April 26, 2008

Smart ForTwo Car Has Safety and Mechanical Issues

The Smart ForTwo car is now being sold in by Mercedes-Benz dealers. The tiny car has met with mixed reviews. After the driver's door opened during a side-impact test, the U.S. federal safety agency opened an investigation. The investigation followed a New York Times blog post that includes a video of a Smart car hitting a barrier at 70 mph. The car remained intact, but a door popped open (www.wheels.blogs.nytimes.com/2008/04/04/smart-crash test/). smart-fortwo-red.jpg

Separately, in early April 2008, an Automotive News reviewer said the Smart 1.0 liter, 70 hp three-cylinder engine had poor acceleration, the five-speed automated manual transmission makes the car rock back and forth as the driver shifts gears, and on the highway the driver must constantly tug the steering wheel left or right to keep going straight.On the other hand, they are exceedingly easy to park!

February 19, 2008

Car Dealers Are Taking Away Your Right to Sue

Car dealers in California increasingly have arbitration clauses buried in their sales contracts that preclude buyers from going to court. Under these clauses, any disputes are channeled to arbitration forums, principally the National Arbitration Forum (NAF) and the arbitrator's findings are binding. If the consumer loses, he or she cannot reject the award and go to court. This system is not to be confused with such organizations as the Better Business Bureau that provides arbitration in lemon law cases. Under the BBB rules, if the consumer does not like the results, he or she may still file a lawsuit. In that way, the consumer does not give up the right to hire a lawyer and have the case heard by a jury.678901_contract_2.jpg


That consumers who sign the contracts with binding arbitration clauses unwittingly are foregoing their right to a jury trial is bad enough, but the NAF and similar arbitration forums are, to put it mildly, unfair to consumers. A California law requires these forums to information on who wins these proceedings. The nonprofit group Public Citizen analyzed the NAF data and found that California consumers lost 94% of some 19,000 cases! One arbitrator handled 68 cases in a single day. There is no in-person hearing. Arbitrators who rule for consumers are soon dropped by NAF.

Consumer horror stories involving NAF are common. Mother Jones magazine covered this story in some depth in an article in November 2007.

Other arbitration forums such as the American Arbitration Association are almost as bad for consumers as NAF. Taking a dispute to AAA is quite expensive (especially when it comes to paying the arbitrator). The arbitrators favor the big corporations knowing they won't be chosen for future arbitrations (more fees) if they rule for the consumers.

The car dealers want no part of arbitration when it comes to fighting with the manufacturers over their franchise rights. In 2002, the dealers succeeded in getting Congress to enact a law banning binding arbitration clauses in the dealers' sales and service contracts with the auto manufacturers!

October 24, 2007

Best Web Sites on Green Cars & Fuel Economy

The New York Times has selected the best websites that provide accurate information on green cars--hybrid and electric. The sites are treehugger.com that provides a survey of the green car landscape, priuschat.com that covers the Prius, pluginamerica.com that is an organizing site for electric car advocates, hybridcars.com that covers all hybrids, greencarcongress.com is an in-depth discussion of green car technology, gm-volt.com that covers GM's promised hybrid, and autobloggreen.com which is a AOL site that has general information on green cars.

The Times also lists two sites that cover fuel economy. fueleconomy.gov is a site run by the EPA that has a tool to compute miles per gallon which you may compare with other cars. Cleanmpg.com has tips on how to maximum your fuel economy.

April 26, 2007

Bigger Cars with Stability Control Are Safest

A new report of driver deaths in auto accidents shows that bigger cars and those with stability control are safer. A new study by the Insurance Institute for Highway Safety published April 19, 2007, shows that the vehicles associated with the lowest death rates are the Chevrolet Astr, Infiniti G35, BMW 7 series, Toyota 4 Runner, Audi A4, Mercedes E & M class, and other larger vehicles. Nearly half of the 15 models with the lowest death rates were SUVs. Not one of the safest cars classified by the Institute were small cars.

Small and sporty cars dominated the list of models with the highest rate of driver deaths. Eleven of the 15 worst performing vehicles, like the Kia Rio and Chevrolet Cavailier, are small or mini.

All but three of the 15 best performing vehicles with the lowest death rate have stability control, a set of systems that helps avoid rollovers and can keep a vehicle from veering off the road. Stability control may save as many as 10,000 lives a year according to the Institute. Stability control is standard in 87% of the 2007 SUV's, 58% of passenger cars and just 8% of pickups. The federal safety agency has mandated that stability control be available in virtually all new vehicles by 2012.

The complete report is available on the Institute's website, www.iihs.org.

April 24, 2007

Hybrid Cars – Green Lemons Waiting to Ripen?

Full disclosure here: A hybrid just might be my next car. The local parking lot’s “green preferred” spot is nearly always filled with a Prius; my octogenarian aunt just bought a Honda hybrid; and my trendsetting friend Cathy tools around in a Lexus RX. My consumer research has begun. So let me just say, I hope the answer to the title question is, "No."

