Chrysler Allegedly Bouncing Lemon Law Checks

Posted: May 19, 2009

If Americans weren't already reluctant to buy from an automaker in bankruptcy protection, this won't help.

The Los Angeles Times reports, "Chrysler's bankruptcy is throwing a wrench into California's lemon law, which is intended to make it easier for consumers to get refunds for defective vehicles. As the automaker's bankruptcy grinds away, settlement checks from Chrysler to unhappy car buyers are bouncing and complaints are stymied in and out of court."

According to the Times, California's lemon law, like those of most states, allows consumers to return vehicles for a full refund under certain circumstances. In California, the manufacture is allowed four attempts to repair a defect - or two, if the defect is considered life-threatening.  If the defect still exists after that, the manufacturer must buy the car back.  The law also requires automakers to buy back a car that has been out of service for 30 days during its warranty period, due to a covered defect. 

In California, Autoblog reports, "settlement checks for Chrysler vehicles that have already been agreed upon as defective are apparently bouncing, costing already irked consumers additional time and money."  Some buyers have attempted to take the company to court, but Chrysler's bankrupt status complicates that process.  Autoblog notes, "Chrysler is telling customers with lemon law claims to get in line - by filing a claim with the courts, in effect joining the automakers other unsecured creditors seeking payment. In that scenario, however, defective car owners aren't expected to see much more than ‘pennies on the dollar.'"

If you're in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.