California’s new temporary license tag law: for some car buyers, a nightmare on wheels

California car buyers face new headaches and hazards, thanks to a new law that took effect on January 1, 2019.  Some unlucky car buyers may end up losing their cars, and their jobs, or in prison — because someone else screwed up.

The new law requires car dealers to install temporary license tags that expire 90 days after consumers purchase a new or used car.

Until this year, dealers who sold cars without permanent plates taped a folded-up “report of sale” inside the back window, where the expiration date was difficult, or impossible, to read. The new temporary tags have prominent expiration dates and bar codes that make them easy for toll collectors, police, repossession companies, parking enforcement, and others to target, simply by scanning the tags with an inexpensive scanning tool.

In many other states, when you buy a car from a car dealer, the dealer must install permanent metal plates on your car before it leaves the lot. But in California, now dealers give you temporary tags, while you wait for the permanent plates to arrive.

Under California law, you must install the permanent plates as soon as you get them, or within that 90-day window. But here’s the catch:  if you don’t get the permanent plates on time, you can be pulled over by the police or Highway Patrol while you’re driving along and minding your own business, and ticketed for having expired tags — even if it’s not your fault.

You read that right. YOU are the one who suffers, even when it’s the car dealer, Department of Motor Vehicles (DMV), or “first line service provider” chosen by the car dealer who failed to send you the permanent plates on time.

After 90 days are up, you are suddenly subject to being pulled over and ticketed, or worse.  The penalties don’t fit the “crime,” especially since the license numbers on the temp tags are clearly visible for an extended period, and may be legible for many more months, making your car easy for law enforcement, toll collectors, or others to spot.

Temporary tags may cause tickets to skyrocket

What will happen in California, now that temporary tags make it ridiculously easy for police, repossession companies, and others to track cars and scan the tags, so they can target consumers stuck with expired tags?

Here’s what happened in a small village on Long Island, New York, when police started using scanners to track cars: “Since the scanners went live Nov. 2, they have been triggering an average of 700 alarms a day, mainly about cars on the road with expired or suspended registration stickers. Officers have impounded 500 vehicles. They’ve written more than 2,000 court summonses, mostly for minor violations.”

When that’s what happens in a small village, how many more car owners will be ticketed, lose their cars, or be hauled into court in California?  Fasten your seatbelts. We’re in for a rough ride.

In response to a recent Public Records Act request from Consumers for Auto Reliability and Safety, the California Highway Patrol provided data showing that from January 1, 2018 through December 31, 2018, the CHP impounded 54,442 vehicles. Those numbers are likely to skyrocket.  Plus police and parking enforcement in cities, towns, and rural areas will issue more tickets and add even more cars to the pool of impounded vehicles.

No warning

The DMV fails to have a system in place to warn consumers about the potentially serious consequences of having an expired temp tag, or to remind hapless car buyers when the deadline is near. In fact, DMV officials tout being pulled over on the freeway, with traffic zooming by, or on a remote, isolated rural road, as an appropriate, effective way to learn your temp tags have expired and you are entering the twisted Twilight Zone of attempting to deal with deadbeat dealers and the DMV.

Serious risks

For most motorists, at a minimum, traffic stops cause anxiety and delays. The tickets are also costly and can cause real hardship.  For some, they can be fatal. What starts out as a routine traffic stop may escalate and rapidly spiral out of control. Relatively trivial violations sometimes lead to violent death. Especially when drivers are African-American, Latino, or other persons of color, they face a higher degree of serious, potentially life-threatening risks. Remember Philando Castile? And Sandra Bland?  They lost their lives during traffic stops for minor violations. But California’s DMV and other state officials blithely dismiss concerns about the safety of motorists who are pulled over by police or the CHP just because they have expired tags.

A fix-it ticket you cannot fix

The DMV also scoffs at the notion that being ticketed can have devastating economic consequences.  According to the DMV, “The fine amount can differ depending in the county where a violation occurs. The fines range from $25 with proof of correction up to $197 without proof of correction.” That may not seem like much to a highly paid, high-level DMV executive, but for many families struggling to make ends meet, that can be a real hit.

As if that’s not bad enough, the DMV adds: “Drivers may receive multiple tickets if they delay making the correction.” Uh-oh.

For many car buyers, trying to get “proof of correction” from the DMV is an exercise in extreme frustration. A common scenario: a car dealer goes out of business without submitting the registration documents, leaving hundreds of consumers unable to get their permanent plates.  When that happens, it can take the DMV more than a year to sort things out.

Meanwhile, YOU are the one waiting in line at the DMV, pleading for help, and getting hit with tickets — over and over again, sometimes until your car is towed away and impounded. Then you get hit with hefty towing and impound fees. Catch 22: If you’re not the registered owner, even if you pay all the fees, you still cannot reclaim your car.

Bottom line: Those tickets can add up. Fast. Even if you are trying desperately to get things fixed. Get too many citations, and your car is impounded by the police or CHP.  For someone who needs their vehicle to keep their job, or take their disabled child for medical treatments, or get their kids to day care or school, losing a car because it was impounded can be a disaster.

Whose idea was this absurdly unjust system?

Assemblymember Kevin Mullin (D-San Mateo) authored this anti-consumer legislation (AB 516) at the behest of toll companies, car dealers, “service providers” chosen by car dealers, and police agencies.

In 2013, toll companies complained to Mullin that they were losing millions of dollars in revenue when scofflaws driving newly purchased cars with car dealer tags on them blew through toll booths without paying the tolls.  The car dealer tags typically trumpet the name of the dealership — like “Toyota of XXX” — but provide no identifying number so that toll operators can locate the drivers and collect.

The toll collectors convinced Mullin to carry a bill to require temp tags, to stop the scofflaws and increase their revenues. But the first version of Mullin’s legislation, introduced in 2014, failed to pass, because it was opposed by the California New Car Dealers Association.

The dealers view tags that display their names as a terrific way to advertise. Temp tags could interfere with their unique way of getting their names in front of more eyeballs, on the roads and in driveways.

