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Table of Contents

• When vehicles under recall remain unrepaired
• An auto owner’s guide to safety recalls
• Car buying checklist
• Unrepaired loaner and rental cars pose dangers
• Recalls may have insurance ramifications
• About Consumer Action

Web Bonus Articles

• Know the 'secret': Recourse without recall

Consumer Action would like to acknowledge the assistance of Rosemary Shahan, president of the non-profit advocacy group Consumers for Auto Reliability and Saftey (CARS), in preparing this issue. Visit CARS online.

When vehicles under recall remain unrepaired

By Ruth Susswein

More than one in five cars and trucks have been recalled for some sort of safety defect this past year. What’s more alarming is that many of these seriously flawed cars remain unrepaired.

Nearly eight million Toyotas, Hondas, BMWs and other vehicles with defective Takata airbags were recalled last October. Metal shards exploded out of some of the airbags, killing and injuring people. More than 60 million other vehicles (from most major carmakers) have been recalled for other problems, such as defective ignition switches that cause cars to shut down during driving, electrical problems that cause car fires, axles that break, steering loss, brake failures and other life-threatening safety defects.

Unrepaired recalls

About 25 percent of car owners don’t get their cars repaired within 18 months of a safety recall, according to the National Highway Traffic Safety Administration (NHTSA). According to Carfax, a seller of vehicle history reports, about 36 million registered cars and trucks have outstanding safety recalls.

With 544 recalls in just the last year—more than one a day—some cars go unrepaired because owners aren’t aware of recall notices or don’t follow up because of consumer confusion, trouble tracking so many recalls, or recall “fatigue.” Safety advocates say that some recall notices are written to downplay the potential harm. Recall notices may not even reach owners, particularly if they have moved or the vehicle registration is not up-to-date. Sometimes, parts needed to repair a defect are in short supply, leaving potentially dangerous vehicles on the road indefinitely. In some cases, no recall has been officially announced. Other times, recalls become somebody else’s problem, like unsuspecting used car buyers.

It is a violation of federal law for car dealers to sell recalled new cars to consumers. However, there is no law prohibiting car dealers from selling recalled used cars to consumers. Even with widespread public support, auto dealers defeated California legislation last year that would have banned the sale of unsafe, recalled used cars to consumers.

Consumers for Auto Reliability and Safety (CARS), Consumer Action, the Consumer Federation of America, Consumers Union and other consumer groups have petitioned the Federal Trade Commission (FTC) to crack down on CarMax, the nation’s largest used car retailer, for advertising that its “certified” vehicles must pass a “rigorous 125+ point inspection.” Yet CarMax continues to sell recalled cars with unfixed safety defects.

“CarMax is playing ‘recalled car roulette’ with its customers’ lives,” says auto safety advocate Rosemary Shahan, president of CARS.

CARS has spearheaded a national campaign to stop the auto giant’s sale of unrepaired cars that are under a federal safety recall. A recent ABC “20/20” undercover investigation found six cars on a Connecticut CarMax lot with unrepaired safety recalls. One Toyota Camry had three safety recalls pending, including a propensity to catch fire.

In a statement, CarMax admitted to 20/20 that “it does not automatically fix recall vehicles before selling them and only does so if a customer requests it.” The car dealership chain said that it notifies customers of open recalls after they have selected a car. CarMax has updated its website to provide a link to the government’s database for recalls.

Shahan warns, however, that the vehicle history reports that CarMax provides via its website (from AutoCheck) don’t include safety recalls, giving the false impression that recalled cars have no serious problems.

Manufacturers are required to cover the cost of safety repairs for 10 years from the time a vehicle is determined to have a safety defect. But with the average age of a car at 11.4 years, that leaves millions of hazardous cars that need out-of-pocket repairs. Unrepaired, unsafe cars also put others on the road at risk.

Unrepaired rentals/loaners

While the government requires car manufacturers to notify consumers of safety defects and perform the repairs, there are holes in that safety net. Rental car companies are not legally required to repair recalled vehicles before renting them to consumers. Congress has proposed, but not passed, legislation that would prohibit the rental or sale of recalled cars without repair. Recalled models of loaner cars, offered by auto dealerships, are also not mandated for safety repairs. For more on this issue, see "Unrepaired loaner and rental cars pose dangers".

