May 18, 2007

Can Poor Gas Mileage Make My Car A Lemon?

Q: I purchased a new car six months ago. The gas mileage is horrible. I am probably getting 75% of what I'm supposed to get. I've taken it in to the dealer and reported this problem many times, and they just tell me they can't find anything wrong. Do I have a lemon?

A: With gas prices what they are today, everyone is paying more attention to their gas mileage. If you're not getting the mileage you expected, there's a reason: no one else is either. That's because the mileage figures posted on the window of a new car are ESTIMATES prepared by the EPA. They are usually quite inflated because they are based on a formula from 20 years ago that reflects perfect driving conditions and doesn't take into account raised speed limits, traffic conditions, weather, individual driving styles and the like.

Thankfully, the EPA is revising its formula for gas mileage estimates on its 2008 models. These figures should be more realistic and should reflect more accurately real life mileage figures for all 2008 new vehicles.

So when you say "what I'm supposed to get," you are probably basing that on the EPA estimate. The manufacturer has not promised the vehicle would get that mileage, and so it is very difficult to make a successful lemon law claim based on poor mileage. Your mileage has to be really bad, I mean REALLY bad, like maybe half of the EPA estimate, before we can establish that the vehicle has a defect. (Click here to see the text of Indiana's lemon law and read what defects can make your car a lemon.)

While the mileage you're getting is bad, I don't think it rises to the level necessary to make your car a lemon. You might want to think about trading the vehicle in for a more fuel efficient model.

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May 3, 2007

Don't Blame Consumer Protection Laws

Roy L. Pearson, Jr., an administrative hearings judge in the District of Columbia, took several suits to Custom Cleaners in Washington, D.C. for alteration. One of the pairs of pants was missing when he returned to pick them up two days later. So Pearson asked the cleaners to pay for the suit, around $1,000. A week later, though, the cleaners found the pants and refused to pay. Pearson decided to sue.

So of course Pearson sued for everything to which he felt entitled, which turned out to be $65,000,000. Yep, sixty five million dollars.

Pearson is apparently claiming that the cleaner's signs stating "Satisfaction Guaranteed" and "Same Day Service" are fraudulent. The bulk of the sixty five million is for 43,200 separate violations of D.C.'s consumer protection law, the Consumer Protection and Procedures Act, which is D.C.'s equivalent of the Indiana Deceptive Consumer Sales Act, at $1,500 a pop. Alrighty then. Part of the remainder is money for Pearson to rent a car every weekend for the next ten years so that Pearson can take his clothes to another dry cleaner.

You might have guessed that Pearson is his own lawyer. I'm surprised that even Pearson himself took on a client that dumb.

Pearson has turned down settlement offers of $3,000, $4,600 and $12,000. Meanwhile, the Chungs, South Korean immigrants who opened the cleaners seven years ago, have spent thousands of dollars in attorney fees defending themselves over the past two years.

I just want to go on record as stating that this lawsuit is absurd. But it's important to remember that this abomination of the legal system is in no way typical. This case is already being used by business interest groups to lobby the public against consumer protection statutes across the U.S., decrying "the litigation industry's growing abuse of consumer protection laws." The use of this outrageously extreme case in that way is just as abusive to truth and justice as Mr. Pearson's lawsuit.

I see everyday how much Indiana consumers, and consumer across the country, need laws like these that provide a remedy and access to the courts that they otherwise would not have. I hate to see these much-needed rights come under attack.

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May 2, 2007

Indiana's Lemon Law, How Does It Compare? (Part 3)

So far in this series, we have determined that the Indiana Motor Vehicle Protection Act, Indiana's lemon law, is the least consumer friendly of our neighboring states' lemon laws with regard to: the deduction the manufacturer receives for the mileage on a vehicle in a buyback situation (Part 1) and the kind of vehicles to which the law applies (Part 2). This time, let's take a look at what's called the "term of protection," which is the period of time the law applies following a new car purchase.

