Repossessed Car? Learn Your Rights


Each year 1-800-MY-LEMON receives calls from new clients
requesting lemon law help for their repossessed car. The rate of repossessions are increasing at an alarming rate, especially in light of the poor economy. If your car has been repossessed, you have rights which could help you avoid or limit the cost of the repossession.

We are happy to post the following repossession information courtesy of our good friend, and fellow Pennsylvania consumer law attorney, William Bensley.

Repossessions happen to good, responsible people every day. They get far less media attention than home foreclosures, but they are just as disruptive. Moreover, the same abusive practices that have plagued mortgage lending have plagued car sales and lending, and now plague repossessions.

The good news is that repossessions are highly regulated, primarily under state law. Everyone should note that the law may very slightly from state to state. This article pertains strictly to Pennsylvania law.

In Pennsylvania, if the bank (creditor), debt collector or repossessor breaks the rules, then the repossession victim may be able to get her car back, get out from under the alleged debt, or even get the bank, debt collector or repossessor to pay her.

It is highly advisable that any repossession victim contact a qualified attorney immediately to evaluate her possible claims. Most attorneys will provide free evaluations. Most evaluations can be completed over the telephone in under 30 minutes.

Let’s start at the beginning. Most vehicles are purchased on credit. Until the buyer makes her last payment, the seller/creditor retains the right to “repossess” (take the car back), if the buyer “defaults” (breaches the agreement). The buyer’s and creditor’s rights are spelled out in the finance purchase contract (the big 8.5” x 14” or 8.5” x 17” contract) and state law.

A default can occur in a number of circumstances. The most common is where the consumer does not make payments as agreed. A default can also occur, if the consumer allows insurance on the car to lapse or subjects the car to seizure by using it for illegal purposes.

The first thing that a consumer must understand is that the creditor may not have the right to repossess the vehicle. Under state and federal law, the finance contract holder is responsible for the seller’s wrongdoing. This is true, even where the seller/creditor sells the finance purchase agreement. In short, if the dealer arranged the financing, then the bank is liable for the dealer’s wrongdoing.

If dealer tricked the consumer into buying the vehicle, if the vehicle is defective, if the seller misrepresented any significant fact, if the seller did not fully or accurately disclose the vehicle’s prior use, then the contract may be unenforceable. Not only may the creditor not repossess the vehicle, but may be responsible for paying the consumer for any harm caused by the seller’s wrongdoing.

The second thing that a consumer must understand is that if the creditor agreed to accept late payments or to change the payment due date, then the terms of the original contract may no longer apply. Changes may be made orally, in writing, or simply by accepting a late payment. The creditor can’t agree to accept a payment and not to repossess and then go ahead and repossess. These determinations are extremely fact specific and will depend on exactly what was said by the bank and the consumer.

There are three types of repossessions: (1) Voluntary; (2) Self-Help; (3) Court Ordered.

Voluntary repossessions are self-explanatory. The consumer gives the car back by either bringing the car back to the dealer or handing the keys to the repossessor. It’s important to know that a voluntary repossession is just as damaging to your credit rating as any other type of repossession.

Self-Help repossessions are a little different. This is where the repossessor takes the car, often in the dead of night. They may not “breach the peace.” They may not enter a home, building or enclosed property without prior consent. They may enter non-enclosed private property, but if asked to leave, then they must go. They cannot argue, insult, or use force or threats of force. They cannot threaten to call the police. If a consumer objects, they cannot continue to take the car — even if it is parked on the street. They cannot bring the police as an implied use of force.

If the repossessor breaches the peace, then the repossessor loses its right to take the car. The repossessor may have to pay the consumer statutorily required compensation. If the repossessor still takes the vehicle, then it is an unlawful repossession and a form of theft entitling the consumer to additional compensation.

Court Ordered repossessions are where the repossessor goes to court and gets an Order requiring the consumer to give the car back. With a court order, the repossessor can enter private property, even if the property owner objects, and take the car. If a repossessor has to get a court order, it may charge the consumer for the time and effort.

Consumers often have questions about notice. Prior notice is not required to repossess a car in Pennsylvania. Twenty-one day prior written notice is required to repossess a mobile home.

