PDA

View Full Version : Auto waranties and the law



bulliver
23-03-2009, 06:10 PM
Got some terrible news today. My car died about a week ago, and I finally got it into the dealer today. They called and said that the engine had taken on water, and was completely pooched. I was quoted $4500 for a new (used!) engine.

Now:
1. I purchased a used car from a major Edmonton (big 3) auto dealer.
2. I paid $2500 at time of purchase for an extended warranty, which is still valid and in effect.
3. Unbenownst to me, the car had an aftermarket part (namely: a cold air intake) installed before I purchased it.
4. I was told today my extended warranty will not cover this because of the aftermarket part.
5. I was not told about this aftermarket part proir to, or after purchasing the car.
6. I was not told that this part will affect my warranty.
7. As I understand it (I am not a mechanic), the engine is dead _because_ of this part, as it is mounted a few inches above the ground, and sucked in water last Saturday when the temp. was high and there was huge puddles of water all over the roads.

I don't have $4500 for a new engine. I feel sick about having to make payments for four more years on a useless car with no engine. No matter the outcome, this is going to deal a huge blow to my personal finances. I guess what I would like to know is if there may be any legal recourse for me? I am not asking for legal advice, I am asking if I should contact a lawyer? Or is it 'buyer beware' and I am going to have to eat it?

Might there be any recourse for me at all?

Any suggestions appreciated.

grish
23-03-2009, 06:14 PM
what about contacting a TV station and their trouble-thingy department. sounds like it might be a cause they would take up.

It also sounds to me that the dealer had no business selling extended warranty on something the warranty does not cover. Small claims court, perhaps? Finally, there is Service Alberta and BBB.

bulliver
23-03-2009, 06:17 PM
It also sounds to me that the dealer had no business selling extended warranty on something the warranty does not cover.

That is exactly the issue why I feel wronged here.

I am doing a bit of research now, but if anybody knows of some free/low cost legal resource where perhaps I could talk to somebody about this and learn my options that would be great...

grish
23-03-2009, 06:25 PM
/\ when you try small claims, they actually try to help with mediation first as far as I know. Service Alberta is free and is a provincial government agency that investigates, amongst other things, unfair business practices.

Thomas Hinderks
23-03-2009, 08:38 PM
Try a little softer approach before going off the time consuming channels.

1) If you have only talked to the service department I would suggest going back to the salesman you bought the car from and explain the problem and politely how upset you are. At the same time ask to speak to the person that sold the warranty (usually in the finance dept) and do the same.

This will likely get you the result you want, if not.

2) Speak to the General Sales Manager or General Manager, explain the situation and you would rather resolve this "between you" rather than going outside for assistance.

Be very careful about "legal" threats as they usually result in complete shutdown and they ride it out.

3) If speaking to the GSM or GM doesn't help, go directly to the manufacturer the dealer represents and explain the issues.

A dealers Customer Service Index is very important to them and the manufacturer does not take consumer complaints lightly in this day and age.

Following these three steps usually results in a solution fairly rapidly as long as you approach the issue rationally. Explain exactly what you have here and what you expect from them. Screaming and yelling usually just magnifies the problem. Doesn't mean you have to be sunshine and roses, just polite and direct.

If these three steps do not work (I would be surprised) go straight to the better business bureau...they are the next most effect and speedy means. They have a series of different ways to deal with this type of issue and can be quite effective.

For me small claims would be last on my list.

My two bits based on a lot of years in the car biz.

Tom

bulliver
23-03-2009, 09:13 PM
Great advice, thanks Thomas.

I have already started documenting everything that happened/happens, in case this does end up in court, however, before I 'lawyer up' I intend to phone down tomorrow to talk to the manager, to see if we can get this sorted. I am well aware of the need to remain calm and reasonable.

The sad thing is that I really do like the car, and best case would just to have it fixed.

However, if I find no joy from the dealer it seems there are a few options open to me. The 'Fair Trading Act' states that if goods sold were misrepresented it may be possible to recoupe the cost if a claim is made within a year of purchase, which will come around on May 25. The misrepresentation (in my layman's opinion) is that 1) I was not made aware of the aftermarket part and 2) that I was sold an extended warranty without being informed said aftermarket part could affect the warranties efficacy.

Also, both Service Alberta (http://www.servicealberta.gov.ab.ca) and the Alberta Motor Vehicle Industry Council (http://www.amvic.org/) have Information Officers available to contact, discuss, and initiate a consumer complaint.

Hopefully I won't come out of this with a total loss.

kona
23-03-2009, 09:20 PM
Tom's advice is great.