Indiana's lemon law is straightforward. Indiana Code 24-5-13-7 states that the term of protection begins on the date the vehicle is delivered to the buyer, and expires eighteen months from that date or when the car has been driven 18,000 following delivery, whichever comes first. Fine, you say, but what has to happen within the term of protection? Does my lemon lawsuit have to be filed within that time? No, it does not.

Indiana Code 24-5-13-8 makes it (mostly) clear that if the buyer first reports the particular repair issue within the term of protection, then the vehicle can subsequently be deemed a lemon based on that particular repair issue even though the vehicle actually becomes a lemon (four unsuccessful repair attempts or 30 or more days out of service) outside the term of protection. So it's only critical that the repair issue manifest itself within the term of protection (and get reported to the dealer). Then, the only other limitation is that the lemon lawsuit be filed within two years of the first repair attempt.

If the repair issue does not first manifest itself within the term of protection, the buyer does not have a lemon law claim in Indiana. However, if the repair issue manifests itself outside the term of protection but within the term of the manufacturer's warranty, the buyer may still have a claim under the Magnuson-Moss Warranty Act.

Let's take a look at the term of protection in other states.

Illinois

In Illinois, the term of protection is called the "statutory warranty period." Surprisingly, it is significantly more restrictive that Indiana's lemon law. The statutory warranty period in Illinois is 12 months or 12,000 miles. But importantly, for the lemon law to be violated, the vehicle must be subject to four repairs or out of service for at least 30 days within the statutory warranty period.

Michigan

Interestingly, Michigan has no mileage limitation. The repair issue must be reported within a year. The vehicle is then presumed a lemon if there are three more unsuccessful repairs within the next two years. Michigan also presumes the vehicle a lemon if it has been out of service for 30 or more days, but only if that occurs in the first year.

Ohio

The term of protection under Ohio's lemon law is twelve months or 18,000 miles from the date of delivery, whichever comes first. The repair issue need only be initially reported during the term of protection. In what seems like a strange twist, at least to me, and one certainly favorable to consumers in Ohio, a lawsuit under Ohio's lemon law must be brought within two years of the expiration of the manufacturer's express warranty term. For some manufacturers (like Hyundai, for example) that could be a long time. There's another twist, too, that appears to make Ohio's law unique. To prove a violation of the statute, the buyer must show that the repair issue substantially impairs the use, safety, or value of the motor vehicle to the consumer after a reasonable number of repair attempts. A reasonable number of repair attempts is presumed to have been undertaken if there have been three unsuccessful repair attempts or the vehicle has been out of service for at least 30 days, either of which must have occurred during the term of protection. I don't practice in Ohio, but it sure appears to me that if some of the attempts or time out of service occurs outside the term of protection, a buyer can still prove they have a lemon; the buyer just doesn't get to take advantage of the presumption and must prove that a reasonable number of repair attempts were undertaken. Interesting.

Kentucky

Kentucky law is identical to Illinois law on the term of protection. Four unsuccessful repair attempts or 30 days out of service must occur within 12 months or 12,000 miles (whichever comes first).

This time, it appears that Indiana's lemon law is the MOST favorable to consumers of all our neighboring states. The bottom line is that Indiana's lemon law protects new car purchasers longer than the other states' lemon laws. That's a good thing. I was beginning to get really down on Indiana's version!

One final comment of interest to attorneys. I noticed that the other states all use a presumption for a reasonable number of repair attempts, i.e.: If there are four unsuccessful attempts, it shall be presumed that a reasonable number of repair attempts has been undertaken. I don't know the other states' law, but to me that means that the presumption is rebuttable. I think that would be a tough row to hoe for a manufacturer, but I suppose in certain circumstances the manufacturer could argue that it should have been given one more chance to get it right. The presumption language does not exist in Indiana. The word "considered" is in place of presumed, which effectively makes it a conclusive presumption. This means that four unsuccessful attempts (amongst other requirements) equals a lemon. I'd be surprised if this issue virtually ever gets raised in the other states.

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