is largely a gesture to convince people to buy cars, rather than a thoughtful plan to provide a true safety net.
Stamford, CT (PRWEB) March 31, 2009
When President Barack Obama announced that the U.S. Treasury Department would back-stop warranties for consumers who buy Chrysler and General Motors vehicles, Connecticut lemon law attorney Sergei Lemberg's first reaction was, "It's not enough." While he applauded the President's Auto Task Force for providing some consumer protection, Lemberg said that the plan unveiled on Monday "is largely a gesture to convince people to buy cars, rather than a thoughtful plan to provide a true safety net."
According to the plan, GM and Chrysler would contribute to a special fund, which would also receive money from the federal government in the form of a TARP loan. In the event either automaker goes bust, a program administrator would be appointed to find repair services for vehicles that were purchased during an as-yet-undetermined restructuring period and that are still under warranty. "But what happens when the vehicles purchased by reassured consumers are defective and are unable to be repaired during the warranty period?" asked Lemberg. "This program offers absolutely no protection for consumers who discover that they've bought lemons."
Lemberg also noted that, if GM or Chrysler were to file for bankruptcy, such an action would put the brakes on state lemon law proceedings. "All lawsuits, including lemon law actions, stop with a bankruptcy filing," he said. "This would even apply to lemon law arbitrations administered by state Attorneys General."
According to Lemberg, the President's Auto Task Force should have made provisions for the federal government to back-stop lemon buybacks and compensation. "In these difficult economic times, making the decision to buy a new vehicle is a huge commitment," he said. "By not including provisions for defective vehicles, this new program gives consumers a false sense of security."
About Lemberg & Associates, LLC
The attorneys at Lemberg & Associates, LLC are experts in warranty and lemon law, and practice in New York, Connecticut, New Jersey, Massachusetts, Pennsylvania, Maryland, California, and Washington, D.C. Sergei Lemberg can brief you about the potential effects of automaker bankruptcy on consumers, state Lemon Laws, and other protections afforded car owners.
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Lemberg & Associates, LLC