To appease the car dealers, the next year Mullin added an increase in the so-called “document fee” and other fees that car dealers and their “service providers” are allowed to charge consumers.  He also allowed the dealers to include the name of their dealership on the temporary tags, for advertising purposes.

The toll company / car dealer legislation was opposed by non-profit pro-consumer and civil rights groups, who sought reasonable protections for car buyers who cannot get their vehicles registered, or get their permanent plates, through no fault of their own. Those groups and attorneys who represent victims of abusive car dealer / DMV practices cited numerous examples of totally innocent consumers who have been pulled over and ticketed, even before the new law was on the books.

Some victims were also threatened with arrest, or actually handcuffed and arrested. Some had their cars towed away and impounded. Then the DMV refused to allow them to get their cars out of impound, even if they paid all the tickets and the hefty impound fees, because they weren’t the registered owners.  All because a car dealer, “service provider,” or the DMV messed up or deliberately stalled handing over their permanent plates.

New law threatens to harm low-income consumers and communities of color

One of the civil rights non-profits opposed to Assemblymember Mullin’s legislation, the Lawyers Committee for Civil Rights of the Bay Area, wrote:

“LCCR recently published, in collaboration with other groups, a report entitled Not Just a Ferguson Problem: How Traffic Courts Drive Inequality in California, which shows the many ways that low-income California drivers, and particularly communities of color, are impacted by unfair laws that result in license suspensions and hefty fines, and that lead people into an endless cycle of debt and court involvement from which they cannot extricate themselves. Rather than reverse this trend, AB 516 would contribute to it.”

Read more:  Letter from Lawyers Committee for Civil Rights of the Bay Area

Making matters worse: In California. car dealers are not required to provide car buyers their permanent plates within 90 days.  In fact, California’s DMV actually allows car dealers to have the plates sent to themselves, instead of the car buyers. This is an open invitation for dealers to cheat their customers.

Adding insult to injury: the car buyers pay the car dealer for the permanent plates and the registration when they buy the car. But they have no control over when their car is registered, or when they get their plates. They are at the mercy of the car dealers, the dealers’  “service providers,” and the DMV.  But it’s the car buyers who are penalized if the plates are late, or never arrive.  Obviously, this insane “Catch-22” system is rife for abuse.

Looking for help from the DMV? Good luck with that.

In response to complaints about abuses, DMV officials shrug and dismiss them, claiming that when a ticket is issued, it is merely a “fix-it” ticket.  But here’s the hitch: you cannot get it fixed.  Hapless car buyers have spent countless hours waiting in lines at the DMV, going back over and over again, pleading to have their registrations completed, only to be told:

  • “Sorry, there’s nothing the DMV can do.”
  • “Sorry, it’s under investigation and we have no idea how long that will take. It might take years.”
  • Sorry, before you can get the registration, and your plates, you need to post a bond.
  • “Sorry, there’s a problem with the registration, and you need to work it out with the dealer.”
  • “Sorry, someone needs to pay off a lien, that costs thousands of dollars, before the dealer can get the title and complete the registration.”
  • “Sorry, you need to pay off all the parking and speeding tickets — issued to the former owner — first.”
  • “Sorry, you need to pay the DMV for past registrations that were overdue, including the penalties.”

Temporary Operating Permits Scarce, Unpredictable

Occasionally, the DMV  doles out a “Temporary Operating Permit” to a consumer caught in this bind, but according to an official with the California State Transportation Agency, the DMV has no standards for deciding who gets a permit, or how long it lasts, leaving it up to the office manager’s “discretion.”  That lends itself to discrimination, based on whatever the manager’s biases may be.

However, before you can get a “Temporary Operating Permit,” the official wrote that “one requirement is that the registration fees have been paid”  — by the dealer. Good luck with that. That’s the deadbeat who ripped you off and went belly up without paying the fees to the DMV, or the arrogant characters in the gleaming palatial new car dealership who hang up on you whenever you call to inquire about when you can drive again without fear of being pulled over at gunpoint.

Why can’t you get your car registered, or get your permanent plates on time?

Common situations that lead to this nightmare scenario:

  • Glitches at the DMV, like entering the wrong Vehicle Identification Number, or losing track of the registration documentation.

 

  • Dealers who sell used vehicles without having the title, often because the former owner still owed money when he or she traded in their car. Their lender has a lien on the title, until the loan is paid in full. Until the dealer has a clear title, they may not be able to register the car.

 

  • Dealers who have the permanent license plates sent to them, instead of to the consumer.  The dealer refuses to send them the plates, and instead demands extra money  — holding the plates for ransom.

 

  • Dealers or “first line service providers” chosen by the dealer and approved by the DMV who fail to send the permanent plates on time, or send them to the wrong address

Dealers holding plates for ransom

Last year, a bus driver in Los Angeles  bought a used car from an independent used car lot.  As usual, she paid for the permanent plates and the registration. Without telling her, the dealer chose to have the permanent plates sent to the dealership, instead of to her. Over 90 days later, she was still waiting for her plates.  One day, the police pulled her over and handed her a so-called “fix-it” ticket. She explained the situation, but the officer was unsympathetic.

She called the dealership. The dealer said he had her permanent plates. But he refused to give her the plates, unless she paid nearly $300 extra for them. The dealer refused to put his demand in writing, or to accept a check or credit card. He told her to bring cash.

She was infuriated, and considered filing a lawsuit.  But her resistance wore down, after she was pulled over and ticketed again, and again. The tickets cost her hundreds of dollars.  But even worse — If she didn’t get the plates soon, she faced being arrested and having her car towed and impounded.  She finally paid the dealer nearly $300 more for permanent plates she had already paid for, when she bought the car.

Even Kansas has better laws against such practices

Consumers in other states, like Kansas, have better protections against car dealers who jerk consumers around and withhold car titles. For example, car dealers in Kansas are required to provide car buyers with title to their cars within 60 days. If the dealer fails to comply with the law, the transactions are void and consumers are entitled to a full refund.

Read more: Wichita car lot hit with $140,000 fine over business practices

Who opposed AB 516?