Be as calm as you can stick to the facts, but play on the customer service aspect without being to obvious.

The worst thing to do would be to start yelling and swearing and threatening legal action or bringing in the trouble shooter - which it sounds like you know already.

bulliver
23-03-2009, 09:24 PM
threatening legal action or bringing in the trouble shooter

Yeah, seems to me the media would be only for after all legal channels have been exhausted...

Chmilz
23-03-2009, 09:30 PM
Good luck. Keep us posted with how you make out!

240GLT
24-03-2009, 09:26 AM
This sounds a bit sketchy. Typically if you find water in the engine it's usually antifreeze and it is there because a seal has failed (most often a head gasket) and you're getting antifreeze either in the block or leaking into the combustion chamber from a cooling port.

I've heard of water getting into the intake but I've never heard of that cratering the engine. I can't fathom how you'd get enough water into the intake, past the filter and into the engine to cause damage, just by, say running the car through a puddle. The intake on my Volvo is less than 18" off the ground and I have never had any problem with foreign objects getting in there.

bulliver
24-03-2009, 11:01 AM
I've heard of water getting into the intake but I've never heard of that cratering the engine. I can't fathom how you'd get enough water into the intake, past the filter and into the engine to cause damage, just by, say running the car through a puddle. The intake on my Volvo is less than 18" off the ground and I have never had any problem with foreign objects getting in there.

I don't have the car here to actually measure, but the CAI is mounted quite low, I would say just above the half-way mark of the front driverside wheel. Again, I am no mechanic, is this lower than it should be?

bulliver
24-03-2009, 11:43 AM
Just got off the phone with a manager. I related the details and when I told him I was not told about the CAI he said "I would have known when looking at the engine". So: am I an *****? Show of hands, how many (non-car buffs) would recognize an aftermarket CAI under the hood?

In any event, he said he would 'look into it' and get back to me...

Thomas Hinderks
24-03-2009, 11:43 AM
240GLT

It's called hydralicing, when the engine swallows a sufficent quantity of water in one gulp that a cylinder swallows the fluid and due to the incompressability of fluids the piston is forced to stop immediately and can cause, bent rods, broken pistons, bent crankshafts and in some cases blow the piston rod out the side of the block.

Most vehicles are set up so that the intake is high enough and protected enough that it has become a very uncommon problem in this day and age....however recent trends in small car performance have been moving the air intakes into positions that have seen a resurgence in the problem. Seen a fair number of modified Hondas show up with this issue at friends shops. Still not super common by any stretch but not as uncommon now as it was before the trend to cold air intakes.

Bulliver you should really confirm the details of the problem just to be sure the BS factor is at a minimum.

Tom

bulliver
24-03-2009, 12:51 PM
Thomas,

The service manager phoned me back. His explanation was almost word-for-word identical to your first paragraph above. He made a point of mentioning there was 'a lot' of water. When I asked how water could get in the cylinder he sort of gave me the runaround. When I asked directly if the water came in through the CAI he said yes.

However, it seems clear the dealer wants to wash their hands of this. The service manager explained that even without the CAI this would not be covered by the extended warranty (there is a paragraph about water/flood damage not being covered).

He told me that this damage is likely covered by the comprehensive portion of my automobile insurance, and suggested I open a claim. I have done so, but I am not optomistic. Seems to me as soon as the adjuster finds out about the aftermarket modifications the claim will be denied.

I just don't know what to do...

nobleea
24-03-2009, 01:05 PM
If the CAI caused the flood, then they should refund you the money for the extended warranty they sold you. I would settle for no less than that.

Sure, this wouldn't be covered with or without the CAI. But if the CAI caused it then they are negligent in not pointing out the risks with the intake being mounted so low.

Going through insurance would be my last resort. I think this is a problem that should be addressed by the dealership or warranty program.

Maybe next time to talk to them, kindly inform them that you are recording the conversation. You don't actually have to tell them, and you can bluff if you want by not actually recording the conversation, but they will get the point.

Thomas Hinderks
24-03-2009, 01:17 PM
"However, it seems clear the dealer wants to wash their hands of this. The service manager explained that even without the CAI this would not be covered by the extended warranty (there is a paragraph about water/flood damage not being covered)."

Not overly surprised, if you check most new car warranties exclude this as well. Should have remembered, sorry. Warranties are for mechanical failures on a vehicle not outside influences...like trying to get pothole damage on warranty, same idea.

I made a quick call to a friend in the insurance business and she felt there should be no issue claiming under your comp coverage as it is damage due to road conditions as opposed to a mechanical failure. CAI should not be a factor, when the appraiser contacts you if you are questioned on it simply explain "it came with the car" and leave it at that.