Attention to safety

According to NHTSA, as of December, GM had repaired only 60 percent of its cars under recall for dangerous ignition switch defects, leaving about one million affected vehicles still to be repaired. The federal traffic safety regulator is urging car owners to schedule safety recall repairs and counseling used car buyers to check with SaferCar.gov for recall notices using the car’s vehicle ID number (VIN). With record levels of recalls, NHTSA says it’s insisting that car manufacturers do more to reach drivers of recalled cars, such as target non-English speakers, use social media and offer incentives to achieve more safety repairs.

With major investigations, record fines and increases in liability, some carmakers, like Toyota and General Motors, are taking additional steps to reach consumers with unrepaired safety problems. Toyota and GM have turned to contacting customers by phone (not just mailing a recall notice) to encourage replacement of defective parts.

Shahan and other safety advocates also recommend that states provide safety recall notices to owners of recalled cars along with vehicle registrations.

Editor’s note: Help stop CarMax from selling recalled cars by signing a Change.org petition.

An auto owner’s guide to safety recalls

By Monica Steinisch

A safety recall is public notice that a “defect” posing a risk to safety exists in many vehicles of the same type.

Recalls can be initiated voluntarily by a car manufacturer or ordered by the National Highway Traffic Safety Administration (NHTSA). The federal agency establishes vehicle safety standards, investigates consumer complaints and requires manufacturers to recall cars with safety defects.

Examples of safety defects include wiring that catches on fire, steering or breaking systems that freeze up, accelerators that stick and air bags that deploy when they shouldn’t. Safety recalls are mandated by law, under the National Traffic and Motor Vehicle Safety Act and the Highway Safety Act. Recalls for non-safety-related problems, such as prematurely peeling paint or a radio that doesn’t work, are not.

Under the law, car manufacturers must do their best to notify all registered owners about a safety defect. Typically, this means mailing a letter to registered owners. The recall notice must include a description of the defect, an evaluation of the risk it poses, warning signs to look for, details about how to obtain a “remedy” at no charge, and who to contact if there is a problem getting the free recall work.

However, many owners never receive notice and never learn of a recall because of an address change or because they purchased the car from a private party. If car owners do not have their car serviced at a dealership or mechanic that notifies them of a recall, they may never learn of the free repairs for a safety defect. Owners can check with NHTSA about recalls by calling 888-327-4236, or they can visit SaferCar.gov to look up safety recalls by vehicle identification number (VIN) or by year, make and model. VINs often are located in the lower left corner of the dashboard, in front of the steering wheel, or on your automobile insurance policy.

SaferCar.gov tracks major auto manufacturers’ recalls for 15 years, though it might not include very recent recalls for which all VINs haven’t yet been identified. Used car buyers should use the VIN search tool before buying to learn if a vehicle has not been repaired. Manufacturers, too, post recall information on their websites.

Tip: Car owners who want notice of future recalls can sign up for email alerts or download the free SaferCar mobile app.

The law allows manufacturers to repair the vehicle, replace it with a similar vehicle or provide a refund of the full purchase price (less a reasonable amount for depreciation). Whichever remedy is offered, it must be provided at no cost to the car owner and within a “reasonable time,” regardless of whether you received a recall notice.

Manufacturers have 60 days from the date on the recall notice to begin providing a remedy. Remedies are usually carried out by dealerships. If you have trouble getting the free remedy in a timely manner (after 60 days), contact the automaker directly at the number on the recall notice. If you’re still having problems, contact NHTSA’s Vehicle Safety Hotline at 888-327-4236 or online.

The law does not require automakers to provide free repairs on cars older than 10 years (as of the date the defect was determined), though some may. For all drivers’ safety, NHTSA urges owners to have the repair done even they have to pay for it themselves.

Recall shortfall

The law falls short in the area of reimbursing car owners who incur damages as a result of a safety defect. In other words, if your accelerator sticks and you drive through a garage wall and break your leg on impact, don’t plan on getting the manufacturer to fix the garage damage, pay your medical bills or reimburse you for lost wages—at least not easily. If you have adequate insurance, it should cover these losses. If you have uncovered costs, talk to an insurance, product liability or personal injury attorney to see if you have a good case against the manufacturer. The National Association of Consumer Advocates offers attorney listings. There may also be state laws that provide legal recourse. Contact your state’s attorney general for information.

Recouping repair costs

Many consumers pay to repair a problem that later becomes the subject of a safety recall. Generally, the automaker must reimburse you if you can provide a receipt for the repair showing it was performed within one year of the recall or the date NHTSA opened its “engineering analysis.”