A repossessor must provide immediate notice to the consumer after the repossession. The notice must be delivered in person or by registered mail.

The notice must be sent no less than 15 days before the car is sold. The notice must provide the following information:
(1) identify the consumer (debtor), the car, and the location of the car.
(2) provide the time, place and manner that the car will be sold.
(3) provide an itemized statement of amounts owed, including any repossession charges.
(4) provide a list and the location of any personal property contained in the car –which must be kept for 30 days.
(5) explain how to redeem the contract — pay the full outstanding debt to get the car back.
(6) explain whether the opportunity to reinstate the contract is being offered — pay the overdue amounts to get the car back.

Creditors must give notice of the repossession to the local or state police within 24 hours
Creditors usually will resell the car. The sale price will be applied to reduce the amount of money still claimed owed. The consumer will be responsible for balance plus reasonable repossession and reselling charges.

The sale may be public or private, but must be conducted in a commercially reasonable manner. If public, the consumer can and should attend and take photos of the car. If the car was not prepared for sale appropriately, then the sale may not have been commercially reasonable. If the sale is not done in a commercially reasonable manner, then the creditor may not be entitled to any further payment.

It bears repeating that any repossession victim should seek competent legal counsel. Violations are common. Banks, dealers, debt collectors and repossessors will only follow the law, if they are forced.

The 2009 Top 10 Most Fuel Efficient Cars


At 1-800-MY-LEMON, Pennsylvania and New Jersey’s Lemon Law Attorneys, we are constantly asked for advice regarding the best cars to purchase. In order to assist both our NJ and PA Lemon Law clients, as well as many of our lemon law blog readers, we are providing The Enviromental Protection Agency’s 2009 EPA Fuel Economy Guide. Leading the list is the Toyota Prius, with a combined 48 city and highway performance. Below is the list of the The 2009 Top 10 Most Fuel Efficient Cars

By City:

1.) Toyota Prius: 48
2.) Honda Civic Hybrid: 40
3.) Nissan Altima Hybrid: 35
4.) Ford Escape/Mariner Hybrid 2WD: 34
5.) Smart Fortwo: 33
Toyota Camry Hybrid: 33
7.) Volkswagen Jetta/SportWagen Diesel: 30
8.) Toyota Yaris: 29
9.) Mini Cooper: 28
Honda FIt: 28

By Highway

1.) Toyota Prius: 45
Honda Civic Hybrid: 45
3.) Volkswagen Jetta/SportWagen Diesel: 41
Smart Fortwo: 41
5.) Chevy Cobalt/Pontiac G5 XFE: 37
Mini Cooper: 37
7.) Toyota Yaris: 36
Honda Civic/Civic CNG: 36
9.) Chevy Cobalt/Pontiac G5: 35
Toyota Corolla/Honda Fit: 35
Ford Focus: 35

The Most Fuel Efficient Cars By Category
This list covers the most fuel efficient cars by EPA category.

Two-Seater Cars
Smart ForTwo: 33/41

Minicompact Cars
Mini Cooper: 28/37

Compact Cars
Honda Civic Hybrid: 40/45

Midsize Cars
Toyota Prius Hybrid: 48/45

Small Station Wagons
Volkswagen Jetta SportWagen Diesel: 30/41

Midsize Station Wagons
Kia Rondo: 20/27

Small Pickup Trucks
Ford Ranger 2WD: 21/26

Standard Pickup Trucks
Chevrolet C15 Silverado/GMC Sierra Hybrid: 21/22

Cargo Vans
Chevrolet/GMC G1500: 15/20

Minivans
Mazda Mazda5: 22/28

Sport Utility Vehicles
Ford Escape/Mercury Mariner/Mazda Tribute Hybrid 2WD: 34/31

[Source: FuelEconomy.gov]

Oklahoma seeks to waive usage fees for lemon car replacements

For consumers of new defective cars in Oklahoma there is very good news in this difficult economy. The Oklahoma House has passed a bill to strengthen it’s state lemon law.