Don't think you should have a problem.

Tom

bulliver
24-03-2009, 02:24 PM
Thanks Thomas, you have been a great help.

Should hear back from the claims adjuster within two business. I am still quite upset with my dealer, and will surely never purchase from them again, but at this point I just want my car fixed and on the road.

etownboarder
24-03-2009, 02:28 PM
If they do nothing at all to help fix the problem, make sure they know you will not have anything positive to say about their business if they ever come up in conversation. In fact, I would still go to the trouble shooter over this. Even if you don't go on air, they'll make a phone call that often solves the problem immediately without making the issue public.

danimalrex
24-03-2009, 05:17 PM
I think the point of contention is whether the issue would have occured at all had the CAI not been installed. If the CAI is significantly lower than stock, you might have been able to drive through that water without a problem.

I guess the question is if the dealer has any liability due to not informing you of the modification. Water in the engine might not be covered under warranty, but you might have something if you can prove that the water in the engine wouldn't have happened if not for the negligence of the dealer.

kcantor
24-03-2009, 05:37 PM
I think the point of contention is whether the issue would have occured at all had the CAI not been installed. If the CAI is significantly lower than stock, you might have been able to drive through that water without a problem.

I guess the question is if the dealer has any liability due to not informing you of the modification. Water in the engine might not be covered under warranty, but you might have something if you can prove that the water in the engine wouldn't have happened if not for the negligence of the dealer.
i'm not a lawyer but i would guess the issue is less about the dealer "not informing bulliver of the modification" and more about the dealer selling him (her?) the extended warranty, accepting the money (including the commission on the sale) and not informing the warranty provider. assuming bulliver has undertaken no other modifications to the car (which the warranty would not likely allow), i would assume he/she to be correct in believing that the warranty should apply to what was sold and warranted to him/her as a "single package".

i would echo tom's advice that bulliver contact the dealer and work his/her way up the hierarchy politely but firmly. at an absolute minimum i would think they should offer to return the 2,500 paid for the warranty. if i were him/her however, i'm not sure i would settle for that. obviously he/she was not prepared to purchase a vehicle without that "piece of mind" in the first place or the extended warranty would not have purchased it so i'm not sure that just getting that money back is enough but that will have to be his/her call if nothing more is readily or easily available.

bulliver
25-03-2009, 07:30 PM
i'm not a lawyer but i would guess the issue is less about the dealer "not informing bulliver of the modification" and more about the dealer selling him (her?) the extended warranty, accepting the money (including the commission on the sale) and not informing the warranty provider. assuming bulliver has undertaken no other modifications to the car (which the warranty would not likely allow), i would assume he/she to be correct in believing that the warranty should apply to what was sold and warranted to him/her as a "single package".

The thing with that, is that the service manager informed me that this sort of damage (ie: water in the engine) would not have been covered even if the part was stock. There is a clause on the back of the extended warranty that precludes them from repairing damage from "water or floods". It was the original mechanic who told me the damage would not be covered because of the CAI, so he was either mistaken or mispoke, or....

So, I am not a lawyer either, but if that is the case then the issue to me is the fact that I was sold the car without the aftermarket modifications being disclosed, as I can reasonably infer that if the part was stock, it would be mounted much higher, and would likely not have sucked in the water and destroyed my engine. To me this is misrepresentation (through omission) and as such I may be able to get the full cost of the vehicle refunded, as though I had never purchased it, as per the Fair Trade Act.

This is the road I intend to go down if my insurance will not cover it. I will find out about that tomorrow. Wish me luck ;)

Oh, and BTW, I am male...

etownboarder
25-03-2009, 07:33 PM
You should go down that road whether or not your insurance says they'll cover the cost. Why should you pay higher insurance costs?

bulliver
25-03-2009, 07:46 PM
^ Well, I don't think I should have to, but the unfortunate side effect of trying to prove misrepresentation is that if successful, I obviously have to give up the car. Other than this current situation, I am very happy and comfortable with the car, and don't really want to give it up...

I don't know, perhaps I am being too emotional about the issue.

Thomas Hinderks
25-03-2009, 09:20 PM
Bulliver and everyone else...

Automotive Warranty is in place to cover mechanical defect or premature wear. Swallowing a load of water is no different than clobbering a large pothole and getting suspension damage or wrecking the wheel and tire...do you think warranty would cover that?

Once the vehicle is repaired the warranty will still be in place to cover what it is supposed to...mechanical defect and premature wear.

Bulliver you need to confirm with the dealer/seller of the warranty that this will be the case.

