Articles Posted in General Lemon Laws

After over a decade (since 1992) of Congress’ passage of a nationwide database that tracks lemon and stolen cars, the tracking system still remains to be completely implemented.

The Justice Department, the governmental body responsible for overseeing the program, cites that the primary reason for non-implementation is money. The Justice Department further states that it may cost about $11 million dollars to create and manage such a robust interstate database.

The database is part of the Anti Car Theft Act and is intended to track cars and trucks based on its’ vehicle identification number (VIN). The database will include comprehensive information about a vehicle’s lemon status, whether it is a stolen vehicle or not, and etc. The goal of having such a database is to control lemon-car laundering and to provide businesses and consumers with accurate information about a vehicle’s history.

Robert Russo, the former lemon law unit director of New Jersey now leads New Jersey’s Consumer League. Russo is also a (former) mayor of Montclair, NJ and a former political science professor at Rutger and Montclair State University.

The Consumers League of New Jersey is a statewide consumer advocacy and educational group that is associated with its parent group, the National Consumers League.

In his new capacity as president of New Jersey’s Consumers League, Russo plans to advocate for stronger lemon laws for the state of New Jersey. Further, he intends to educate the public on their rights on what to do in the event that the new car they purchased is a lemon.

Many of us have bought used or pre-own cars (I have bought three in Dallas Texas) and had the experience of wondering if the price you were paying was fair, or if the car was a lemon under the Texas lemon law.

Back in 1970, economist George Akerlof examined this issue. He wrote a paper entitled “The Market for Lemons: Quality Uncertainty and the Market Mechanism.” While he took the used car market as an example, his writing was applicable to many more buyer/seller situations.

Two aspects of the used car transaction were important to Akerlof. Not all used cars (or new cars) are of the same quality – some are in good condition and are solid vehicles, while others have many defects and are undesirable for potential buyers. This wide range of conditions reflects the quality heterogeneity of the pool of vehicles.

The second aspect was the asymmetry of information between the seller and the buyer. The seller may know a great deal about the vehicle being sold while the buyer knows very little. Additionally, some buyers will be able to more accurately assess the true condition of the vehicle that they are purchasing.
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At my Dallas based law office, I often refer to the Texas lemon law as the manufacturer’s lemon law, because it is arguably apparent that the law favors car manufacturer more than consumers. For example, the mileage deduction that the manufacturers are entitled to in the event of a repurchase or replacement may often be so high that it causes consumers to be upside down; making the consumer worse off then a regular car trade in.

Last week, I posted an article comparing the “Texas Lemon Law” against the upcoming new Australian Lemon Law. This morning, I stumbled upon an update with Australia’s drafting and legislation of the upcoming lemon law.

It looks like Tony Robinson, Australia’s Consumer Affairs Minister will invite both consumers and industry representatives to provide feedback and input on the new law. Those who are interested in participating in drafting the new Australian lemon law has until November 23, 2007 to write to the ministry.