Lemon Law

Lemon Law

Lemon owners get a reprieve

If the car you buy is a dud, you may qualify for a refund or replacement, that’s what the lemon law says!

Your car is only a year old but it won’t start on rainy days. It stalls if you drive it for over an hour and has windshield wipers that swing into action with no human intervention. What is a lemon-owner to do about such luck?

All states now have passed “lemon law”, and although each state’s law varies, most agree on one point: If a car has to be taken to the shop for the same repair four times, it’s a lemon.

Depending on where you live, that may entitle you to ask the manufacturer for a refund or replacement, In some cases you may have to pay a fee for using the car, but that fee should only apply to the mileage driven until the first repair attempts, according to the Center for Auto Safety, a consumer watchdog organization in Washington, D.C.

To make sure you cant take advantage of the lemon law in your state, it is crucial that you keep good records of car repairs and can show that you have tried to fix the same problem at least four times unsuccessfully.

You’ll need records documenting when the car was taken in to the repair shop, the mechanical problems involved, and the repairs made, including which parts were replaced and how much labor was required. When writing a car maker, enclose copies of your shop repair orders, which should provide much of the necessary information.

If the manufacturer refuses to give you a refund or a replacement car even though you qualify under your state lemon law, you may have to consider legal action. You can get a lemon lawyer referral by writing to Lemon Lawyers of your state.

Halicarnassus Pyramide. New York. Photo by Elena

When Leasing Makes Sense

Auto leasing is a cheap way to drive an expensive vehicle

Leasing a car can be a smooth ride if you map out your route in advance.

What is the difference between buying and leasing a car? – When you lease a car, you have no obligation for the car when you reach the end of the lease term on the closed-end lease (if you have observed the mileage and wear-and-tear restrictions). You have a guaranteed trade-in value equal to the end-of-term lease balance, and if you want to keep the car, you can exercise your purchase option. When you buy a car, there is no guaranteed trade-in-value any time you want to terminate the loan and trade in the car.

What are the advantages to leasing a car? – Leasing has become attractive to people who understand the benefits of cash conservation and guaranteed trade-in value. Leasing traditionally requires no down payment, though some special manufacturer-lease programs require 5 to 10 percent down to get the financial terms being offered. Leasing has much lower payments than financing because the consumer only pays for depreciation, or the portion of the vehicle expected to be used up, rather than for the total price of the vehicle. The higher the down payment on the lease, the lower the monthly payment. The guaranteed value means the customer can walk away from the vehicle when the lease is up without obligation even if the vehicle is worth less than projected.

Another benefit of leasing is deferring the purchase decision until after you’ve driven the vehicle for a while. Even consumers who think they want to keep the vehicle for 10 years are better off leasing it for three to five years first, then deciding whether or not they want to keep it for the full ten years.

Why are people hesitant to lease a car? – Leasing can be very confusing. Unfamiliar words, lengthy technical contracts, and manipulative sales techniques can make shopping for a lease more difficult than shopping for a car. With no capitalized cost disclosure (which is analogous to the selling price in a purchase) and no annual percentage rate (APR) disclosure, it’s difficult to be comfortable that you’ve gotten a good deal. Also, some consumers have misunderstood or ignored their responsibilities or the economic reality of the lease.

What are some of those responsibilities and economic realities?

For example, if consumers put down $1,000 less and pay $50 to $75 a month less on a five-year lease than a five year-loan, they can’t expect to have the same lease balance after three years as they would have had on the loan.

Some lessees plan to terminate early when the structure of the lease is intended to avoid building equity. If lessees pay for 15,000 miles per year and drive 25,000, they can’t expect to drop the car off with no obligation – if they had purchased the car, its trade-in value would certainly be lower because of the extra mileage. The same is true in cases of excess wear and tear.

Finally, as in any business there are some unscrupulous lessors who try to take advantage of customers.Excessive charges for early termination and wear and tear are the two biggest areas of abuse. One or two bad apples can create a lot of negative publicity.

How can I make sure that I’m getting a good deal? Negotiate the purchase price first. Get it in writing. Then negotiate the lease and get a statement of the capitalized cost in writing. If the dealer of independent leasing company says they don’t know what the capitalized cost is or that there isn’t one, take your business elsewhere. Shop around and talk to a number of lessors. Compare rates and terms before making a decision. When you’re ready to lease, don’t agree to a longer term than you reasonably expect to keep the vehicle. Don’t choose a car so expensive that you won’t be able to pay for the early termination if you need to.

And make sure you’re comfortable with the vehicle. A great lease on a car you don’t really want is not a good deal.