Posted On: September 28, 2007

Chrysler seeks refund on sales tax for Lemon Law repurchase and replacement settlements

Under most state lemon laws (including Texas Lemon Law), when a consumer gets a new repurchase or replacement settlement from the car manufacturer, they are also entitled to a reimbursement for sales tax, title, license (TTL), and other relevant fees. Thereafter, car manufacturers such as Mazda and General Motors (GM) will in turn apply to the state to get those TTL fees refunded back to it. However, such is not the case in the state of Connecticut.

Chrysler (LLC), once known as DaimlerChrysler Corporation, is appealing its case to the Connecticut Supreme Court on the issue presented above. Previously, the Connecticut tax department, along with the state's Superior Court both ruled against the private car manufacturer.

Although TTL fees may seem like small amounts to be fighting over -- especially to the state Supreme Court; when you consider the aggregate costs of all TTL fees involved in lemon law buybacks to all fifty states, then the amount may significantly reach the potential million of dollars.

For more information about Chrysler's fight, click here. For more details about TTL refunds for Texas lemon law buyback, click here.

Posted On: September 26, 2007

Lemon cars (vehicles) in civilian and military environments

In a civilian context, when you buy your new car, chances are that you will drive it on paved highways and roads -- perhaps rarely on a dirt road or park it on the grass. (For example, I commute from Fort Worth to my office in downtown Dallas on a regular basis and normally drive on concrete roadways such as interstate 75 and 360). Most production cars are designed with this assumption in mind, although some are designed specifically or off-roading.

If you were to take your average economy sedan and start driving over hills and into ditches,…you would soon be in trouble. A car manufacturer would probably not be overly sympathetic if you claimed that your Kia Rio was a lemon because it experienced multiple system failures while you were creating your own path through the Amazon rain forest.

Vehicles used by the military have quite different requirements. Military vehicles need to be able to traverse unpaved paths and go cross-country. There are some vehicles that have made the transition from military to consumer use. A recent example of this is GM’s High Mobility Multipurpose Wheeled Vehicle HMMWV (aka Hummer). The model line was expanded for the civilian market with scaled down versions, the H2 and H3. In 2006, GM announced that it would no longer market the original full sized H1 Hummer.

Long before the Hummer, there was the Jeep. The Jeep was the prototypical army-to-civilian vehicle. The U.S. Army received its first shipment of Jeeps in 1941 and the vehicle proved instrumental in the successful outcome of the war for the Allies. In the years since, it has proved popular with civilians, spawning a long line of derivative vehicles. Now, once again, the Jeep is returning to military use.

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Posted On: September 22, 2007

Lemon Law Perspective: a comparison of Chevrolet's Aveo and Tata Motors Ltd's really cheap car

The 2008 Chevrolet Aveo has an EPA estimated rating of 24/34. It has a 1.6L 103 horsepower engine which gets you from 0 to 60 in a whiplash inducing 10.8 seconds. Standard equipment includes air conditioning (A/C). This vehicle can be yours for only $9,995 (base MSRP). Or -- if you haggle -- perhaps for a bit less. In the Houston and Austin area, that’s about all the new car you are going to get for under $10,000 (with the exception of arguably the Kia Rio). At minimum, the Aveo will be covered under the Texas lemon law in the event that there is a problem with its manufacturing.

But, cheaper cars are being produced.

Recently, Tata Motors Ltd. of Mumbai India announced that it would soon unveil a new car that would cost $2,472.18 (100,000 Rupees, as of 9/18/07). No name has been revealed yet. These will be manufactured at a plant in West Bengal.

This car is to have an engine with a displacement of .6L, generating 33 horsepower. Before you run and break open your piggy bank to see if you have enough pennies to buy one of these, be warned, this car will not conform to European safety and emissions requirements and is unlikely to meet US safety standards either. (Tata does claim that it will pass a crash test, but just what test was not specified).

In the unlikely event that you did procure one in the US and found it to be defective, you might have some difficulty holding Tata Motors Ltd. to the same standards that you are to which you are entitled to under existing Texas lemon law, products liability law, and consumer warranty law. While Tata will soon have dealerships in Kenya and Nigeria, it seems it had not opened for business in the US yet.

If you have a new car that is a lemon and you are within the state of Texas, then you have several possible avenues to obtain recourse. If you are in India, I would be unable to help you, but here is a start – good luck!

