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Chrysler Bouncing Lemon-Law Checks

Posted in auto industry, Beater Cars, Chrysler, Detroit, Maintenance, Newsworthy, Repair, Scandal by Alex Kierstein | May 18th, 2009 | 1 Response |


As if the pentastar boys weren’t having enough trouble, word comes that they are bouncing checks due to owners of vehicles in California that the company has previously agreed are defective under the state’s Lemon Law. The customers, often with claims worth the entire cost of the vehicle, seem to have few options.


It works like this (at least in California): if your car can’t be repaired in 4 attempts (2 if it’s a serious enough fault to be life-threatening), the manufacturer is obligated to buy the car back. But because of Chrysler’s Chapter 11 filing, the Lemon Law accounts are frozen, and the company must ask the bankruptcy judge for permission to free up the funds. Chrysler, apparently unaware of something known as a “public relations fiasco,” has decided not to ask the judge in the near future. This leaves most Lemon Law claimants out of luck. Chrysler suggests that they could also get in line with other creditors of the company, but as one attorney who does Lemon Law work points out, it would set up the owner for a pennies-on-the-dollar settlement.

So no word if/when relief is coming. But consumer groups are lobbying the President to act, so there may be hope yet. Maybe.

[Source: LA Times]

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One Response

  1. Lightnup says:

    Since Obama ran roughshod over the Constitution and took it upon himself to blithely nullify the contractual rights of Chrysler’s bondholders in order to cram this gift to the UAW down our throats, maybe he should cover a few of those bad checks himself. Oh wait…he only enjoys spending OUR money, not his. Never mind.