So this comes down to the question of the cold air intake being the cause and it is possible...insurance should cover in ether case but, the dealer needs to take some responsibility for not disclosing the fact the car was equipped with the aftermarket parts.

As it appears it was not I would be talking to the General Sales Manager and making him aware of the non disclosure and what the service department has said it has lead to...and asking what they are prepared to do in compensation for the non disclosure.

Bulliver...you need to do as recommended and remain civil but make it clear you are not a car guy and would never have known without being told, not uncommon in this day and age where guys don't generally know about cars like those from my generation. You should also be asking how the warranty was sold when the service department (the experts) would have obviously noted the modification when they did their pre sale mechanical inspection on the vehicle.

Again I would approach it from the point of view you wish to settle this between you and the dealer without going further if possible.

I personally would expect and ask for...
1) Confirmation the warranty you purchased will still be valid after repairs are done.
2) The factory air intake to be installed at no cost to you.
3) Some form of compensation for the time and trouble caused by this not being disclosed...here you need to decide what you think is fair.

Be civil but clear that if the matter cannot be resolved in a reasonable fashion and time frame you will continue to pursue the matter as necessary...but would rather deal with it without taking it further.( don't say legal action, causes shut down of negotiation and the lawyers make money)

You need to be dealing with the General Sales Manager or General manager at this point as the Service manager has no authority in matters outside his department.

Keep to the facts, be civil but clear and let us know how it goes

Tom

Transplanted_Edm
25-03-2009, 09:41 PM
This is a crappy situation. But as Thomas Hinderks mentioned, the whole issue of the warranty is really a side issue. It does make this psychologically harder to swallow since you thought you were buying some extra protection, but isn't really meant to cover this kind of damage from driving though what must have been fairly deep water.

From a legal standpoint, I'm not sure you have much of a claim. The vehicle drove fine for an extended period of time (I assume, you didn't say anything different) with the aftermarket part installed. I'm sure the part meets the relevant safety/legal requirements. So it wasn't the part so much as the coincidental combination of the part and driving through the deep puddles.

Almost as if you bought a car with basic or low-grade tires and then during the winter, skidded on an icy road and had a crash. Would you say that the dealer was at fault for not informing you that the tires were only basic and not high-performance?

bulliver
25-03-2009, 10:00 PM
This is a crappy situation. But as Thomas Hinderks mentioned, the whole issue of the warranty is really a side issue.

I'm not sure why this keeps coming up, I explained in post 14 that I was made aware the warranty would not cover this sort of damage even with a stock part...I get that.


So it wasn't the part so much as the coincidental combination of the part and driving through the deep puddles.

But it wouldn't have been a coincidence if I was informed there was an aftermarket part mounted much lower on the vehicle than a stock part, with a much greater chance of taking in water. Point of fact, before this happened I didn't have the first clue that it was possible for a vehicle to take on so much water that it could pooch the engine. This knowledge may not have kept me from purchasing the vehicle (though it may have), but surely I wouldn't be driving through puddles if I was informed of the risk.


Almost as if you bought a car with basic or low-grade tires and then during the winter, skidded on an icy road and had a crash. Would you say that the dealer was at fault for not informing you that the tires were only basic and not high-performance?

Clearly I have a lot invested in this personally, but I don't think that is analogous. See above paragraph...

Medwards
26-03-2009, 04:09 PM
just wondering if you had the car mechanically inspected before you bought it from someone not related to the place you bought it at?

bulliver
26-03-2009, 08:36 PM
^ No, I did not have it inspected.

Transplanted_Edm
27-03-2009, 06:42 PM
I'm actually on your side. But I view this as more of a bad customer service type issue vs. a legal issue.

moahunter
28-03-2009, 09:03 PM
The problem I expect is that the dealer is not covered, so they don't want to pay. It is unfair though, for the dealer sold the vehicle (which they bought / inspected), and sold the waranty. It is their mistake.

I'm interested so many people recommend being "civil". I have had a few similar types of situations, and have found that being "civil" has not got me anywhere but other tactics have (it's not good bottling up all that stress either). It's not very pleasent (it won't win you any friends), but I think at some point, you have to make a scene, perhaps start with a threat to: go to tv, to put up the name of the dealer on internet blogs, to take to court, to put posters up in the neighborhood saying the dealer rips people off, lay a complaint at the better business bureau - whatever. If need be, go there and swear, and scare away other customers. Do what you have to do, being a nice guy is fine at first, but may end up just resulting in you getting walked over, like a lot of "nice" people are. But if you create enough stress for those who caused the problem, sooner or later, they will probably cave in. It reminds me of that episode of Faulty Towers, where the American customer comes along, and voices all the complaints that the English customers are too polite to ever mention.

bulliver
02-04-2009, 09:16 PM
^ I think the main point of being civil is in case the issue ends up in the courts.

