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Thursday, September 04, 2008

Today marks the first of the guest articles from contributors whose specialties are in keeping with the philosophy of The Dunning Letter. Sergei Limberg has a history of advocating for consumers, as the following article illustrates.

Driving in Circles: Lemon Law and Extended Warranties

By Sergei Lemberg

For a long time now, Jack has done an enormous public service in the realm of consumer privacy and identity theft. Over at, my colleagues and I are working for consumers in a slightly different arena: lemon law.

All too often, consumers are victimized by car manufacturers when the automaker can’t or won’t fix a serious defect in a new car. We’re not talking about annoying problems like speakers that aren’t installed properly, but rather defects that make the vehicle unreliable or unsafe. Every state has what’s called a lemon law, meant to protect new car buyers from just these kinds of defects. Unfortunately, though, most people don’t understand their lemon law rights, or know how to go about preserving them.

Because each state’s lemon law is different, it’s easy for people to become confused. Generally speaking, though, most states cover new passenger vehicles that are intended for personal use. Typically, lemon laws dictate that, in order to be considered a “lemon,” a vehicle must have serious defects that occur within a certain time frame, such as during the first year or the first 12,000 miles – whichever comes first. There’s also a requirement that the vehicle has been taken in for a certain number of repairs (such as four times for the same problem) or has been out of service for a certain length of time (such as a cumulative total of 30 days). Often, there’s a requirement that the manufacturer has to be notified via certified mail and given one last opportunity to make the repairs. If the automaker can’t fix the problem, they’re required to give the consumer a refund or replacement vehicle.

This is the point where consumers need to make a lot of noise. Understandably, manufacturers don’t want to acknowledge that they have a lemon, and have legal teams that are dedicated to fighting lemon law claims. Often, they make people jump through hoops until the time limit for getting compensation expires, then walk away with smiles on their faces. If you think you have a lemon, you should contact a lemon law attorney after the second or third repair attempt. He or she can help guide you through the final steps that will legally establish your vehicle as a lemon. Because most lemon laws say that the manufacturer has to pay your attorney’s fees in a successful claim, representation shouldn’t cost you a dime.

But that’s only one of the ways that people are victimized in relation to their vehicles. The other is through extended warranty scams. The New York Times recently ran a great article on extended warranties, which basically said that about two-thirds of people end up paying more for the warranty than they save in costs associated with repairing their cars. It also pointed out that it’s best to avoid third-party extended warranties, as you’ll be out of luck if the company you purchase from goes out of business.

This issue of third-party warranties intersects with privacy issues, since extended car warranty companies buy lists of names and snooker them into buying meaningless warranties. Chances are, you’ve received pre-recorded calls, letters, or emails warning you that the warranty on your vehicle is about to run out and that you need to “act now” to protect yourself. Usually, the company bought your name from a list broker and is betting on your naivete to scam you into buying something you don’t need.

From a lemon law perspective, even legitimate extended warranties aren’t so great. They’re simply service contracts, so a manufacturer’s repeated failure to fix a problem is hardly ever actionable.

Sergei Lemberg, Esq., focuses his practice on Lemon Law, Consumer Fraud, Auto Warranty and Auto Injury litigation. He is licensed to practice in New York, Massachusetts, and Connecticut. He can be reached at: 1-877-77-LEMON (1-877-775-3666)or e-mail

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