Specifically Oklahoma has decided to reduce the amount a consumer has to pay in usage fee when a car is repurchased by the manufacturer. And in cases where a consumer is provided a new car for his/her lemon, the state prohibits a manufacturer from charging a mileage fee. Thus the consumer pays nothing to the manufacturer for replacing the lemon car.

1-800-MY-LEMON applauds this change and believes that this waiver of the usage fee for replaced cars is badly needed in other states, such as Pennsylvania and New Jersey.

Each year our lemon law firm represents thousands of Pennsylvania, New Jersey, New York and Delaware consumers for their lemon law claims. Many of our cases settle for a replacement cars requiring our clients to spend out of pocket money in the form of paying a usage fee. In a good economy our clients are able to comply with the usage fee requirement. However in trying times, such as today’s recession, the usage fee requirement adds an unreasonable burden on consumers seeking a lemon law replacement car, especially the ones who have lost their jobs or have had their salary reduced.

1-800-MY-LEMON recommends the change to the usage fee for The Pennsylvania Lemon Law and New Jersey Lemon Law, since it would put more money back into the pockets of the consumers.

1-800-MY-LEMON heard again on WMMR’s Preston and Steve Show

CLICK HERE to listen to WMMR’s Preston and Steve talking about our lemon law firm and our famous 1-800-MY-LEMON jingle.

Preston and Steve WMMR morning show is the number one rated show in Philadelphia with average listenership of 350,000 per week.

Preston and Steve Sang our Lemon Law Jingle on WMMR!

Many thanks to everyone at WMMR’s Preston and Steve show for singing our famous lemon law jingle last Thursday. The staff and attorneys at 1-800-MY-LEMON, listen to the show daily and we were so excited to hear our famous jingle on the show.

Toyota Details Plan to Comply with Lemon Law Requirements to Fix Acceleration Defect

Toyota has announced the list of vehicles involved in its largest recall ever recall for a safety defect causing unexpected acceleration attributed to floor mat jamming. The recall affects the 2007 to 2010 MY (model year) Camry, 2005 to 2010 MY Avalon, 2004 to 2009 MY Prius, 2005 to 2010 MY Tacoma, 2007 to 2010 MY Tundra, 2007 to 2010 MY ES350, 2006 to 2010 MY IS250, and 2006 to 2010 MY IS 350.

In their announcement, Toyota describes the proposed remedies as follows:
1. The shape of the accelerator pedal will be reconfigured to address the risk of floor mat entrapment, even when an older-design all-weather floor mat or other inappropriate floor mat is improperly attached, or is placed on top of another floor mat. For the ES350, Camry, and Avalon models involved, the shape of the floor surface underneath will also be reconfigured to increase the space between the accelerator pedal and the floor.

2. Vehicles with any genuine Toyota or Lexus accessory all-weather floor mat will be provided with newly-designed replacement driver- and front passenger-side all-weather floor mats.

An additional change includes the installation of a braking system that will cut power to the engine and override the acceleration if the accelerator and brake are pressed simultaneously in the Camry, Avalon and Lexus ES 350, IS350, and IS 250.

As required by the consumer lemon laws, Toyota will remedy the problem and begin sending out safety notifications and recall instructions to vehicle owners and dealerships. The first of these mailings commenced on October 30. Dealerships will receive the required training and be ready to modify existing brake pedals in early 2010. As new pedals are manufactured with a modified shape, owners will have the option of getting new pedals installed in their vehicles. The braking override will become standard equipment throughout all Toyota product lines starting in January 2010.

“Toyota needs to take swift action to address these serious safety defects,” says lemon law attorney David Gorberg. “Everyone is put at risk with any delay in taking the appropriate steps to remedy problems relating to the steering or braking of a vehicle.”

Owners with questions about the recall are asked to visit www.toyota.com or www.lexus.com or contact the Toyota Customer Experience Center at 1-800-331-4331 or Lexus Customer Assistance at 1-800-255-3987.

“Vehicle owners are entitled to have these issues fixed by the manufacturer under the lemon law. Toyota is wise to do so in the interest of customer safety and loyalty. Any owners of the vehicles on Toyota’s recall list should schedule repairs at their earliest convenience to prevent any potential injuries, ” recommends Gorberg.