Consumers for Auto Reliability and Safety

Consumer Federation of California

California Rural Legal Assistance Foundation

Lemon law / auto fraud attorney and Judge Pro-Tem Steven Simons

Lemon law / auto fraud attorney David Valdez

Lemon law / auto fraud attorney Greg Babbitt

Lemon law / auto fraud attorney Balam Latona

Lawyers Committee for Civil Rights of the Bay Area

Citizens United for a Responsible Budget (CURB)

Law firm of Kemnitzer, Barron & Krieg

Courage Campaign

News reports

News reports highlight car buyers’ nightmarish experiences with dealers who failed to complete their registrations, even though they had paid the dealers to handle the paperwork, and were dependent on them to do their jobs. Consumers for Auto Reliability and Safety alerted the news media about these cases:

ABC Channel 10 (San Diego): U.S. Military Veteran faces ordeal because of car dealer who failed to register his car

ABC Channel 30 (Fresno): Clovis car dealer leaves hundreds in limbo

NBC Bay Area (San Jose): Dealer can’t register car, woman wants refund

Roger Lanctot in LinkedIn: Car dealers making yo-yo’s out of legislators

 

San Francisco Chronicle Editorial calling for a “quick fix” to address “legitimate concerns” with Assemblymember Mullin’s legislation:

San Francisco Chronicle Editorial: “License plate bill needs a quick fix”

Change an expiration date, go to jail

Raising alarms among groups that oppose adding more laws that result in imprisonment for minor offenses — selectively criminalizing  low-income consumers and people of color — AB 516 would make altering just the expiration date on a temporary tag a wobbler/ felony offense, subjecting car buyers to a potential prison sentence of 2-3 years.

Imagine: you are a single mom with three kids. You have only one car. You keep being pulled over by the police and ticketed because you have not received your permanent plates. You take time from work and go to the DMV, waiting in line over and over again, to no avail. Each time, you lose desperately needed income.

If you are detained by the police one more time, making you late for work, you will lose your job. In your desperation, you take a magic marker and change just the expiration date on your temporary tags. You do NOT alter the number on the tags, so toll agencies and law enforcement officers can still readily identify the car, for toll collection or public safety purposes.  For this offense, you could be heavily fined, convicted of a FELONY, and sent to prison for 2- 3 years.

Law enforcement agrees: consumers should not be punished for the wrongs committed by car dealers or the DMV

Consumer groups and the California Police Officers Association worked together and drafted amendments to AB 516 that would have addressed the serious problems with the bill, and presented those to the author’s staff, at an in-person meeting. The amendments would have changed the bill so that:

  • When law enforcement officials detect that your car has a temporary tag with an expired date, they would have to check an existing law enforcement database, that they can already access electronically, to find out whether you were issued permanent plates. In a matter of seconds, they can tell. If the plates have not been sent to your address, you would not be pulled over or issued a citation.

 

  • It would be an infraction — not a wobbler / felony —  to alter just the expiration date on a single temporary tag, leaving the rest of the tag unaltered and readily traceable.

The California Police Officers Association, to its credit, expressed the sentiment that its members are not anxious to pull over and detain people who are already frustrated because they cannot get their permanent plates, so long as they properly display the temporary tags, and the car is readily identifiable for public safety purposes.

However, Assemblymember Mullin refused to accept those amendments. Instead, he added a “fig leaf” to the bill that would require consumers who have not received their permanent plates to prove their own innocence by obtaining a form from the DMV and showing it, if they are detained.

That may sound easy, but in reality, it’s just another Catch-22. The form cited in the bill requires that you sign, under penalty of perjury, that you are the “registered owner of record.” But that’s the problem. You are not the registered owner. The DMV has a history of rejecting car buyers’ attempts to fill out and submit those forms, unless their registration is already complete, and in their names. But that’s the problem. It’s up to the dealer to complete the registration.  Gotcha.

 

 

 

 

It IS against the law for car dealers to sell used cars with unrepaired safety recalls

Contrary to the spin from unscrupulous car dealers, and erroneous reports in the news, it is illegal for car dealers to sell dangerous used cars with unrepaired safety recalls. Injured or misled consumers and their surviving family members who sue dealers that engage in such reckless practices usually win confidential settlements. The dealers insist on confidentiality to cover up their illegal activity.The legal settlements also are a telltale sign that the dealers know perfectly well what they are doing is illegal.

So if you discover that a crooked car dealer sold you an unrepaired recalled used car, you should get expert legal advice and fight back.

Here’s the scoop: There is a FEDERAL law against car dealers selling recalled NEW cars. There is a FEDERAL law against car dealers with fleets of 35 or more rental cars from renting, selling, or loaning recalled rental cars.  But — while there is no FEDERAL law against car dealers selling recalled USED cars, if they do, they risk being held accountable under various STATE laws.

No less an authority than the U.S. Federal Trade Commission has noted:

“…state product safety, tort, and other consumer protection laws, provide important safeguards to consumers affected by defective cars.”

An attorney who advises auto dealers has also warned them that if they sell used recalled cars, they face serious sanctions under state laws. According to a report in Automotive News:

“There are theories of liability that plaintiff attorneys may attempt to attach to these vehicles, even if dealers are using good-faith efforts to identify potential open recalls,” says Shawn Mercer, a partner at Bass Sox Mercer, a Tallahassee, Fla., law firm that specializes in dealership franchise law. There is no federal law against selling a vehicle with an open recall. But “depending on the jurisdiction,” Mercer says, “potential liability can stem from violations of state laws or common law tort claims.”  (Emphasis added)

The article also cautions car dealers:

“Selling a vehicle with an undisclosed safety problem makes for dissatisfied customers and can have legal repercussions, even if the dealership was unaware of the recall.” (Emphasis added)

One legal case that stands out, making the point that state law prohibits dealers and other businesses from failing to exercise due care, or acting with negligence, is Houck vs. Enterprise.  Sisters Raechel and Jacqueline Houck were ages 20 and 24 when they visited their parents in Ojai, California.  On their way back home to Santa Cruz, they were killed by an unrepaired recalled rental car — a Chrysler PT Cruiser that caught on fire, and also lost steering.  They ended up colliding with an 18-wheeler semi-trailer truck.