The history of the Prius reads like a classic modern case study in production and marketing: from government funded R&D under Clinton, to concept car, to prototype, to production version, to withdrawal of government hybrid funding under Bush, then to Internet promotion, and finally to a full scale American marketing campaign.

In our law practice, we have seen very few complaints of hybrid lemons to date. At the same time, our 25+ years handling consumer car cases inform us that most new make and model vehicles need a few years to work out the glitches in design and developing technology. Far from being a detriment to advances in technology, critical consumer feedback can serve the R&D process in a positive way. Toyota, for example, has issued “voluntary” recalls of thousands of Prius vehicles for possible steering shaft assembly problems, in response to numerous complaints. There are other reports of limited service campaigns in 2004-2006 Prius cars, for a variety of problems, although not involving all vehicles. The loudest grumbling appears to be from the fact that owners can't seem to achieve the 50-60 miles per gallon hybrid makers advertise. Let’s hope that Toyota and other manufacturers remain pro-active, eager to replace defective parts with out charge, and otherwise live up to their promises. If you feel they have not done so, we'd like to hear from you.


Since most hybrids are still under factory warranty today, their ultimate longevity remains to be seen. For example, the Prius has a 3 yr/36,000 basic warranty, and a 5 yr/60,000 mile powertrain warranty. The Honda Insight, which billed itself as the “original hybrid” is no longer sold as new, having been superceded by the Accord Hybrid and the Civic Hybrid. Honda advertises the same warranties as Toyota, while noting that the battery has an 8 year, 80,000 mile warranty. That is, frankly, a remarkable promise.

We are keeping our fingers crossed that this new technology will prove effective in reducing defective vehicles while reducing greenhouse gas emissions. And we hope that the new hybrids are not green lemons waiting to ripen. Meanwhile, there are many things all consumers can do to be more environmentally conscious, whether or not we drive hybrid cars and trucks.

The State of Michigan , which has a lot at stake here, offers the following “20 tips for Energy Efficient Driving” :

1. Combine trips for shopping and errands.
2. Avoid unnecessary trips. Use the telephone or e-mail to communicate.
3. For short trips, walk or ride a bike.
4. Join a carpool or use public transit to and from work or school.
5. Don’t idle the car for more than one minute
6. Drive the speed limit, or below, for better mileage.
7. Overdrive gears improve the fuel economy of your car during highway driving.
8. Avoid sudden bursts of speed, tailgating and pumping the accelerator pedal...
9. Out on the open highway, keep windows rolled up to reduce drag.
10. Using a vehicle’s air conditioner on a hot summer day can decrease mileage...
11. Travel during off-peak hours when possible.
12. Take the shortest route with the best roads.
13. Use the cruise control -- it can save fuel by maintaining a steady speed.
14. Keep tires at the recommended air pressure.
15. Keep your car engine properly tuned.
16. Remove bicycle and ski racks when not in use.
17. Excess weight uses more fuel. Remove unnecessary items...
18. Use the lowest octane gasoline recommended by the manufacturer.
19. When buying a new car, make fuel efficiency a priority.
20. Don’t buy a bigger engine than you need.


March 31, 2007

Are New Car Extended Warranties a Good Buy?

We have talked to many people who have purchased extended warranties for their cars, trucks and RVs. Extended warranties, which are really service contracts, fall into two categories--the good and the bad. The good are those products backed by manufacturers--the GM Protection Plan, the Ford ESP and EXP, the Chrysler Protection Plan and Toyota ExtraCare plan. The bad are all the rest--those plans backed by companies you have never heard of. These companies exist to deny claims. When your car needs an expensive repair, these companies will be sure to blame your lack of maintenance and see the problem as pre-existing your purchase of the vehicle which the fine print excludes from coverage. Plus, the extended warranties do not cover the parts of the car that most often fail--the electronics. Dealers love to sell these warranties because they are so profitable. Bottom line--we do not recommend any extended warranty unless backed by a manufacturer.

When shopping for any extended warranty, the buyer should negotiate the price. There are no standard prices. Check the Internet for dealers offering the extended warranties at favorable prices.

Finally, it is important to know that extended warranties do not give the buyer lemon law rights. The California Supreme Court decided this issue a few years ago (Gavaldon v DaimlerChrysler).

July 1, 2006

Dealers Must Disclose Buyers' Credit Scores in Arranging Loans

Under the California Car Buyers Bill of Rights, when a car dealer arranges financing and obtains the buyer’s credit score (from Trans Union, Experian or Equifax), the dealer must now disclose the score to the buyer along with the range of credit scores used by the credit reporting agency. That way, the buyer can determine if he or she is getting a good deal on the interest rate the dealer is offering. The disclosure will help consumers make good choices in obtaining car loans.