The reimbursement claims process will vary by automaker, so contact the manufacturer directly to find out its requirements and limitations. Have your receipt available. Contact NHTSA if the automaker refuses to reimburse you for the cost of repairs if you had them done by an independent mechanic rather than at a dealership.

Learn more in NHTSA’s publication “Motor Vehicle Defects and Safety Recalls: What Every Vehicle Owner Should Know”.

Safety defect?

Report safety defects—almost all recalls result from consumer complaints. To file a complaint, contact NHTSA’s Vehicle Safety Hotline at 888-327-4236 or online.

Consumer complaint reports are publicly available. This information can help you know what, if any, safety issues you should be aware of per make and model.

Car buying checklist

By Alegra Howard

Whether buying a new or used car, truck or SUV, it pays to do your research. By understanding a car’s costs, your budget and the car’s value, you’ll be better prepared to deal with the sometimes stressful steps of making an auto purchase.

Calculating costs

When deciding if you can afford to buy the car you’ve got your eye on, remember to factor in a car’s full costs. Apart from the sticker price, that includes the cost of insurance, fuel, car maintenance and possibly financing. Plus there will be additional initial costs such as taxes, title and registration fees. Try Edmunds’ “True Cost to Own” pricing system free online. It calculates costs car buyers may not have considered, such as depreciation, taxes, fees, fuel, maintenance and repairs.

You may have an idea of the type of car you want, but aren’t sure of much else.

On a tight budget? Maintenance costs are something to consider. Drive long distances for work? You’ll want a car with good gas mileage. Below we’ve listed sites that will make researching your needs a lot easier.

Reviews

Edmunds.com, a standout from Consumer Action’s Pre-purchase Resource Guide (2013), is the complete one-stop shop for new and used car buyers. Users can search its database by vehicle make and model, or by the amount they want to spend. They can also see reviews, road tests, check for rebates and read the site’s recommended “best” car lists. The “Edmunds Price Promise” gives car shoppers a guaranteed price on a specific car. The site’s appraisal tool allows consumers to view the market value of a used car.

Kelley Blue Book reports new and used car prices. For 2014 and 2015 models, the guide provides a car’s sticker price, dealer invoice price and Kelley’s New Car Blue Book value. For used cars, it provides retail value, trade-in value and private party value. The site also includes consumer reviews and vehicle pros and cons.

Insurance

Every automobile is rated by insurance companies and given a numeric symbol that represents how risky the vehicle is to insure. Insurers consider the auto’s year, make, model, safety features and crash test ratings to determine rates.

The Insurance Institute for Highway Safety (IIHS) is a non-profit organization funded by auto insurers. Its free website allows consumers to compare new and used cars’ insurance losses for property damage liability, personal injury, medical payment and collision costs. The site also provides its “Top Safety Picks,” plus booster seat recommendations and advice on choosing vehicles for teens.

Lease vs. loan

Leasing is typically good for consumers who like to replace their car every few years and are looking for convenience, despite some restrictions. While you can typically score lower monthly payments and pay less money down by signing a lease, you’ll be locked into mandatory maintenance costs, mileage caps (as few as 12,000 miles a year) and early termination penalties. Also, at the end of the lease period you don’t own the car.

Buying makes sense for consumers who plan to keep a car for many years, as long-term reliability of automobiles is far better than in the past. Once you’ve paid off the loan, you no longer have to budget for monthly payments.

If you plan to use a loan to buy a car, your first step should be to research what interest rates you’d qualify for. Financing through a car dealer is an option, but you can often find a better deal by comparing rates at local banks and credit unions, or online at sites like Bankrate.com. The Consumer Financial Protection Bureau (CFPB) warns that dealer-arranged financing may include “rate padding”—bumping up your interest rate even though you could qualify for a lower rate elsewhere if you shopped around.

The ‘right’ rate

Get preapproved or prequalified for a car loan before you start negotiating. The rate you’re eligible for will depend on several factors, including your:

• Income
• Credit score
• Debt-to-income ratio (how much you owe vs. how much you earn)

Lenders divide your monthly payments by your monthly income to determine your debt-to-income ratio (DTI). Most lenders require a DTI of no more than 36 percent, meaning that less than 36 percent of your income must go to paying your monthly bills. You can use Bankrate’s DTI calculator to figure this out.