Their parents sued Chrysler and Enterprise under state laws, for failing to exercise the common law duty of care, and for negligence, resulting in wrongful death.  Eventually, on the eve of trial, Enterprise admitted 100% liability — under state laws.  A jury awarded the Houcks $15 million in compensatory damages.

Years later, the President of the California New Car Dealers Association made the false claim that it wasn’t illegal for dealers to sell unrepaired recalled used cars. The Houcks’ attorneys wrote a scathing letter pointing out that violating state civil laws is illegal. The attorneys cited the unanimous jury decision in the Houcks’ favor, and also cited state laws against negligence and common law torts.

CARS worked closely with Cally Houck, Raechel and Jacqueline’s mother, to get a new federal law enacted to prohibit rental car companies or car dealers from renting, loaning, or selling unrepaired recalled cars. The battle lasted for years, with auto manufacturers and dealers actively opposing the bill, even after the rental car industry had dropped its opposition.  But eventually we won.

That victory means that not only do rental car companies remain liable under state laws, but they also face enforcement by the National Highway Traffic Safety Administration (NHTSA), the nation’s premier auto safety agency.

Thanks to the passage of the Raechel and Jacqueline Houck Safe Rental Car Act, NHTSA now has the authority to issue fines or take other action if a rental car company with a fleet of 35 or more vehicles violates the law — even if no one is injured or killed as a result.  Thus, the federal law works to help prevent more tragedies from happening.

CARS supports the ongoing efforts of Senators Blumenthal and Markey, and U.S. Representative Jan Schakowsky, to enact federal legislation to make it a violation of federal law, enforceable by NHTSA, for car dealers to sell unrepaired recalled used cars.

Meanwhile, victims of crooked dealers who play “recalled used car roulette” with their customers’ lives, should get legal advice and fight back, using existing state laws. It’s also important for state attorneys general to enforce the existing state laws against fraud, violations of express and implied warranties, and other provisions of law.

CARS applauds the District Attorney in Sedgwick County Kansas — one of the few law enforcement officials in the nation who is standing up to the powerful car dealer lobby in order to protect car buyers and others who share the roads.

Read More: The Wichita Eagle:  Wichita car lot hit with $140,000 fine over business practices

 

Trump throws military under car dealer bus

What is “GAP” insurance, and why would the Trump Administration seek to allow car dealers to gouge our nation’s military heroes and their families when they buy cars, by selling them high-priced “GAP” insurance that is often worthless?

According to car dealers, the purpose of GAP, or “Guaranteed Asset Protection” insurance, is to cover you if your car is stolen or totaled before you pay off the loan. The “GAP” is the difference between the amount of the loan and the worth of the car.

Anyway, that’s the shtick. But in reality, the main purpose of “GAP” — when it is sold at car dealerships, and added into the price of a car loan — is to line the pockets of greedy car dealers.  You can actually get a much better deal if you simply buy GAP protection from your own insurance company. Regular insurers usually charge as little as $20 or $30 to add GAP coverage to your existing policy.

However, car dealers often charge $1,000 or more. Plus when it is added into your loan, it can cost you far more than that, in added interest that goes to the lender, for the entire life of the loan.  Making matters worse, some dealers pocket the money for GAP and never even activate the policies. So if your car is stolen or totaled, you could be in for a rude awakening. Some dealers have scammed many customers this way, then left the state and declared bankruptcy, evading any legal liability.

It’s bad enough when car dealers cheat civilians this way. But according to National Public Radio (NPR), as reported by VOX,

“the Trump administration has also proposed changes that could open up service members to predatory practices when they buy cars. The administration has proposed easing restrictions on “gap insurance,” an add-on to car insurance that covers the difference between the amount a car owner owes on the car and the car’s actual cash value.

Gap insurance is typically available from regular insurance companies for a very low price, as little as $20 to $30 a year, but car dealers often mark it up by hundreds of dollars. Current rules effectively block auto dealers from tacking on overpriced gap insurance to military service members, but the administration has sent a proposal to the Defense Department looking to revise the rules. (If the proposal does eventually make it out of the Defense Department, it will ultimately require the approval of the Office of Management and Budget, which [Trump appointee Mick] Mulvaney also heads.”

As Americans, we all have a stake in protecting our military Servicemembers from scams like this.  Among other reasons — when they are cheated in this way, it increases the risk they may lose their security clearance, and their ability to perform their vitally important mission, of protecting our nation from enemies foreign and domestic.

Especially at a time when our nation faces unprecedented threats from enemies abroad and cyber-attacks from enemies who have penetrated our power grid and are messing with our elections, we cannot afford to lose the services of highly-trained military personnel, who are desperately needed to protect our nation.

Our nation’s military should not have to fight on this front, simply to preserve the protections they already have. They deserve a Commander in Chief who has their back, not one who is stabbing them in the back.

This is an update of a prior post, “Avoid GAP insurance rip-offs”

 

 

 

Why don’t consumers get safety recalls done? They’re afraid of car dealers.

Safety recall defects are dangerous, putting precious lives at risk. So why don’t consumers get safety recall repairs done?  Surveys show that a major reason is that many consumers are afraid of taking their car to a car dealer.

According to a report in the Detroit News:

“The big problem is that recalls depend upon the private vehicle owner to take the car to a dealer and get it fixed. In newer cars, that compliance rate is more than 80 percent, but when a car is five years old or older, the rate drops to around 44 percent, according to a new survey by ChecktoProtect.org which was founded by FCA (Fiat Chrysler Automobiles) and the nonprofit National Safety Council and announced June 22.

Surveys done by Autotrader.com show that a lot of car buyers don’t trust dealers to fix recall issues properly, and they also worry about the dealer charging them extra for non-recall repairs.”

Read more: Detroit News: “As vehicle recalls multiply, technology gets the blame”

 

Why don’t consumers get unsafe recalled cars fixed?

GM, Fiat Chrysler, Honda, the National Safety Council, the National Highway Traffic Safety Administration, mayors and other elected officials, are investing millions in an attempt to reach owners of older recalled cars and persuade them to take their vehicles to car dealers for recall repairs. They’re using advertisements, social media, even private investigators who track people and find out who owns vehicles that have repeatedly changed hands.

