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Tuesday, October 14, 2008

Next time you buy a used car, don't get squeezed by a Tropical Storm Fay lemon

When Tropical Storm Fay blew through town in August, some of the more striking images were of cars and trucks half-submerged in murky floodwaters.

Dozens of local vehicles were among the 100,000 cars damaged nationwide by Fay, said Chris Basso, spokesman for Carfax, provider of vehicle histories.

Such vehicles suffer from electrical problems and malfunctioning antilock brakes and airbags. Still, more than half will be resold to unwitting consumers, often after being refurbished and moved across state lines, Basso said.

"They're called gray-market cars," said Paul Mattfield, owner of Indian River Insurance Agency in Fellsmere. "They've been in accidents, but they don't look like they've been in accidents."

In most states, including Florida, a salvage title is reissued on the car to indicate flood damage. But variations in state title law and lack of communication between state agencies creates loopholes.

Title history can be erased by title-washing, when an individual moves the car to a state that doesn't recognize the title. When that state reissues the auto title, the damage often goes unrecorded. Another common technique is VIN cloning, when an individual swaps the car's vehicle information number with that of an undamaged car in another state.

State lemon laws do not cover used cars, and buyers have little recourse if they discover flood damage after the fact.

"If you purchase a car 'as is,' then you're kind of out of luck," said Stuart-based attorney Lee Feinberg. "There's nothing you can do about it unless you can show (the dealer) knew something was wrong with the vehicle — it's tough to prove."

Experienced car dealers say, however, it's almost impossible to erase all signs of the original VIN number, but you must know where to look.

"The VIN number — that's your thumbprint," said John Morello, general manager for City Cars in Fort Pierce. "It's on the fender; it's on the motor."

In September, a federal judge in California imposed a six-month deadline on the government to enforce a law Congress passed in 1992. Under the ruling, insurance companies, salvage yards and junkyards will be required to report totaled vehicles to a national database.

For now, experts recommend having a mechanic check the car for rust, discoloration and other signs of water damage.

"You can't cover it up," said Hoyt Roberts, president of Stuart-based used car dealer Good Rides Inc. "You can put all the perfume stuff you want; it's still going to have a musty smell."


Wednesday, October 8, 2008

Lawmakers should review Lemon Law

Fran Fontanez and his wife bought their dream car at a Skowhegan dealer in 2006. A 2003 Saab 9-3 with 23,000 miles on the odometer, it had heated leather seats and was a $17,000 "extravagance" that Fontanez and his wife could finally afford.

Now, the car sits, idle, in the Fontanez garage. After 17 visits to the repair shop and almost $10,000 in work that was covered under the warranty, the car engine kicked the bucket and no longer runs. When the engine died at 44,000 miles, the warranty no longer applied and the Skowhegan dealer, Cold Brook Saab, wouldn't take the car back.

It turns out, the fancy Saab was a lemon. It was branded a lemon in California, where the law required that dud cars must be bought back by manufacturers. While Fontanez knew that the car was a "buyback," he didn't know that Saab had re-acquired the car.

That's because Maine law -- unlike a number of other states -- doesn't require that disclosure on cars that come in from other states. Maine law does require that cars that are declared lemons in Maine and are resold in the state must disclose that fact.

"Lemon buybacks" are a problem across the country. While some states, such as Minnesota and California, require a car title be branded with the label "lemon" once it's re-acquired by the manufacturer, that doesn't prevent manufacturers from reselling those cars to dealers in other states that don't have such labeling laws.

Manufacturers may claim that they've fixed the problems with the lemons they're reselling -- but given that those cars have been deemed lemons because those problems couldn't be fixed, that's a stretch. And at the very least, if those cars have, indeed, been fully repaired, it's still reasonable that prospective buyers should be informed about the full history of the vehicle they want to buy.

State Sen. Joseph Brannigan, D-Cumberland, the lead sponsor of Maine's original lemon law, has just this week, in response to the Fontanez situation, asked Attorney General Steven Rowe to draft legislation requiring disclosure for lemons from out of state that are resold in Maine.

Brannigan's fellow lawmakers should seriously consider this proposal and determine whether it offers an appropriate level of protection for consumers.

In the meantime, consumer experts say there are steps prospective used-car buyers can take to learn about a car's history.

Before you buy a used car, take advantage of services like CARFAX, which will help you research the general history of the vehicle. Be careful about late-model used cars with low mileage that are being sold as "demonstrator" or "executive cars" because that's one way lemons may be sold. And if you do purchase a car with a murky background, make sure you fully understand the warranty that comes with it, if there is one.

And finally, it's the rare car dealer who is disreputable. But that doesn't let you, the buyer, off the hook for doing your homework.

Source: Kennebec Journal, ME - Sep 23, 2008
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