---

So I heard back from my insurance adjuster yesterday, and my claim is being denied, specifically because of the cold air intake, of course.

Upon the advice of AMVIC I am tommorow mailing a formal letter of complaint I have just written to the dealer. If they still refuse to take any responsibility I will be pursuing legal remedies. I had really hoped it wouldn't come to this, but at this point my back is against the wall, and I have nothing to lose.

moahunter
02-04-2009, 10:14 PM
^ I think the main point of being civil is in case the issue ends up in the courts.
I think the amount of money here, may rule that option out, as may be just high enough to make it worthwhile for dealer to not accept small claims. If a proper court - legal fees could kill you, along with the written contracts.

If you don't want to deal with in person, make sure your formal letter includes a deadline for resolution, otherwise you will lay formal complaint with better business bureau, perhaps also mention media. If you go legalistic you will probably lose, the key is to focus on customer service reputation and fairness, it seems to me that's the one thing in your favour. Without a deadline and an indication you mean business, they'll just keep putting you off, knowing most people get tired and give up.

As my wife says to me when we get bad service (an asian trait not to take crap I guess) don't back down or seem a pushover, keep complaining, sometimes it doesn't pay to be nice.

Anyway, whatever you do, good luck, I think everyone wishes you that, nobody likes seeing somebody get ripped off, as it has happened to most of us at one time or another - just sad for you it is so much money.

etownboarder
02-04-2009, 11:25 PM
Time to call the troubleshooter.

Kirstine
05-04-2009, 10:11 PM
I used to work within the service department of a new car dealer, the majority of our cars were under manufacturer warranty but the one's that were being sold without had to be sold with at least 1 years other warranty. The fact of the matter is most dealers don't give a damn about their customers as long as they are making their money and when it comes to warranties it's complicated and this is where the problems arise.

Warranty is mean't to cover manufacture defaults and damage that isn't a result of wear and tear, aftermarket engine fittings usually invalidate it. Now the dealer you were dealing with should have known perfectly well this fact and the car should have been given a full examination before being sold especially considering it was used stock, so down to something they should have been able to spot your gonna be outta pocket and technically they sold you a car with an invalid warranty so they should be accepting some form of responsibility rather than just washing their hands of the situation.

Do you have any details of the warranty company so you could maybe speak with them directly? Or maybe talk to some sorta consumer advice?

Kirstine
05-04-2009, 10:29 PM
I'm just re-reading your post there and picked up on how much you paid for the warranty...honestly it's ridiculous, that part should have been picked up in the mechanical inspection done on the car before being sold if they even bothered to do one. If the service manager wasn't able to pick up on the part, a mechanic at least should have been able to and if that's not the case they should be off to take extra training.

You were mis-sold a car and a warranty that was useless from the minute you drove it from the showroom. Definately get yourself heard as that is not good customer service at all. I just wish I knew who the dealer was so I would know to avoid them in the future.

Bluestreak
05-04-2009, 11:22 PM
Wow, this is tough. Typically an extended warranty is only an increase of the time period, it doesn't necessariy mean that additional items are covered.

A CAI would have likely voided the original warranty, but again, as someone mentioned, why would they have sold you an extended one? IMO, likely just to hose you our of more money.

A CAI is designed to be as low as possible near the front bumper of a vehicle. Air is colder lower to the ground, and colder air = more power. It only takes a small amount of water to hydrolock your vehicle, which is what occured. It isn't an illegal part, it is a vehicle modification to increase air flow, so regardless the dealer would have noticed it and left it at that. If anything they would have inspected the cone filter and said "Hmm... it's clean", so then it passes inspection. Honestly though, they should have mentioned it to you as hydrolocking is a big risk with this mod.

Typically it is buyer beware. They are so many shady dealerships in this city that I hear a friend of mine is buying a car, I insist I go along with them to minimize the chance they'll get hosed.

bulliver
08-04-2009, 09:48 PM
Well, got a letter from my insurance co. today, nothing I didn't already know in it but this sentence caught my eye:

"Based on the inspection completed by our appraisal department, it has been confirmed that the modifications done to the vehicle caused the loss".

I sent my formal letters of complaint by registered mail on Monday, they must have got them today because the manager left a message on my machine. I'll phone tomorrow and see what he has to say.

And yes, Kirstine, I'm dying to mention the dealer but I am going to bite my tongue until this is resolved one way or another. Afterwards I will constantly pester anyone who will listen, and some who won't about the treatment I have received from this dealer.