They are trying to impress on the owners that their safety is at stake, and driving without repairing the safety recalls is too risky. The biggest challenge: the millions of older vehicles with Takata airbags that are prone to exploding with excessive force, spewing shrapnel into the faces, necks, and chests of drivers and passengers, causing victims to bleed to death.

But the messages that consumers are getting from the auto industry are extremely mixed. The former Chairman of the National Automobile Dealers Association, Jeff Carlson, a Colorado car dealer, claims that “only 6 percent of recalls are ‘hazardous.'” Carlson and the NADA have been opposing federal legislation that would require dealers to fix all safety recall defects on used cars, prior to sale — in addition to the existing protections under state laws in all 50 states.

He claimed that “Such a move would ground millions of cars unnecessarily and diminish vehicle trade-in values.” That attitude is dangerous, reckless, and irresponsible, but it’s all too common in the car dealer world. By that nutty calculus, none of the following safety defects would be considered “hazardous” — brakes that fail, steering loss, sticking accelerator pedals, catching on fire, wheels that fall off, seat belts that fail in a crash, or a myriad of other safety defects that have claimed hundreds of lives and maimed thousands of people.

No wonder consumers are confused about whether it’s worth taking time off from work to take their car to a dealership that may be over 100 miles away, and where they may not get a loaner car, while their car sits waiting for repairs. Meanwhile, many consumers would be without their only means of transportation to get to work, and get their kids to school, or get to medical appointments.

Car dealers across the country have also been urging state legislatures to allow them to get away with selling unsafe, unrepaired recalled cars without repairing them first. What message does that send to the public about the importance of getting safety recall repairs? If the cars are so unsafe, they should be repaired first, right? Shouldn’t the car dealers, who are the professionals, set the right example? Of course they should.

It appears that the car dealers’ double standard is aimed more at forcing consumers to go to car dealerships for repairs, than at ensuring their safety. Once there, consumers are often subject to high-pressure tactics to sell their car and purchase a new one. Among the scams common at many car dealerships — refusing to return the car keys unless the consumer buys another car.

Recent complaints about car dealers posted on Quora: “I had my car keys taken at the dealership and was almost forced to purchase a car (refused to let me leave).”

Automotive News: Carlson vows to press NADA’s fight against regulation

Bottom line: Consumers should take safety recalls seriously. So should auto dealers. Car dealers need to do the right thing, comply with state laws, and stop selling unrepaired, defective recalled used cars — shifting the burden onto consumers. Auto manufacturers should offer roving repairs to consumers with unrepaired recalled cars where they work or at their homes. And the National Automobile Dealers Association should acknowledge publicly that of course all the cars with Takata airbags and other safety recall repairs are unsafe, and should be repaired immediately.

So what auto safety regulations will we lose?

President Trump has reportedly declared that he plans to get rid of 75% of federal regulations.  This is verrry scary stuff. Especially since states are prohibited from being able to act, to require auto manufacturers to build safety into their cars.  The states’ hands are tied. That means if we lose safety regulations in DC, nothing can be enacted in their place. No matter how bad the carnage gets.

So — which lifesaving auto safety regulations will Trump roll back? The one that requires seat belts to work in a crash? The one for fuel tank integrity, that requires cars to withstand a rear-end collision without exploding into flames?  The one that requires your car to offer a minimum level of side-impact protection for your head and torso if you are T-boned by a huge SUV that blows through an intersection, against the red light? The one that keeps SUVs from tipping over, killing drivers and passengers?

You have to wonder whether he, or anyone around him, has thought this through. What will happen to public confidence in the auto market when people realize that the cars they own now are actually safer than the newer ones, built under the anti-regulatory Trump regime?

What’s next? Autonomous cars a teenager can hack, or that could be controlled by Isis, Putin, or Kim Jong Un?

This is reminiscent of when GM, Chrysler, and Ford were so cocky about having the entire U.S. market to themselves. They sold huge numbers of atrocious lemon cars. They were lemons despite the fact the workers were doing their best. They were lemons by design. Worst of all, the auto manufacturers refused to stand behind them. They dismissed consumer complaints and stonewalled frustrated car owners.

The end result: car buyers revolted, all 50 states enacted lemon laws, and the auto import market was born, eventually overtaking the domestics by a mile, especially in markets like California.

GM, a former powerhouse, now has only a puny 9% of the California market. Its market share nationally has shrunken to just 17%.  People don’t forget easily, or quickly, when they have been sold a car that fails to meet reasonable expectations. Let alone one that kills.

Message to President Trump and the auto lobbyists:  Don’t delude yourselves. It can happen again. Markets can shift, and they can shrink. It’s entirely possible that Obama will be known for saving the American auto industry, and Trump for destroying it. Ultimately, it all depends on what millions of individual consumers, who value their lives and their families’ safety, decide.

Takata admits guilt. But who pays for cars with unsafe airbags?

Thanks to enforcement by the U.S. Department of Justice the Department of Transportation, and the FBI, airbag manufacturer Takata plead guilty to wire fraud and agreed to pay a total of $1 billion in criminal penalties. Why? Because the company had committed fraud, concealing dangerous defects in its airbag inflators, which have caused at least 11 deaths and approximately 180 injuries, including blindness and brain injuries, in the U.S.

According to the law enforcement agencies, Takata executives engaged in a cover-up that lasted for at least 15 years.

According to the DOJ, “Under the terms of the agreement, Takata will pay a total criminal penalty of $1 billion, including $975 million in restitution and a $25 million fine. Two restitution funds will be established: a $125 million fund for individuals who have been physically injured by Takata’s airbags and who have not already reached a settlement with the company, and a $850 million fund for airbag recall and replacement costs incurred by auto manufacturers who were victims of Takata’s fraud scheme. A court-appointed special master will oversee administration of the restitution funds.”

Sooo — if auto manufacturers are being compensated for losses associated with Takata’s fraud, why are they and their franchised dealers still selling cars with unsafe, unrepaired Takata airbags, which are being passed onto consumers at dealerships such as CarMax?

