Buyer beware: Chrysler bankruptcy causing bounced lemon law settlement checks
05/18/2009, 4:24 PM
By Drew Johnson
Chrysler’s Chapter 11 bankruptcy is already having an impact on the automaker’s resale values, but those unlucky enough to be stuck with a Chrysler-made lemon are suffering even worse. Despite lemon laws intended to protect consumers, those with defective Chrysler products are getting nothing as the automaker fights through bankruptcy court.
Lemon laws are intended to protect consumers from vehicles that are inherently flawed – typically defined as vehicles that can’t be repaired after four attempts or have been out of service for more than 30-days during a warranty period – but Chrysler hasn’t been holding up its end of the deal since its April 30th bankruptcy filing. Any lemon claims against Chrysler must now go through bankruptcy court, with several of the automaker’s already cut lemon checks bouncing.
Lemon law attorney Alex Simanovsky told the Los Angeles Times he has “a stack of six or seven checks” in his drawer right now from Chrysler that have bounced. Lemon law settlements can range from as little as $2,000 all the way up to the value of a new car — $40,000 or more in some cases.
Despite the obvious problem, Chrysler says it isn’t doing anything to remedy the situation. “This is a complex process and there are a lot of issues being discussed,” Chrysler spokesman Mike Palese told the LA Times. “This could be one of those issues that comes up in the course of the bankruptcy, but I can’t say that we have any plans to present it at this time.”
Simanovsky says Chrysler lemon owners will be “lucky to get pennies on the dollar.” In some cases, consumers have already returned their Chrysler product but have received nothing back, leaving them without a car or the money to purchase a new one.
05/18, 4:32 PM
posted by:
Mutant@DCX
State Obvious remarks below:
05/18, 4:43 PM
posted by:
JakeK66
Obvious Remark #1: If you were scared to buy a Chrysler product before, this really makes you scared. If you were not scared – you should be.
05/18, 4:57 PM
posted by:
iluvamcars
if i would by a chrysler, it would be well after bankruptcy is finished and fiat is here.
05/18, 5:21 PM
posted by:
F3INT))AP3X
If I were to buy a Chrysler…..O wait I never would because they have and always will be garbage lol.
05/18, 6:01 PM
posted by:
wbent
Obvious Remark #2: Anyone surprised by this
05/18, 6:13 PM
posted by:
leftwingagenda
i shouldn’t have been surprised, but i am…you’d figure chrysler would pass the buck and pay those obligations through their government loans…i wonder how much money we’re talking about…how much chrysler pays out a year in lemon suits…
05/18, 7:03 PM
posted by:
FSVT_ROCK
nice job Chrysler, shame shame shame
05/18, 9:27 PM
posted by:
aggie531
haha that sucks. have fun recovering!!
05/18, 9:51 PM
posted by:
idrinorbarsaku
Man would it suck to be someone who was about to receive their lemon claim…i would probably reach the point of crashing the car into their, soon-to-be, extinct dealer!
05/18, 10:00 PM
posted by:
johnnycanuck
Of all the sh*t going down in the industry right now this barely even registers on the pissofferometer. I’m not defending it but put it into perspective: how many customers were burned- and not just Chrysler customers- by engine sludge issues? The numbers are no doubt staggering and just where have all those claims ended up?
Actually I’m curious, does anybody know?
05/19, 12:39 AM
posted by:
jdasch1
Generally one should NEVER enter into a contract or possible recourse deal with an individual or company that is currently in bankruptcy. Once the bankruptcy has been discharged, credit card offers and car loans are plentiful. Thats why a bank will not loan money to anyone who has not had their bankruptcy discharged. I don’t know if buying a Chrysler vehicle right now, and having enough problems for a lemon law claim, maybe you would stand in line for resolution?? Does anybody know if when you buy a car today from the old Chrysler you sign paperwork with the NEW Chrysler?? I don’t think the new company has been finalized from the judge in this case. Lemon law claims are rare, but its risky right now for knowing your consumer rights.
05/19, 8:17 AM
posted by:
Lyndongolden
As someone who has been through the (Texas) lemon law process with one of the Big 3, I can say that the ordeal was drawn out over a period 3 months, it required taking time off work, and it required a fight.
In the end, it was worth the effort, and my settlement check was very fair.
But if the manufacturer had been in the midst of bankruptcy at that time, it would have been risky for me to stall and drag-out the Lemon Law proceedings, hoping to clear the bankruptcy hurdle, waiting for the dust to settle.
Part of the settlement check amount is determined by how many miles are on your car just days before you return it and pick up your check. They gave me a mileage cap.
Anyway, its complete crap that Chrysler is not taking special care to handle those few people who were let down by the product and who are now being screwed around with their Lemon Law settlements.