Lemon Law and Spot Delivery Law in Maryland

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If I were on the jury, I would work out the substantiality of the nature of the defect and the reasonableness of the number of attempts allowed by the consumer by following the guidelines of Maryland’s lemon law. As the Council of Better Business Bureaus (2009) shows, “the lemon law covers any defect or condition that is covered by the warranty, presently exists, and substantially impairs the use and market value of the motor vehicle to the consumer” (p. 1). Moreover, there is legal precedent for these parameters, set by Laing v. Volkswagen of America, Inc., 180 Md. App. 136 (2008), Zitterbart v. American Suzuki Motor Corp., 495 A.2d 372 (Md. Ct. Spec. App. 2008), and Evans v. General Motors Corp., 459 F.Supp. 2d 407 (D. Md. 2006).

In other words, to determine whether or not the nature of the defect is substantial, it should first be determined whether the defect is covered by the warranty. It should then be determined that the defect presently exists, and it should be shown that the defect substantially impairs the use and market value of the vehicle to the consumer. As substantial is a rather qualitative term and somewhat subjective at that, the first two conditions are the most important ones and should bear the bulk of consideration. If the owner feels that the defect is also substantial enough that the market value of the vehicle is impacted, this should be accepted at face value as there is no definite metric available to determine precisely what the term “substantially” means in this case.
The “reasonableness” of the number of attempts allowed by the consumer is rather clear under lemon law, which states that 4 attempts to fix the defect must be made and the car must be out of commission for no more than 30 days. If there have not been 4 attempts by the manufacturer made to fix the defect or the car has not been out of commission for more than 30 days as a result of this work, then the reasonableness according to the lemon law cannot be said to be maintained.

Thus, I would work out these two points by adhering to a close reading of the lemon law as it is written. It clearly provides the parameters for evaluating both of these concerns, and the only real issue is with the term “substantially,” but that is effectively covered by the first two conditions being met—those being the defect should be covered under warranty and should be still existing—i.e., it was not fixed—at least not within the specified amount of time required under the law.

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It would be possible to make a law that avoids or regulates the bait-and-switch problem without banning spot-deliveries out right. The law could stipulate that dealers declare up front that there may be a range of rates that they may have to go through before they can find financing for the consumer, and this range should include those much higher rates that are likely to apply in the consumer’s case. This way the consumer can know up front and ahead of time that even if the dealer cannot find financing terms at the lower interest rates that would be more affordable, the dealer may be able to find financing terms at a higher rate, though it would be more expensive for the consumer. Simply by making this information known to the consumer ahead of time prevents the bait-and-switch tactic from being applied, because the consumer is forewarned that the higher interest rates may be the only ones that the dealer can find.

This law of stipulating that the dealer be up front and provide a range in which financing terms might be found for the consumer also benefits the dealer as well. It gives the dealer the ability to say to the consumer, “Look, we shopped it around and these higher rates are the only ones that are coming back for you—but we told you up front that this might be the case and you agreed to go ahead with the sale, so this is where we are.” The consumer is already locked in to agreeing to the higher rates as a pre-condition of the sale, and since the consumer has already been warned that this higher range might be the only way to secure financing and has still agreed to the sale, the higher financing will not present a problem.

Thus, such a law would protect the consumer and the seller, as it promotes transparency and honesty in the transaction. The consumer should be aware of the fact that he or she is not in a prime position to obtain a good rate for whatever reason—whether it is bad credit, lack of equity, no cash down, etc. The seller should also be aware that consumers do not want to feel like they are being cheated or taken advantage of by being told that the dealer will shop around for a low rate only to come back and say that the only rate to be found is much higher. The dealer should have a very good idea of what sort of rates are available for every type of consumer and thus should not try to beat around the bush or keep the truth hidden just to increase their odds of securing a sale. A consumer would likely rather know up front what the realistic odds are of obtaining a low rate. If the consumer needs or wants the car bad enough, the higher rate is not likely to be that big of an obstacle and the honesty and transparency of the transaction will be much more appreciated. This law would put an end to the bait-and-switch characteristics of the spot delivery law and keep the industry that much more regulated, balanced, transparent and above board overall. For this reason, such a law would be a very good thing for all stakeholders.

References
Council of Better Business Bureaus. (2009). Standards of the Maryland lemon law.
Retrieved from https://www.bbb.org/us/Storage/16/Documents/BBBAutoLine/MD-LLsummary.pdf