THE GOODS : Pushing for a ‘Lemon Law’ With More Bite
Automobile quality has increased so much in the last 10 years that many buyers mistakenly believe that they no longer have to worry about getting stuck with a lemon.
In fact, thousands of new cars sold in California each year are the subject of arbitration. An unknown number of additional cases end up in various courts.
This summer, consumer advocates are fighting to strengthen California’s “lemon law,” which is widely regarded by consumer organizations as among the weakest in the nation.
Under California law, auto makers can offer arbitration to dissatisfied motorists, but some of these arbitration programs do not meet state guidelines.
A recent study by the California Public Interest Research Group showed marked discrepancies in the records of those auto makers that do offer certified arbitration.
Saturn far outperformed all other makes, having just one arbitration complaint for every 2,623 cars sold in 1993. Volkswagen had the worst record with one dispute for every 37 vehicles sold.
In rising order of complaints per car sold in California, the others were Infiniti, Lexus, Nissan, Toyota, General Motors, Chrysler, Ford and Isuzu.
Honda, Acura and Hyundai have uncertified arbitration programs, while BMW, Mazda, Mercedes, Mitsubishi, Subaru and Suzuki have no programs at all.
Moreover, when California car owners do file for arbitration, they are likely to fare worse than motorists in other states. Just 25% of arbitration complaints led to a refund or replacement in California, compared to 48% in New York, 50% in Florida and 64% in Washington, according to a study by Motor Voters, a Sacramento consumer group.
Assemblywoman Jackie Speier (D-Burlingame) introduced a bill in the California Assembly this year that would mandate a state-run arbitration program covering all car makers, financed by a $3 tax on every new car sale.
The bill allows a motorist to arbitrate if a car maker was unable to fix a defect after three attempts in the first 12 months, among other tough provisions.
The auto industry has been fighting the bill and may yet defeat it. Jane Lightfoot, an attorney for the American Automobile Manufacturers Assn., said auto makers do not oppose arbitration, but the Speier bill has provisions that “would be injurious to the industry.”
Lightfoot expressed concern that the $3 tax is too high and auto makers would not get a fair chance to fix a problem before getting into arbitration.
The Assembly passed the measure in June, but the bill faces stiff Senate opposition as the session draws to a close.