Credit scores (FICO) range from 300 to 850, with lenders offering the best rates to borrowers with scores above 700.

Your next step is to shop around for the best loan offer. Focus on the annual percentage rate (APR).

“Rate shopping,” or submitting applications to multiple lenders to compare interest rates, makes sense if you apply for several loans within about a 30-day period. Lenders recognize that you’re shopping, so multiple “inquiries” won’t hurt your credit score.

Next, look at loan length. Dollar-wise, shorter is better. While a longer-term loan—say a five-year loan vs. a three-year loan—will cost less per month, you will spend significantly more in finance charges over the life of a five-year loan, making your overall car costs much more expensive.

Once you know what rate you qualify for, it’s time to ask a car dealer about financing. Compare rate and downpayment costs with the rates you’ve been approved for from local banks and credit unions.

Note: Many car buyers negotiate the price of the car with a dealer but forget to negotiate the rate on the loan as well.

Negotiating

Edmunds’ Incentives and Rebates database allows consumers to compare discounts offered by local dealers. The Federal Trade Commission says consumers who bargain could see a 10- to 20-percent price difference between the manufacturer’s suggested price and the dealer’s price.

Consumer Reports’ annual New Car Report, also available for used cars, provides consumers with details on how much dealers pay for vehicles by make and model. The report’s “bottom line price” subtracts dealer incentives, rebates and holdbacks from the car’s invoice price, giving you the “sweet spot for negotiation” for more than 1,000 models. The report will cost you $14, but could save you thousands by arming you with the information needed to negotiate with confidence.

Trade-ins

The FTC recommends consumers negotiate trade-in values only after they have negotiated the best price on a car. Go in knowing the value of your old car. Websites like Kelley Blue Book, offering free reports, and the National Automobile Dealers Association, where reports start at $50, can help you estimate your car’s worth based on its make, model, miles and options, like leather upholstery.

Shopping tips

To cut down on new-car haggling, bank and insurance company USAA recommends visiting car dealerships near closing time on weekdays. TrueCar’s statistics show that shopping for new vehicles at the end of the month, quarter or year may result in the best deals. This is when manufacturers roll out new inventory and sales quotas must be met. August is known for deals on wagons, SUVs and coupes.

Used cars

Used cars are sold through auto dealers, rental car companies, online and through classified ads, like Craigslist. Ask friends, relatives and co-workers for trustworthy leads. Before you purchase a used car from a dealer or company, contact your local consumer protection office or Better Business Bureau to check the dealer for unresolved complaints. Although not 100 percent reliable, you can also search peer review sites like Yelp. Before purchasing, always have the car checked out by a mechanic. (If buying from an individual, know the dangers of “curbstoners”—individuals who pose as a car’s owner but do not hold the title to the cars they sell. Learn more at StopCurbstoning.com.)

Test-drive

When you test-drive a vehicle, check out the car’s features: Do the windows and USB outlets work? Do the trunk and hood open normally? Does the convertible’s top leak in the rain? Some slight defects may not be deal-breakers, but if you notice them, they can be used to negotiate a better price.

Maintenance records

A detailed repair record shows that the automobile has been well maintained by its previous owner. If the owner doesn’t have service receipts, Cars.com suggests asking where the vehicle was serviced. You may be able to obtain the files from the repair shop directly. The record could provide a good indication of what will need to be replaced in the near future.

Check Consumer Reports’ car repair estimate tool (free with a $6.95 monthly membership) to learn how much you can expect to pay for repairs by model and make in your ZIP code. Cars.com also has a free repair estimate tool, Fair-Price Estimator.

Safety

Perhaps the most shocking element of buying a used car is that a dealer is not obligated to tell you if the car you’re purchasing has an outstanding safety recall. Consumer Action and its coalition partners have been advocating for federal legislation to change this dangerous oversight (see “Unrepaired Loaner”). Meanwhile, be sure to check for manufacturers’ recalls at SaferCar.gov, and don’t buy a car with an open recall until it is repaired. (For more information, see “An owners’ guide to recalls.”)

Check a vehicle’s condition and history through the National Motor Vehicle Title Information System (NMVTIS). This site provides links to government-verified websites that sell individual vehicle history reports (between $3.50-$50), including model history, manufacturer’s defects, salvage and flood status, title history, sometimes the most recent odometer reading and whether the car has ever been reported stolen.

The NICB, or National Insurance Crime Bureau, allows consumers to search its free “VIN Check” database. The records highlight flood damage, auto accidents and other insurance claims information.