Posted On: September 20, 2007

Jefferson County, Texas: Ford dealership sued over a lemon truck

Mike Stegall is suing Raiford Motors, an authorized Ford dealership, for selling him a lemon F50 pickup truck. According to the pleadings that was filed in the 136th Judicial District court, Stegall alleges that the vehicle was subject to repairs for at least 10 times since it was purchased. It appears that the case is currently pending in Judge Milton Shuffield's courtroom.

Stegall's causes of action stems from both the Texas Lemon Law and the Texas Deceptive Trade Practices Act (DTPA). Stegall is asking the court to award him damages in the cost of the truck, damages under the DTPA, and court costs.

To learn more about the suit, go here. If you are in a similar situation as Mr. Stegall, then feel free to contact my Texas lemon law office for a free case review.

Posted On: September 16, 2007

Warranties and expectations on consumer products

Today I am going to do something a little different and talk about a recent personal experience with a consumer product – not a lemon car, not a big-ticket purchase, but an inexpensive electric toothbrush.

We use toothbrushes everyday and normally do not spend much time thinking about their design or history. We do not know when humans first started using tools to clean their teeth, but there is evidence of the use of “chewing sticks” by ancient Babylonians as far back as 3500 BC. The first appearance of such devices in literature is around 1600 BC in China. Following on this long history of oral hygiene, in 15th century China, boar’s hairs were fixed in bamboo to make the first toothbrush. The 19th century brought the mass production of the toothbrush in America, then modified in the 1930’s to include nylon bristles. The electric toothbrush made its appearance on the US markets in the 1960’s with continuing evolution up to the present day.

So, how does this tie in with my experience? A few months back, I saw a battery powered Crest Spin brush on sale at the grocery store in Lewisville, TX. I do not remember the exact price, but it was around $5. If you consider what electric and battery powered toothbrushes cost a few years ago (and even what expensive models go for today), this is incredibly inexpensive – especially since batteries are included.

After a month or two of use, the batteries died and I replaced them. Shortly thereafter, I noticed a loss of powered and checked the battery compartment. I found that, despite having a gasket, water had leaked into the compartment and a battery had corroded a bit as well as one of the contacts.

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Posted On: September 12, 2007

Comparative costs on speeding in Texas, Virginia, and Finland

Regardless of what sort of vehicle we have, whether it is new or old, a great car or a lemon, most of us speed. Some of the time we go with the traffic flow, a few miles an hour over the speed limit and occasionally zip around considerably faster. It is almost inevitable that eventually we get pulled over for speeding and may get a ticket. Here in Dallas and the surrounding Fort Worth and Arlington areas, these tend to be for a few hundred dollars.

There are a few places where this behavior is much costlier. Back in July, the state of Virginia implemented a new law which dramatically increases what offenders will be assessed for many traffic infractions. This new “civil remedial fee” dwarfs the normal penalty. For example, going 20 mph over the speed limit is considered “reckless driving” and carries a $1000 civil penalty in addition to the regular fine. Other examples are a $300 fee for failing to stop at a stop sign, and a $300 fee if an in car DVD player is playing a movie and an “obscene video image” is seen from outside the vehicle. The state expects to raise between $65-$120 million.

In the case of Virginia, the state legislature is trying to fill the state’s coffers from the pockets of drivers. In contrast, the Finnish system for penalizing misbehaving drivers can result in even bigger fines, - recently a wealthy internet entrepreneur was fined $71,400 for driving 43 mph in a 25 mph zone - but the rationale is very different. In Finland, the idea is that a penalty should impact everyone equally.

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Posted On: September 11, 2007

Are used or preowned lemon cars covered under the Texas Lemon Law?

As a lemon law practice in Dallas, Texas, my office receive calls from potential clients with used or pre-owned lemon cars very often. The first question asked is whether the Texas lemon law applies to pre-own or used car cases. Unfortunately, the short answer to that question is that, generally, the Texas lemon law does not include used vehicles.

One exception to this rule is if the preowned vehicle is still covered under the car manufacturer's existing warranty (and not the extended warranty), then the Texas Lemon Law "may" be used to force the manufacturer to repair the problem.

Specifically, section 2301.602 of the Texas Occupations Code dealing with the Regulation of Motor Vehicles and Transportation (better known as the "Texas Lemon Law"), only refers to "new motor vehicle(s)."

Therefore, it is of utmost importance to protect yourself before you make a used car purchase. I always recommend that a purchaser of a used car do some homework before visiting the used car lot or used car seller. Run car history reports from multiple vehicle history service report providers, instead of just one provider. Often times, information from one provider may be incomplete and may not include information that you would want to know about the vehicle. Some examples of vehicle history report providers are AutoCheck and CarFax.

