Car dealership refuses to honor warranty on "lemon" vehicle, until FOX 46 steps in

When the engine blew on a used car sold weeks before, Rite 1 Auto in Huntersville initially refused to honor its own warranty - until FOX 46 stepped in.

"We're very happy that FOX 46 got results for us," said Michael Murrell, who purchased the white 2012 BMW "lemon," he said, for around $16,000 back in December. It was a gift for his son, Chris', 18th birthday.

"Oh I was excited," said Chris Murrell. "It was just my first car. I was just ready to drive."

As soon as he drove off the lot, the family says the check engine light came on. They drove back to the dealership.

"They would always tell us the sensors were just a little touchy," said Chris.

"They told me it was a generic code," his father echoed. "And not to worry about it."

The sensor kept coming on and the dealership told the family it was nothing, the family said. Less than two months after buying the car, the engine blew. 

"I was pretty pissed off," said Chris. 

Mechanics discovered metal in the car's oil and say the timing belt and engine were both shot. 

"It was probably due to a lack of oil changes in the car's life," said mechanic Tony Barbee, who inspected the car. 

The Murrel's say Right 1 refused to honor the three month, 3000 mile warranty they were promised. 

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"They told me we were out of warranty and there was nothing we could do about it, said Michael. 

The family tried calling repeatedly and even hired a lawyer to send a letter but got nowhere. Facing the prospect of paying thousands of dollars for a new engine, they turned to FOX 46 for help.

"They didn't honor their warranty or their word," said Michael. 

FOX 46 called Right 1. A man who refused to identify himself, except to say he was a "manager," insisted the BMW was sold "as is" with "zero implied warranty." 

After we pointed out the warranty was on their website and covered "internals of engine" and "transmission" and applied to "all our vehicles," the warranty was deleted from their website the next day. The link to the warranty now reads: "404 This page cannot be found.

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FOX 46 then called Jim Keffer, who owns the Keffer Auto Group, which includes a half dozen auto dealerships including Right 1. 

"They made the wrong call," Keffer admitted.

Keffer came to FOX 46's studio to admit the Murrell's complaint was "not handled properly." He says the warranty the family was given was supposed to have been discontinued and never should have been offered. Still, he says it should be honored.

"There's enough connection there that if an engine light was on when they're driving out it would be reasonable, and should be reasonable, that we should have taken care of that," said Keffer.

After looking into the matter, he has agreed to buy back the BMW from the Murrell's and fully refund their money. 

"Regardless of how you might look in public, on TV, whatever, you do the right thing," said Keffer. "And I have found, over time, if you do the right thing over the long haul it always works out."

It is working out for the Murrell's. The family will get their money back in full. As for Chris, his parents bought him a new car - with a written warranty. 

"When I talked to my lawyer he said, 'You are probably one in a million to get results of the magnitude you did," said Michael. 

North Carolina does have a "Lemon Law" but it only applies to new cars, not used ones. Next time you are looking to buy  a used car, experts recommend asking: 

  • What are the terms and length of the warranty?
  • What repair costs will the dealer pay?
  • Is the car sold "as is?"
  • Check the Carfaxx to see if its ever been in an accident.
  • Check for recalls
  • Consider getting a pre-purchase inspection by a mechanic.

It could save you money and prevent your dream car from turning into a nightmare. 

"Very ecstatic," said Michael. "Very happy that FOX 46 got us results."

Right 1 Auto Statement

Before Jim Keffer admitted Right 1 mishandled the Murrell's case and offered to make things right a "manager" who refused to give his name or be interviewed dictated the following statement to FOX 46 by phone:

"Right 1 Auto provides the customer with the full disclosure both while entering a contract with us, what, if any contract is implied with the sale of their vehicle. In this circumstance, the vehicle age and mileage put it into a category which we represent which is wholesale to the public to explain to the customer that they are purchasing an 'as is' vehicle that passes North Carolina state inspection and also our own internal inspection which carries a higher standard that the minimum it needed for the North Carolina state inspection law. 

At the point of sale, the Murrell's were offered the ability to purchase additional coverage and declined stating that they had resources that would handle servicing or repair needs in the future. They signed multiple forms clearly stating the representation of the sale being 'as is' and that upon returning to the dealership with an issue months later the dealership still made a very fair and reasonable offer to provide the Murrell's with all the costs of labor associated to their repair needed at no cost to them and that they would have to purchase the parts. And we still stand behind that offer." 