The Center for Auto Safety website lists state laws governing cars with irreparable defects (“lemons”), government safety recalls and consumer complaints searchable by make and year. The non-profit also publishes its annual “Car Book” ($29), which provides car recommendations in 10 categories, including crash safety stats, insurance premiums and repair cost estimates.

Carfax and AutoCheck

Carfax and AutoCheck compile vehicle history reports that include details like mileage verification, accident history (if reported), emissions history and previous owner information. However, these reports are only as good as their sources of information, which include state DMV records, repair shops, dealerships, body shops and police reports. Smaller shops do not report the repairs they make. AutoCheck runs $29.99 per report while Carfax costs $39.99.

Unfortunately, none of these reports can tell you how a car was driven or whether repairs were substandard. The better investment is to pay for an independent mechanic to inspect the car.

Independent inspection

Before you commit to a car purchase, have a trained mechanic inspect the vehicle. This will cost about $100, but it might keep you from being saddled with a lemon.

Pre-purchase inspections include assessing the car’s engine, suspension, transmission and wheels. The mechanic will check for fluid leaks from the engine, transmission and cooling systems. Wheel inspection will estimate how much life you have left in the car’s brakepads. A good mechanic also will be able to see evidence of previous undisclosed bodywork on the car.

To find a pre-purchase inspection facility, ask friends and relatives for referrals. Look for shops that display certifications such as the Automotive Service Excellence (ASE) seal. You can search for a certified technician through ASE’s website.

The more pre-purchase research you do, the easier it will be to avoid getting stuck with a dangerous lemon. At a minimum, obtain an independent mechanic’s inspection, check a used car’s vehicle history report, and search for safety recalls for peace of mind.

Unrepaired loaner and rental cars pose dangers

By Ruth Susswein

Driver beware: It’s not just the car in your driveway that might be unsafe due to unfixed, faulty parts. If you’ve brought your car in for repair, the loaner car you’re given to drive temporarily also may contain defective parts. (Loaner cars are the vehicles that car dealers offer customers at no charge while their cars are being repaired.) Loaner cars that are under recall for safety defects—and unrepaired—can put you and everyone else on the road at risk of serious injury or even death.

In 2009, an off-duty highway patrol officer was driving a loaner Lexus on a California freeway when the car unexpectedly accelerated to 120 mph and the brakes wouldn’t work. All four passengers, including his 13-year-old daughter, were killed in the crash. The details of this tragedy came to light because one of his passengers called 911 before the car crashed. Two months later, Toyota began a recall of up to eight million vehicles for sudden acceleration problems. Ultimately, Toyota was fined a record $16.4 million for delaying a safety recall.

Car safety advocate Rosemary Shahan, president of the nonprofit advocacy organization Consumers for Auto Reliability and Safety (CARS), says the loaned Lexus should have been under recall at the time of the accident and off the road until repaired. But no law specifically requires loaner cars under safety recall to be repaired before being used by unsuspecting drivers.

“If you’re leaving your car for repairs, you need to check the VIN [vehicle ID number] of any loaner car to be sure that it’s not under recall,” warns Shahan.

Rental car companies also are not required to repair recalled vehicles before renting them to customers. But all of the major rental car companies, including Hertz, Enterprise, Avis Budget, Dollar Thrifty and National, voluntarily have pledged to stop renting and selling unrepaired recalled cars to consumers. (Rent-A-Wreck has not pledged to repair its rental cars.)

Many car rental companies have been working with safety group CARS to pass rental car safety legislation. Senators Barbara Boxer (D-CA), Charles Schumer (D-NY), Claire McCaskill (D-MO) and Lisa Murkowski (R-AK) proposed the Raechel and Jacqueline Houck Safe Rental Car Act, which would ban the rental or sale of all cars that have been recalled unless safety repairs have been completed.

The legislation was named after two California sisters in their 20s who were killed in a fiery crash while driving a rental car with an unrepaired recalled power steering problem. (Only new cars under safety recall are prohibited by law from being sold without repair.) Introduced in the last two sessions of Congress, the legislation has not been passed into law. Advocates are seeking sponsorship of the same bill in the current 114th Congress.

The proposed legislation would:

• Ban rental cars under safety recall from being rented or sold until repaired;
• Require rental car companies to ground all cars under safety recall within 24 hours of notice; and
• Permit recalled cars to be rented only if a manufacturer’s temporary safety fix (such as disconnecting an electrical component) was implemented until replacement parts were available.