For owners of vehicles who have already suffered an accident or a loss of use of their vehicle due to a safety defect, recourse may be available under state lemon law guidelines.

Lemon Law Attorneys Named 2008 Pennsylvania Rising Stars

Congratulations to lemon law attorneys Ms. Tammy Schmitt, and Ms. Laura Applegate for being named “2008 Pennsylvania Rising Stars” as seen in Philadelphia Magazine, and Law and Politics Magazine.

Law & Politics magazine performs the polling, research and selection of Rising Stars in a process designed to identify outstanding Pennsylvania lawyers who have demonstrated superior professional potential. Pennsylvania Super Lawyers, chosen by their peers as being among the top five percent of state-wide attorneys, nominate the best up-and-coming attorneys who are age 40 and under, or who have been practicing 10 years or less. Attorneys Schmitt and Applegate were honored in the December 2008 issue of Pennsylvania Super Lawyers – Rising Stars Edition, as well as the December 2008 edition of Philadelphia Magazine.

The Pennsylvania Lemon Law Explained

Earlier this fall we put together a simple one page PDF covering the very basics of the Pennsylvania state lemon law entitled The PA Lemon Law Explained. The document consists of just a few checklist items to help determine whether or not your car may be classified as a lemon and also includes answers to some commonly asked questions about the lemon law in Pennsylvania. Feel free to download, print it and use it as a guide.

If you have more specific questions of concerns, call us at 1-800-MYLEMON or read our other Pennsylvania lemon law information.

Relocation of Our Corporate Office


1-800-MY-LEMON, Pennsylvania and New Jersey’s Lemon Law Attorneys, announces that it will relocate it’s corporate headquarters from Philadelphia to the Times Building located at Suburban Square, Ardmore, Pennsylvania.

“We are making this move to take advantage of an area that combines a strong talent pool and resources, with a cost-effective environment for our law firm” said David J. Gorberg, Esquire

The lemon law firm anticipates relocation of it’s headquarters to be complete by January 1, 2009.

5 Super Simple Tips to Get a Great Deal on a New Car

  1. Set a Budget and Stick to It – Start your car hunt by deciding on a maximum amount or monthly and down payment that you’d be willing to pay. With a max price in mind you can begin narrowing down the type of car that you’re looking for and you can use this number to your advantage as you negotiate prices later.
  2. Research Cars and Prices Online – There are a bunch of websites that provide an incredible amount of free, no pressure information on cars. Automotive.com, for example, has reviews, prices, photos and more on both new cars and used cars, depending on which you’re in the market for. Take the time to do your research online before you go to any dealership and you’ll be rewarded when you finally come face to face with a salesperson. Once you’ve narrowed your list of cars down to just a handful then print out the quote that you received and the vehicle’s invoice price and bring these with you to the dealership.
  3. Wait Until the End of the Month to Visit the Dealer – Car salesmen and dealerships have quotas to meet at the end of the month so, after researching prices online, wait until the last week of the month to go visit the dealer. Shopping at the end of the month alone could save you a few thousand on a car.
  4. Avoid Trading In Your Car – Without fail dealerships will try to low ball you on any trade-in value. On top of that, trading in your car at the dealership adds another layer of complexity to getting a new car. While it may be more convenient to trade-in, almost always you’ll make a few thousand extra dollars by selling your used car independently. To get a better idea on your current car’s value be sure to consult the Kelley Blue Book.
  5. Negotiate Like a Pro – For most, negotiation is not fun and especially not when you’re dealing with a car salesman. However, it’s not hard to walk in with a few tricks up your sleeve:

    • Don’t mention money until the salesperson tells you how much the car would cost. Once they say a price, then you know your negotiation starting point.
    • Once the initial price is stated, begin working the price downward toward the invoice price from online. Often you’ll be able to bring the price down to that price over even a bit lower.
    • Be prepared for an onslaught of “I can get the price there if you…” responses. Hold steady on the price, if you feel uncomfortable just say “my spouse won’t let me spend more than…” and stand firm on that number.
    • Turn and walk out if the salesperson can’t get you the price that you want. Odds are the salesperson will chase you down just before you get to the door. If not, you can always go back the next day if you really decide the price is worth it.