Owners Not In on Secret Warranties
California’s new secret warranty act, intended to provide added protection for automobile owners, has been in effect since January, but the results so far have been less than impressive.
Few consumers understand the law--and even the agency administering the law in Sacramento appears to be confused about exactly what legislators intended.
The law addresses the practice of auto makers who create secret warranties or goodwill adjustment programs to fix defects--but extend them only to motorists who complain about those problems.
Consumers who have their cars serviced at independent garages or whose dealers are poorly informed about the warranties are out of luck and typically pay full freight to have factory defects fixed.
California became the fourth state to enact a law requiring written disclosure of these secret warranties to automobile owners and to the state government.
Under the law, auto makers must also post notices in dealer showrooms disclosing to consumers how they can obtain service bulletins that contain information about defects, special repair procedures and extended secret warranties.
But consumer advocates contend that California’s law lacks teeth. The law contains no penalties for auto makers or dealers who violate it and does not specifically allow consumers to sue companies that fail to disclose secret warranties.
Auto makers have long asserted that they do not have secret warranties, but rather have policies that give dealers flexibility in satisfying customer concerns.
“We feel there is no such thing as a secret warranty,” Ford spokesman Bill Carroll said. “We call them adjustments.”
Major dealer groups contacted declined to comment on the issue.
Clarence Ditlow, director of the Center for Auto Safety, said legislators watered down the law after manufacturers and dealers lobbied against enforcement provisions. Ditlow said laws in Wisconsin, Virginia and Connecticut are all tougher than California’s.
Under the new law, auto makers must file notices of secret warranties with the California New Motor Vehicle Board, a Sacramento agency with 12 employees.
Audrey Bemoski, manager for administrative and consumer services at the board, said the Legislature never consulted the board prior to voting on the new law and provided no funding for the agency to administer the program.
Bemoski said that since Jan. 1, only Suzuki has filed a notice and that the board has not received any public inquiries.
The New Motor Vehicle Board also is operating under the assumption that the new California law applies only to safety and emissions defects. But a staffer for state Sen. Herschel Rosenthal (D-Los Angeles), the act’s author, said the law covers everything but safety and emissions defects, because those two areas are covered under existing federal law.
Rosenthal’s staffer acknowledged that some key provisions in the new law were dropped after vigorous industry lobbying, including a requirement for dealers to provide consumers with copies of service bulletins.
Now, the law only requires dealers post notices that tell consumers they can obtain the bulletins from the National Highway Traffic Safety Administration.
The New Motor Vehicle Board can be reached at (916) 445-1888. The Center for Auto Safety can help motorists obtain some service bulletins by mail. Send a stamped self-addressed envelope to the center at 2001 S St. NW, Washington, D.C. 20009-1160.