CarMax is notorious for selling cars with unrepaired safety recalls, including defective Takata airbags that are being recalled.  CarMax advertises that all its cars must pass a “rigorous inspection” in order to qualify to be sold as “CarMax Quality Certified” vehicles. But CarMax fails to get the safety recalls repaired.  Consumers who buy cars with dangerously defective Takata airbags from CarMax and other unscrupulous auto dealers may not realize that there is no way they can get their cars repaired for a long time, due to severe shortages of replacement airbags.

Read more: U.S. Department of Justice: Takata Agrees to Pay $1 Billion in Criminal Penalties for Airbag Scheme

 

Autonomous cars cause confusion, pose hazards

Auto manufacturers are rushing to be the first to sell cars that are semi-autonomous. But they have failed to invest in adequate training for sales personnel who can explain the features — and their limitations.

So what can go wrong?  Here’s one example: According to a recent report in Automotive News,  “As Donna Lee approached the intersection of Roberts Drive and Spalding Drive in Sandy Springs, Ga., the salesman in the passenger seat told her not to hit the brakes, even though two cars were stopped and waiting at the red light ahead.

According to court documents, Lee and Mercedes salesman Desmond Domingo have similar accounts of what happened next on the evening of May 10, 2014. The Distronic semiautonomous system in the Mercedes-Benz GL450, which Domingo believed would bring the car to a full stop, did not kick in as he expected. The Mercedes slammed into the car in front of it at around 40 mph, causing a chain reaction of crashes that left a 16-year-old driver with a concussion and significant damage to the cars involved.”

CARS has testified at forums regarding autonomous vehicles that they should not be offered for sale to the public until they are fully autonomous, and they have been proven safe through at least one year of real-life testing in all normal weather conditions, including heavy rain, fog, and snow. Otherwise, consumers who purchase the cars may end up stranded, or in collisions — particularly if they purchase the cars as used vehicles, and are not familiar with their limitations.

Read more:   Automotive News: Autonomous features ripe for misunderstanding

DO NOT drive these Honda cars. Get them fixed. NOW.

A 50-year-old Riverside, California woman was recently killed by a faulty, recalled airbag in her 2001 Honda Civic. Cutting corners on safety, airbag supplier Takata produced the airbag with cheap but volatile sodium nitrate.

In even a low-speed collision, the chemical explodes with excessive force, sending shards of metal into the passenger compartment. It’s been described as having a hand grenade go off in the car.

The woman, Delia Robles, was driving to get her flu shot when her Civic collided with a pickup truck. Officials at the National Highway Traffic Safety Administration (NHTSA) have been warning owners of the cars not to drive them, and to get them repaired immediately.  NHTSA found that in a collision where the airbags inflate, the odds of being killed are 50-50.  In other words, those cars are ticking time bombs.

Here are the cars that NHTSA has identified as posing the highest risk:

2001-2002 Honda Civic, 2001-2002 Honda Accord, 2002-2003 Acura TL, 2002 Honda CR-V, 2002 Honda Odyssey, 2003 Acura CL, 2003 Honda Pilot.

Honda is offering to tow these cars to dealerships for repairs. They should also offer to send roving mechanics to the owner’s home or workplace, since a leading barrier to getting repairs is the fact most people have only one car, and they depend on it to keep their job and get their kids to school. For many owners of recalled cars, the closest dealership may be a long distance away, and they may not be able to drop off their car on a weekday, and then get back home and back to work.

Owners of recalled cars may also have difficulty getting time off from work to drive a long distance for repairs. Many at-risk owners may not be proficient in English or Spanish, and may not understand the risks they face.

Some owners have also had bad experiences at car dealerships, and may be fearful of going to a dealership again. Unfortunately, some dealers may take advantage of the safety recalls to pressure them to buy another car, while holding their recalled car for repairs.

Where to check the safety recall status of your car, at a government website:

https://vinrcl.safercar.gov/vin/

If you own one of these recalled cars, here’s what CARS recommends:

Contact Honda directly.  Here is Honda’s toll-free number:  1-888-234-2138

Take Honda’s offer to provide you with a loaner or rental car,  and also have them tow your car to the dealership for the FREE repairs.

Read more:

CNN report: Stop driving these cars NOW.

Daily News report: Many Southern California cars have dangerous airbags

 

 

 

 

 

 

 

Can’t get your car registered? Stopped by Police? You are not alone.

According to the Associated Press, Minnesotan Philando Castile, who was shot and killed during an otherwise “routine” traffic stop, had been pulled over at least 52 times in recent years, in and around the Twin Cities, and cited for minor offenses. He had been assessed over $6500 in fines and fees, although many violations had been dismissed in court.

His tragic death is a stark and heartrending reminder of what can go horribly wrong when car drivers are pulled over by police. It should also raise serious, urgent questions about why some people are being pulled over at all.

Consumer and civil rights groups are raising alarms about a new law that was just enacted in California that will lead to many innocent people being pulled over by police, ticketed, having their cars impounded, and facing severe criminal sanctions. Why? Because car dealers failed to provide them with permanent license plates within the 90-day deadline for displaying permanent plates.

Governor Jerry Brown just signed the bill, AB 516, into law in the nation’s largest, most diverse state. It is now on track to take effect in January, 2019. So there is still time to change it before more innocent car buyers are harmed.

According to the Lawyers Committee for Civil Rights of the Bay Area, “LCCR recently published, in collaboration with other groups, a report entitled Not Just a Ferguson Problem: How Traffic Courts Drive Inequality in California, which shows the many ways that low-income California drivers, and particularly communities of color, are impacted by unfair laws that result in license suspensions and hefty fines, and that lead people into an endless cycle of debt and court involvement from which they cannot extricate themselves. Rather than reverse this trend, AB 516 would contribute to it.”

Here’s why this obvious injustice keeps happening, and how AB 516 would make it worse:

Under California’s current law, car buyers who purchase new or used cars without permanent metal license plates, at a car dealership, pay the dealer $29 for an “electronic vehicle registration or transfer charge” plus an $80  “document processing charge” to handle the registration. Sometimes they pay an additional $100 or more for a “registration /transfer/titling fee.” Then they drive off the car lot with a document that is folded up and taped in the back window that shows the date of sale and other relevant information. The dealer is supposed to handle the registration, and send them the permanent plates, either directly or by hiring a company approved by the DMV.