In the event that you are an owner of a used lemon car and the Texas Lemon Law does not protect you, there may be other laws such as the Texas Deceptive Trade Practices Act that may help you with your situation.

Posted On: September 7, 2007

Fuel Efficiency Ratings -- possible lemon law issue?

Recently, a concerned consumer in Houston, Texas contacted my law office about a new truck he had recently purchased. He was concerned that his vehicle might be a lemon because he had never been able to obtain the mileage that was shown on the information sticker when he purchased it. He wanted to know if there was any recourse under the state (Texas) lemon laws or fraud statutes because his vehicle appeared to fail to live up to the advertised specifications.

Without determining the strength or validity of any possible legal claims arising from this situation, lets take a few minutes to look at how those fuel efficiency numbers are obtained and why they are there.

The Environmental Protection Agency (EPA), part of the federal government, requires that car manufactures test vehicles to determine their fuel consumption rate. Not every car produced is tested -- only a representative vehicle for the specific model. Typically the vehicle tested is a prototype -- before production is started. Some very large vehicles (as well as motorcycles) are currently exempt.

Vehicles are tested during simulated driving in a laboratory environment. The car is placed on a dynamometer (rollers under the wheels). The force needed to turn the dynamometer can be varied, thereby simulating different environmental conditions (e.g. headwind, uphill etc). While the car is on the dynamometer, the exhaust from the engine is collected and the amount of carbon emitted is measured. This amount is used to calculate the amount of fuel that is being consumed. The car is “driven” through a series of “courses” that are designed to mimic different types of driving conditions. Examples of the routes can be found at the Fuel Economy site.

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Posted On: September 5, 2007

Economic benefits of keeping a non-lemon car for a long time

Having a reliable vehicle to commute in the Dallas and Fort Worth area is essential. If you purchase a new car and it is defective, you may seek recourse under Lemon Laws or product warranty laws. However, the normal hope is that your new car will be perfect and last for years. Some people like to trade their car in every couple of years, but those who maintain their cars can save a great deal of money.

Consumer Reports writes that owners who keep their car for 15 years or 225,000 miles may save $31,000 compared to an owner who trades their car in every 5 years. Using the example of a Honda Civic and taking into account depreciation, taxes, fees, and insurance, an owner holding on to the car for 15 years would save $20,500. In addition to these savings, our hypothetical owner could make $10,300 by investing the money that would have been spent on new cars.

Consumer Reports also compiled a list of cars that are more likely to make it to 200,000 miles. Included in this list are many cars by Honda and Toyota (included are: Civic, Lexus ES, Lexus LS, Toyota 4Runner, Toyota Highlander, Toyota Land Cruiser). It also published a list of vehicles that were not such good bets to make it to 200K threshold. These included such popular (and pricey!) vehicles as the V8-powered Mercedes-Benz M-class, Mercedes-Benz SL, BMW 7-series, Infiniti QX56, Jaguar X-type, V8-powered Volkswagen Touareg, and the V6-powered Volvo XC90.

Proper maintenance and care can help increase your car’s lifespan and protect your financial investment in it. Read your owner’s manuals and maintenance guide. Change your oil regularly and make repairs when parts do fail. Of course, if you bought a new car in Texas, have multiple failures within the first two years or 24,000, then you may have a lemon.

Posted On: September 3, 2007

Dallas, TX: How-to prepare for your Better Business Bureau (BBB) Lemon Law Arbitration Hearing

In Texas, most car manufacturers participate in the Better Business Bureau (BBB) Lemon Law Arbitration program. Because this arbitration program does not award consumer attorney fees, a car owner may often find himself/herself going through the arbitration process on his or her own. If this is your situation, then below are some helpful suggestions on how to win your lemon law arbitration hearing.

* Please note that the information below and on this website are not legal advice. Contact a lemon law attorney for information that is specific to your situation. These suggestions are based on my experience with the BBB lemon law arbitration program here in Dallas, other locations may vary. If you are in Dallas or anywhere in Texas, then feel free to contact my office.

Tip number 1: Take a deep breathe. Most arbitrations are less formal than a trial. The arbitrator understands that this will be your first time.

Tip number 2: Bring the lemon vehicle to the hearing. The arbitrator will most likely want to test drive it to verify the problems with the vehicle. Make sure that the vehicle is clean so that the arbitrator does not get the impression that you are not following all maintenance schedules for the vehicle.

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