High-tech 'lemon cars' drive need for new law, expert says

Canada needs a "lemon law" now more than ever as the increasing computerization of cars makes problem vehicles harder and costlier to repair, a consumer advocate says.

"The more high-tech cars become, the more lemons you see because there's so much more to go wrong," Phil Edmonston, author of the Lemon-Aid car guides, said in an interview with CBC's Marketplace.

Edmonston estimates about one in 10 cars are irreparable and should be replaced.

"The main reason people need a lemon law now is cars are getting much, much more complicated than ever before," he added.

Electronics are sensitive to vehicle vibrations, extreme temperature fluctuations and moisture, Edmonston cautions.

"This is what causes your lights to fail often or causes a vehicle to stall out," said Edmonston. "Then they have to find what is the cause, and it's very difficult tracing these electrical problems."

In the U.S., state and federal laws exist that protect consumers who buy a so-called "lemon," a car found after purchase to be faulty beyond repair.

In Canada, two provinces — Manitoba and Nova Scotia — have introduced legislation requiring used car dealers to disclose whether a car has been deemed a lemon elsewhere.

But there's no legislation that defines what a lemon is or deals with new vehicles that turn out to have serious defects.

'Scariest day'

Crystal Walls of Quesnel, B.C., first noticed a critical problem with her vehicle one month after buying the new Dodge Journey for $26,000 on Aug. 6, 2011.

While driving her 18-month-old son on a highway on Sept. 9, the sports utility vehicle abruptly stalled.

"It just went completely dead," Walls said. "I kinda hit the gravel shoulder. … 'Oh my god!' is what I thought, because I had a semi [truck] behind me."

"That was most definitely the scariest day of my life."

Walls took the new SUV into the dealership, but the problems continued. The B.C. mother estimates the vehicle has stalled nearly 25 times over a year, causing her to leave it unused in the driveway most days out of fear.

CBC'S Marketplace had a veteran mechanic, Farid Kanji, spend hours driving the vehicle and examining it by checking connectors, service records and the vehicle computer system.

Most troubling among Kanji's findings was that the dealership spent just 18 minutes on the SUV after the first stall, according to service records. Also, the SUV's computer, which monitors drivability functions, failed to store the codes that inform a mechanic about whether systems such as brakes are working properly.

"You should demand to get a refund on the vehicle or an exchange on the vehicle," Kanji concluded.

'Whose problem is it?'

Both the local dealership, Regency Chrysler in Quesnel, B.C., and the vehicle's maker, Chrysler Canada, refused to take responsibility, said Walls.

"[Chrysler Canada tells] me it’s the dealership's problem. It’s not their problem," said Walls. "I call the dealership and the dealership says 100 per cent that it's Chrysler Canada’s problem. … Well, whose problem is it?"

'The lemon law is a big stick. … And no one wants to get whacked by this big stick.'  —Phil Edmonston

In a written statement, Chrysler Canada said they "worked extensively with the customer and dealer" to resolve the issue, but added their assessment found the vehicle "exceeds all applicable safety standards."

Regency Chrysler general manager Evelyn Bouchard told Marketplace host Erica Johnson the owner hadn't "done enough with us to problem-solve this." However, after CBC's Marketplace got involved in the case, the local dealership offered to buy Walls' Dodge Journey and sell her a new Dodge Caravan at the same price.

Consumer author Edmonston says the case demonstrates Canada's need for "lemon laws" to protect those who buy new cars that end up being defective.

"A lemon law defines what is a lemon," said Edmonston. "It takes more than three times to repair? It's a lemon."

Lemon laws a 'big stick'

Introducing a lemon law similar to those in the United States would also define the obligations of car manufacturers and stipulate when a buyer is entitled to a refund or replacement.

"The lemon law is a big stick.  Whether you wield it or not, all the players in the car industry know it’s there.  And no one wants to get whacked by this big stick."

B.C.'s minister responsible for consumer affairs, Shirley Bond, declined a request for an interview with CBC's Marketplace.

When the show tracked her down, Bond said that there's no current lemon law legislation.

"We are looking at whatever options are appropriate for British Columbia. We'll continue to do that," added Bond.

In the United States, lemon laws vary by state. California, which introduced its 'lemon car' legislation in 1983, protects buyers who discover defects in their new or used cars when safety, use or value is affected.

If the manufacturer is unable to fix the problem vehicle after a reasonable number of attempts, they must replace or repurchase it.

Walls' case an easy win in California

Christopher Leyva, who lives in Los Angeles, benefitted from the clarity of the lemon law in California. Shortly after buying his vehicle, the car stalled while driving on the freeway.

"I was going 65 miles per hour and the car started making these noises and then it just completely stopped," said Leyva. "Luckily, I was near the ramp, the exit ramp. I pulled over and that, that really freaked me out."

When repairs didn't fix the problem, Leyva hired a lawyer and got a full refund. "Win or lose, I didn't pay a thing," he said.

The lawyer who represented the L.A. car owner, Norman Taylor, says Walls' B.C. case would be a "dream case" in California.

"In California I would take this case in a heartbeat," said Taylor. "And I can almost assure you that Chrysler would step up and settle this case very quickly."

Canadian consumers can take an auto manufacturer to small claims court to claim less than $25,000, but the process is costly.

A free national arbitration process, called the Canadian Motor Vehicle Arbitration Process (CAMVAP), exists to help consumers try to resolve vehicle defect issues with manufacturers. If no resolution can be found, the buyer can apply for a hearing. A ruling in the consumer's favour can result in a refund for repairs or a vehicle buy back.

But Edmonston is critical of the process.

"It hasn’t worked all that well because it doesn’t have a prevention aspect like you would have with a lemon law," said Edmonston.

"We need something to show the manufacturers and dealers this is what your responsibility is."

Watch Marketplace's episode, Getting Squeezed, Friday at 8 p.m. (8:30 p.m. in Newfoundland and Labrador) to see what happens if you buy a faulty car.