Car buyers must install permanent plates as soon as they receive them, or within 90 days. There are no exceptions. The law says they have to put them on the car before the 91st day — even if they have not received them, through no fault of their own. No plates? Tough. Hapless car buyers still face being pulled over, ticketed, and having their car impounded.

The kicker: There is NO requirement for dealers to ensure that car buyers receive their permanent plates within the 90 days. Some dealers take advantage of this major loophole in the law to abuse the system and increase their profits. As a result, this scenario plays out all too often:

You pay good money to buy a car from a car dealer. You drive it home. You paid cash, or if you got a car loan, you are making the payments, in full and on time. Life is good. Until….

You are pulled over by the police. Why? Because the temporary registration has expired, and you have not received the permanent plates. Why not? Because the dealer failed to submit the registration documents to the Department of Motor Vehicles.

As in, the dealer went out of business without paying the taxes he collected, or submitting documents to the DMV — some dealers do this to hundreds of people, then go belly up. OR —

  • The dealer entered the wrong Vehicle ID Number (VIN) into the system.
  • The dealer fired the person who handles vehicle registrations and hasn’t gotten around to hiring a replacement.
  • The dealer sold you a car that is registered in another state, which can take months to straighten out.
  • The dealer sold you a car with an unpaid lien, and the lender is demanding payment (which can run thousands of dollars) before it will release the title.
  • The dealer had the permanent plates sent to him, and not to you, so he can demand that you pay more, under threat of being pulled over again and again, and having your car impounded.
  • The DMV has a backlog in issuing permanent plates.
  • The DMV entered the wrong VIN.
  • Or — one of a myriad of other scenarios that are beyond your control.

None of that is your fault. You paid the fees for the dealer to properly register the car, when you bought it. It’s the dealer or the DMV who messed up. But who gets penalized? YOU.

According to consumer attorney Steven Simons, on July 19, 2014, Matthew Smith and his brother Luke bought a 2003 Acura for about $6900 (plus financing) from a dealership in Van Nuys, CA.  They paid the dealer the usual fees to handle the registration. But the dealer failed to follow through and do his job. Despite repeated attempts by the Smiths to get their car properly registered, and their fruitless attempts to get the DMV to assist them, to this day their Acura has not been properly registered, and they have not received their permanent plates. Meanwhile, police officers in several jurisdictions have repeatedly pulled Matthew over, including at gunpoint, and detained him for hours, searching him and his car.

Think this is wrong? We agree! Unfortunately, it’s going to get a lot worse, when AB 516 takes effect.

The author of AB 516 is Bay Area Assemblymember Kevin Mullin (D-San Mateo). The most avid backers are toll authorities, who want temporary tags to be mandated, so they will rake in more revenue. Currently, they lose money when people who don’t have readily traceable plates drive through unattended toll booths without paying.

The other major backers are the car dealers. They keep pushing aggressively to shorten the amount of time car buyers have to install permanent plates, or face criminal penalties. California car buyers used to have 6 months to install permanent plates. Then in 2011, car dealers persuaded legislators to cut the time in half, to 90 days. Recently, car dealers tried to get lawmakers to slice the deadline in half again, to just 45 days. That bill has temporarily stalled, pending enactment of AB 516. But dealers are expected to bring it back.

The author claims that the first ticket you would get is supposedly just a “fix-it” ticket. So what’s the big deal?  Here’s the catch: you cannot fix it. Typically, people caught in this trap call the dealer and the DMV over and over again, file complaints, and even go in person and spend hours at the DMV and dealership waiting around, and pleading with them. What they discover is that getting the registration completed, so they can drive legally, is out of their hands. It is an exercise in extreme frustration.

Sometimes it takes over a year to get things straightened out. By then, many people are pulled over repeatedly and ticketed, and their cars are impounded. Even if they pay all the tickets and the hefty impound fees, they cannot get their cars back because they are not the registered owners.

What happens to many hard-working consumers when their cars are impounded? They often lose their only means of transportation to work, and their jobs. Then they default on the car loan. Guess who swoops in to take back the car? The dealer. Then he turns around and resells the same car, over and over again, making a profit each time. You, on the other hand, get stuck with no car, a repossession that harms your credit for at least 7 years, harassing phone calls from the lender demanding immediate payment of the remaining car loan, and no job.

The bottom line: the bill will play right into the hands of unscrupulous car dealers, who want customers to give up and default on car loans, because they can make bigger profits from reselling the cars, and trashing people’s lives. According to a major series of reports by Ken Bensinger at the Los Angeles Times, some dealers in California engage in the practice of “churning” cars — reselling the same car over and over again — as a regular business practice.

The bill would also make it easier for unscrupulous dealers to engage in an illegal practice known as “yo-yo” financing, which is very common, even among supposedly reputable car dealers. When dealers “yo-yo” a consumer, they sell them a car, hand them the keys, and encourage them drive it away. Weeks later, they reel them back in,  telling them the “financing fell through.” Then threaten to have the consumer arrested for driving with an expired registration, or to report the vehicle as “stolen.” They exploit the fear of criminal sanctions to extract a larger down payment, higher interest rate, or other terms more favorable to the dealer. They refuse to return the down payment or the traded-in vehicle, leaving car buyers over a barrel.

If AB 516 is enacted, dealers will be required to install temporary tags. Good idea. We are in favor of law enforcement agencies being able to properly identify the car and the car buyer. But — the temporary tags will be highly visible, and will have an expiration date that is easy to spot — and easy for a scanning device to pinpoint. Suddenly, people with expired temporary tags will become ridiculously easy to target. Enforcement of that 90-day deadline, which tends to be relatively spotty now, will skyrocket.

Here’s what will happen, only a vastly larger scale: In a village on Long Island, New York, “Since the scanners went live Nov. 2, they have been triggering an average of 700 alarms a day, mainly about cars on the road with expired or suspended registration stickers. Officers have impounded 500 vehicles. They’ve written more than 2,000 court summonses, mostly for minor violations.”