“We’d like to see loaner cars included in safety legislation,” says Shahan. “It’s shortsighted and dangerous to recall vehicles with a safety defect but allow unscrupulous car dealers to provide loaners with potentially the same problem.”

Last fall, General Motors—the carmaker with massive recalls for ignition switch defects—became the first and only major car manufacturer to support the bill banning the rental or sale of unrepaired, recalled cars. Trade associations for other major carmakers and new car dealers opposed the rental car safety legislation.

In the last Congress, Consumer Action joined many other advocates in supporting the rental car safety legislation and will work to see it re-introduced this year.

Safety advocates are optimistic that a more complete car safety package with bi-partisan support will be introduced in Congress later this year.

Recalls may have insurance ramifications

By Monica Steinisch

Generally speaking, a recall notice alone will not have an impact on your insurance rates. But there are a couple of exceptions.

First, continuing to drive a car with a safety defect for a substantial amount of time after receiving a recall notice and having the remedy available to you increases your personal liability if the defect causes an accident. In the best-case scenario, your insurance company would cover the losses and raise your rates. Worst case, your insurer could deny your claim if it can prove you neglected to correct a known safety issue that eventually contributed to an accident. If the accident harmed another individual, you could find yourself being sued for negligence.

Second, if the value of your car changes because the model you’ve purchased has been the subject of many recalls, the vehicle’s safety rating may be downgraded, which could also result in higher insurance premiums for all owners of that type of vehicle.

Manufacturers keep records of all recall notifications and repairs made. Still, to protect yourself, you should keep your own record of the repair and have it available in case you are ever in a safety defect-related accident and need to prove that you responded to the recall notice.

If you have an accident that you believe was caused by a safety defect, notify your insurer of your suspicions and file a complaint with the National Highway Traffic Safety Administration (NHTSA). If the defect was part of a recall but you did not receive a recall notice, you might have a legal case against the manufacturer for failing to notify you. Consult with an attorney to learn more.

If you bring a safety defect-related lawsuit against a manufacturer for losses that exceeded your insurance limits or for bills you had to pay because you were uninsured at the time of the accident, the burden of proof is on you (the plaintiff) to show that a defect caused the accident.

Neither private sellers nor independent auto dealers are obligated to have recall repairs performed before they sell a used vehicle. If you purchase a car with an unrepaired defect and end up in a related accident, you could face increased insurance premiums in addition to safety concerns and repair costs. Before buying a used car, check the vehicle ID number (VIN) at SaferCar.gov or call NHTSA at 888-327-4236 to find out if there are any outstanding recalls. The system tracks recalls on individual vehicles sold since 1999.

Some drivers see an auto recall as a nuisance. But safety recalls make the roads safer for everyone, and getting recall repair work done as quickly as possible can also protect you from liability.

Know the 'secret': Recourse without recall

By Monica Steinisch

Most consumers pay out of pocket for auto repairs to keep their car on the road. However, if the problem seems unreasonable for the age or condition of the car, you may have a defect. (A defect is a design or manufacturing flaw rather than simple wear and tear.)

Defects unrelated to safety or not covered by your warranty do not require a free remedy. But resourceful consumers may still be able to wrangle a reimbursement from the automaker.

Customer complaints

To determine if your car has a defect, find out if other owners of the same make and model have had similar issues. Explore the National Highway Traffic Safety Administration’s (NHTSA) complaint database, where you can research which vehicles have pending investigations and read complaint details. Owner sites and chat rooms are also good sources of complaint information.

Legal advice website Nolo.com and other advocates recommend contacting independent garages (not dealerships) that specialize in repairing your car’s make and model. If they can confirm a pattern of premature failure, it’s likely that the automaker is aware of it and may have established a policy for dealing with future cases.

Insider information

In some cases, a “secret warranty” is established, authorizing dealers to perform a free remedy. That can happen when the manufacturer issues a “technical service bulletin” (TSB) advising authorized dealers and subscriber repair shops of a pattern of vehicle problem and how to fix it. A TSB is not a recall notice. Automakers may issue the bulletin to head off a federal investigation, legal action or customer dissatisfaction.

As the name implies, these secret warranties are not always made public. Typically, manufacturers and dealers won’t make the repair for free unless a car owner demands it. Some states, including California, Connecticut, Maryland, Virginia and Wisconsin, prohibit secret warranties. They require disclosure. In states that don’t require customer notification, consumers might never learn about the possibility of a free fix.

