehicle is that amount directly attributable to the wear and tear incurred by the new vehicle as a result of its having been used prior to the first report of a nonconformity to the seller, and during any subsequent period in which it is not out of service by reason of repair." Surprisingly, it does not appear that this provision has ever been interpreted, at least in a published opinion, by an Illinois appellate court. Since I don't practice in Illinois, I can't say how they put this provision into practice, but I believe I've heard that they often use the IRS mileage reimbursement figure.


Michigan law seems a little more consumer-friendly. The statute uses the 100,000 mile benchmark used by Indiana, but also provides that any mileage incurred from the date any defect is first reported up to 25,000 miles is excluded from the calculation, as well as any mileage incurred after 25,000 during which the vehicle "did not provide reliable transportation for ordinary personal or household use." I think these additional consumer protections would make excellent additions to Indiana's statute.


Ohio's lemon law has NO provision to account for the use (mileage) of the motor vehicle! If a vehicle is bought back under Ohio law, the vehicle owner is entitled to a refund of the entire purchase price.


Kentucky's lemon law provides that the manufacturer is entitled to a reasonable allowance for use when refunding the purchase price of a lemon. The only mileage exclusion is for mileage incurred during "those time periods when the vehicle is out of service due to the nonconformity." (Huh? I guess dealership test drives are excluded. What else????) However, it does not explicitly state, like Indiana's statute, that the miles continue to accrue even after the owner has tendered the vehicle (by letter) to the manufacturer.

The conclusion? Looking purely at the respective statutes, Indiana's statute would appear to be the least favorable to consumers among all its neighbors, followed by Illinois and Kentucky, then Michigan, and finally Ohio, because if you have a lemon in Ohio, you can drive the car like crazy and still get a full refund.

Do I think Indiana's statute should be amended? Yes. I think a reasonable compromise would be to cap the "reasonable allowance for use" to the miles incurred before the defect that caused the vehicle to be a lemon appeared.

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March 19, 2007

Indiana's Lemon Law, How Does It Compare? (Part 1a)

I recently read an article about the Tennessee Division of Consumer Affairs' lemon law website. Apparently that website had incorrect information about Tennessee's lemon law up for about four years! Tennessee's lemon law was amended in 2003 to require three instead of four repair attempts and 15 instead of 30 days out-of-service, but the information on the website was never changed. Duuoohhhh!

Anyway, this got me thinking about how Indiana's lemon law compares to other states' lemon laws. Rather than comparing the entire statutes in broad terms, let's get down to the nitty gritty and compare specific provisions. This is Part 1, of what will hopefully be a series, comparing certain provisions of Indiana's lemon law to the corresponding provisions in other states' lemon laws. My general, relatively uneducated impression is that Indiana's lemon law is among the least consumer friendly in the nation, but I guess we'll see.

In my opinion, one of the harshest provisions in Indiana's lemon law is the manufacturer's reimbursement for "a reasonable allowance for use." The basic premise is that if the lemon purchaser wants his or her money back, the manufacturer should be entitled to deduct from that refund a reasonable allowance for the mileage the purchaser put on the vehicle. On it's face, this seems reasonable, but there is a problem with the way this reasonable allowance is calculated under the statute that, in some situations, makes it unfair to Indiana consumers.

Continue reading "Indiana's Lemon Law, How Does It Compare? (Part 1a)" »

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March 6, 2007

Indiana Auto Dealers Rely On CarFax, But Should You?

CarFax is the nation's most popular way to research the history of used cars, and not just by consumers. Whether you live in Lebanon, Indianapolis, or West Lafayette, or anywhere else for that matter, chances are your local dealership has an account. More than 29,000 car dealers in the United States have one.

But the reliability of CarFax's reports has recently been questioned because of attention from the settlement of a nationwide class-action lawsuit. The lawsuit alleged that CarFax's reports were not as comprehensive as CarFax claimed. The settlement will give millions who purchased a CarFax report before October 27, 2006 the opportunity to choose one free or multiple discounted reports, or a 20 percent discount on a vehicle inspection. Big whoop. My guess is that the discounted inspection is coming a little late for most of the CarFax report purchasers.

Anyway, this publicity emphasizes what should really be common sense - that there's really no way a report like this could be 100% accurate. A vehicle history report can certainly be a tool to use in making a used car purchase, but it should never be the sole reason to make a buying decision.

There can sometimes be a substantial lag time between damage to a vehicle and the time that information makes it into the CarFax database. And there are significant sources of relevant information that still are mostly not included in the database, such as insurance claims. With regard to insurance claims, though, that does seem to be changing recently.

CarFax itself has stated that they have never implied that a report was the only tool a buyer needed, stating "we've always encouraged people to get an inspection by a mechanic." And that really is the bottom line. If you aren't a mechanic or a person with significant automobile knowledge, the smartest thing you can possibly do in purchasing a used car is have it inspected by a mechanic. It will be worth every penny.

After all, you wouldn't want to purchase one of these vehicles unknowingly, would you?
And no, I have no idea how that happened or even could have happenedI

As an interesting aside, guess who owns AutoCheck, CarFax's chief competitor? None other than Experian, of credit reporting fame.

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