Plus — AB 516 would make altering even just the expiration date on a temporary tag a wobbler/ felony offense, subjecting car buyers to a potential prison sentence of 2-3 years. Imagine: you keep being pulled over by the police because you have not received your permanent plates. If you are detained one more time, making you late for work, you will lose your job. In your desperation you take a magic marker and change the expiration date. For this “horrible crime,” you will be at risk of having to do hard time in prison. Even though you have not altered the number of the temporary tag, and toll agencies and law enforcement can readily identify the car, for toll collection or public safety purposes.

Consumer groups and the California Police Officers Association worked together and drafted amendments to AB 516 that would have addressed these serious problems with the bill, and presented those to the author’s staff, at an in-person meeting. The amendments would have changed the bill so that:

  • When law enforcement officials detect that your car has a temporary tag with an expired date, they would have to check an existing law enforcement database, that they can already access electronically, to find out whether you were issued permanent plates. In a matter of seconds, they can tell. If the plates have not been sent to your address, you would not be issued a citation.
  • It would be an infraction, not a wobbler / felony, to alter just the expiration date on the temporary tag, leaving the rest of the tag unaltered and readily traceable.

The California Police Officers Association, to its credit, expressed the sentiment that its members are not overly eager to pull over and detain people who are already frustrated because they cannot get their permanent plates, so long as they properly display the temporary tags, and the car is readily identifiable for public safety purposes.

However, Assemblymember Mullin refused to accept those amendments. Instead, he added a “fig leaf” to the bill that would require consumers who have not received their permanent plates to prove their own innocence by obtaining a form from the DMV and showing it, if they are detained. That may sound easy, but in reality, it’s just another Catch-22. The form cited in the bill requires that you sign, under penalty of perjury, that you are the “registered owner of record.” But that’s the problem. You are not the registered owner. That is why you didn’t receive your permanent plates. Gotcha.

Read more — letters opposing  AB 516:

Courage Campaign

Consumers for Auto Reliability and Safety

Consumer Federation of California

California Rural Legal Assistance Foundation

Lemon law / auto fraud attorney and Judge Pro-Tem Steven Simons

Lemon law / auto fraud attorney David Valdez

Lemon law / auto fraud attorney Greg Babbitt

Lemon law / auto fraud attorney Balam Latona

Lawyers Committee for Civil Rights of the Bay Area

Citizens United for a Responsible Budget (CURB)

Law firm of Kemnitzer, Barron & Krieg

 

 

 

 

 

 

 

 

 

 

Attacks on consumers mounting, over arbitration

In an amazingly lopsided editorial, the Albuquerque Journal published this hit piece, slamming the Consumer Financial Protection Bureau for its gutsy work to restore your ability to fight back in court, as a consumer, by joining forces with other consumers who have also been victimized by crooks who engage in illegal practices:

Albuquerque Journal editorial

Here’s the letter to the editor I sent them, in response. However, it won’t be too surprising if it doesn’t appear in print — for reasons you can readily guess:

Funny — this newspaper didn’t object when the car dealers got a special exemption from the Federal Arbitration Act, that allows them to sue anyone they please. Since then, they have sued auto manufacturers, the federal government, their customers, and each other, and somehow you are fine with that, but apparently think their customers do not deserve to have the same access to the courts.

When Congress restored the right to go to court, for car dealers, the National Automobile Dealers Association wrote to members of Congress and promised not to oppose restoring the same rights to car buyers. Then they turned around and killed a bill that would have done exactly that.

If consumers don’t win back our rights through the CFPB’s rulemaking, then it looks like we will have to resort to free market solutions, like not buying another car from a dealer until we have the same legal protections they do.

Here’s the letter the car dealers sent to Members of Congress

And —  in case you haven’t already seen enough hypocrisy in this battle, here’s what Republican Senator Chuck Grassley of Iowa had to say, in favor of the legislation he authored, giving car dealers a special exemption from being forced to arbitrate their claims, in order to purchase a franchise to sell cars:

“While arbitration serves an important function as an efficient alternative to court, some trade-offs must be considered by both parties, such as limited judicial review and less formal procedures regarding discovery and rules of evidence. When mandatory binding arbitration is forced upon a party, for example when it is placed in a boiler-plate agreement, it deprives the weaker party the opportunity to elect another forum. As a proponent of arbitration I believe it is critical to ensure that the selection of arbitration is voluntary and fair…Unequal bargaining power exists in contracts between automobile and truck dealers and their manufacturers. The manufacturer drafts the contract and presents it to dealers with no opportunity to negotiate…The purpose of arbitration is to reduce costly, time-consuming litigation, not to force a party to an adhesion contract to waive access to judicial or administrative forums for the pursuit of rights under State law.”

Senator Grassley also said:

“This legislation will go a long way toward ensuring that parties will not be forced into binding arbitration and thereby lose important statutory rights. I am confident that given its many advantages arbitration will often be elected. But it is essential for public policy reasons and basic fairness that both parties to this type of contract have the freedom to make their own decisions based on the circumstances of the case.”

Couldn’t have said it better myself. So how come he and his colleagues in the House have changed their tune, when it comes to consumers?

Could it be that Sen. Grassley and the Republican Congress rely on campaign contributions from Wall Street crooks who pass on a tidy portion of the $$ they extract from consumers, via the Rip-off TAX? Hmmmmm….

CarMax – still selling unsafe cars with lethal safety defects

CarMax is the nation’s largest retailer of used cars. Unlike some of its competitors, it has a policy of deliberately selling its customers vehicles that it knows are unsafe. Consumers who buy cars from CarMax risk being sold cars with defects that have caused tragic deaths and injuries.  Defects like stalling in traffic, catching on fire, faulty brakes, air bags that spew metal fragments that cause blindness or bleeding to death, seat belts that fail in a crash, axles that break, steering loss, rolling away while supposedly parked, hoods that fly up in traffic, sticking accelerator pedals, and other dangerous defects.

Please warn your family and friends.  Check out these TV reports to find out more about how CarMax is deceiving and tricking people into buying unsafe cars — putting them and their families at risk, and endangering the lives of others who share the roads.

ABC’s 20/20’s investigative report

WCVB 5 Boston report