Secret warranties are often revealed when consumers learn that a dealer or manufacturer treated car owners with the same problem differently, says the Center for Auto Safety (CAS). But not all free repairs result from secret warranties. Some are just case-by-case decisions by a carmaker or dealer. Secret warranties, explains CAS, are based on a corporate policy to quietly reimburse car owners who complain, but they are not communicated to all consumers.

To find out if there’s a technical service bulletin for your car problem, go to SaferCar.gov, click on the “Search for Recalls” icon on the right side of the page, enter your car information in the search box, and click on the “Service Bulletins” tab. Look for a document related to your problem. A TSB may or may not note that a repair should be made for free. (If it says “ free repair,” print it out and bring it to a dealer.) If you can’t find a TSB or any reference to a free repair, contact a dealer and ask. If the answer is still no, check with an independent shop that specializes in your make of car. Report your car problem to NHTSA.

While the existence of a TSB doesn’t prove there is a secret warranty, it does acknowledge the existence of a defect or problem. The Center for Auto Safety advises watching for TSB phrasing such as “Check for availability of good will assistance” or similarly vague language because, it says, companies often use such language to get around requirements for customer notification in states that have secret warranty disclosure laws.

Negotiation

If you have a defect that is not under recall but you’ve been told by mechanics that some customers have gotten a free repair for the same problem, Nolo says your next step should be to write a demand letter to the dealer and manufacturer stating that if your problem is not taken care of, you will sue in small claims court and you will subpoena all records having to do with this defect. Store your repair receipts in a safe place.

Legal action

Taking legal action against a car manufacturer may seem futile, but many such David vs. Goliath cases have been fought and won based on a history of consumer complaints. For example, BMW of North America (maker of the MINI Cooper) agreed in 2013 to settle a class action lawsuit alleging that it failed to disclose that certain MINI models had transmission defects. Under the settlement, claimants “may be entitled to recover thousands of dollars or a reimbursement for out-of-pocket expenses you incurred for replacing or repairing the transmission.”

A class action lawsuit can be appropriate when a large number of people have suffered the same (or similar) injuries. When looking for an attorney, seek out a firm that has experience in class action lawsuits and specific experience in the type of case you have (consumer issues, defective products, etc.). You can do an online search for keywords such as “consumer class action attorney,” contact the National Association of Consumer Advocates to ask for a referral or advice, or visit Consumer Action’s Class Action Database to look for similar cases and see who represented the plaintiffs. The American Association for Justice, a trial lawyers group, allows the public to search for class action attorneys on its website.

Nolo offers tips for winning your case in small claims court.

About Consumer Action

Consumer Action is a non-profit 501(c)(3) organization that has championed the rights of underrepresented consumers nationwide since 1971. Throughout its history, the organization has dedicated its resources to promoting financial and consumer literacy and advocating for consumer rights in both the media and before lawmakers to promote economic justice for all. With the resources and infrastructure to reach millions of consumers, Consumer Action is one of the most recognized, effective and trusted consumer organizations in the nation.

Consumer education. To empower consumers to assert their rights in the marketplace, Consumer Action provides a range of educational resources. The organization’s extensive library of free publications offers in-depth information on many topics related to personal money management, housing, insurance and privacy, while its hotline provides non-legal advice and referrals. At Consumer-Action.org, visitors have instant access to important consumer news, downloadable materials, an online “help desk,” the Take Action advocacy database and nine topic-specific subsites. Consumer Action also publishes unbiased surveys of financial and consumer services that expose excessive prices and anti-consumer practices to help consumers make informed buying choices and elicit change from big business.

Community outreach. With a special focus on serving low- and moderate-income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of nearly 7,500 community-based organizations. Outreach services include training and free mailings of financial and consumer education materials in many languages, including English, Spanish, Chinese, Korean and Vietnamese. Consumer Action’s network is the largest and most diverse of its kind.

Advocacy. Consumer Action is deeply committed to ensuring that underrepresented consumers are represented in the national media and in front of lawmakers. The organization promotes pro-consumer policy, regulation and legislation by taking positions on dozens of bills at the state and national levels and submitting comments and testimony on a host of consumer protection issues. Additionally, its diverse staff provides the media with expert commentary on key consumer issues supported by solid data and victim testimony.