Tips from the Better Business Bureau:

If you are considering purchasing a used car from an independent used car lot or franchised dealer, the BBB suggests that you make sure that the car has a Federal Trade Commission (FTC) Buyer's Guide sticker. The FTC requires the business to equip cars with window sticker telling consumers who will pay for repairs after a sale. This Buyer's Guide should be part of any sales contract and must include the following:

  • The terms of any warranty, including its duration, systems covered, and the percentage of repair costs the dealer will pay.
  • A prominent statement saying that if the business is selling the car "as is," the consumer must pay for any repairs needed after the purchase. 
  • A suggestion that the consumer have the car inspected by the mechanic before buying the car.
  • Information about the availability of service contracts.
  • A suggestion that consumers ask the company to put all promises in writing. This rule covers all passenger cars, light duty trucks and vans. 

Buying a car from a private individual is different from buying from a dealer. This is due to the fact that private sales generally are not covered by the Used Car Rule or by implied warranties of state law. A private sale will be "as is" meaning the purchaser will have to pay for anything that goes wrong after the sale. 

Tips from the North Carolina Attorney General's Office:

  • Shop around to get the best deal.
  • A franchised dealer that sells both new and used cars is a good source for customers willing to pay top dollar. The dealer saves the late-model trade-ins for resale, while the less desirable vehicles are auctioned or sent to wholesalers. Franchised dealers have repair facilities and often provide warranties.
  • Used car dealers are a good source for older, higher mileage used cars. Some used car dealers do their own financing. While most used car dealers sell their cars "as is," some are willing to provide limited warranties. If a warranty is offered, see if it is guaranteed by the dealer or by an outside party. (The dealer may be less likely to sell a "problem" vehicle if he is directly obligated under a warranty). 
  • Banks and other lending institutions often sell repossessed vehicles.
  • Private owners sell their own used vehicles without any dealer mark-up. If you buy from a private owner, get copies of the vehicle's service records, references and records of original purchase. 
  • Set a budget and stick to it. Determine how much you can afford to spend on a used car and stick to it. If you plan to finance the car, compare rates from several lenders and make sure the monthly payment meets your budget. Don't get pressured into bigger payments that you can't afford. 
  • Make sure you're paying a fair price. Check resources at your local library or visit websites like www.nadaguides.com or www.edmunds.com to find out the market value of the make and model you are considering. 
  • Read the terms of the contract. If the deal is being financed by the auto dealership or a lender solicited by the dealer, make sure the contract states the interest rate, also known as the annual percentage rate (APR). It should also contain everything you and the dealer have agreed upon. Don't rely on verbal promises. Your signature confirms your agreement with the terms stated in the contract. Never sign a contract that contains blank spaces. 
  • A contract is binding. Unless the contract specifically says otherwise, you can't cancel it once you and the dealer have signed it. There is no three-day right to cancel nor any other "cooling off" period. Make sure the contract states that you can void the agreement and get back your down payment if the dealer does not meet any part of the agreement. 
  • Take a test drive. Drive the car under many different conditions, such as on hills, highways and in stop-and-go traffic. 
  • Inspect the car thoroughly. Consider taking the car to a mechanic hat you trust for a pre-purchase inspection prior to signing any sale document. Typically costing around $100, it has the potential to save you much more money if it turns out the ar has major mechanical problems. 
  • Ask whether the car has ever been in an accident. Get the answer in writing. Find out as much as possible about the car's prior history and examine its maintenance record. Be skeptical if the salesperson doesn't provide clear answers. 
  • Check on defects and recalls. Visit the National Highway Safety Administration online or call 1-888-DASH-2-DOT to see if the vehicle has had problems or recalls reported. 
  • Watch out for odometer fraud. It is illegal to tamper with an odometer. Check the current odometer reading against service records and previous mileage statements. Look for scratches on the odometer or the dashboard, misaligned digits, digits that stick or an odometer that fits loosely. 
  • Ask if the car is under warranty. If the manufacturer's original warranty on the car hasn't expired, ask to have that information stated clearly in your written contract.
  • Review offers for extended warranties or service contracts. Before you buy an extended warranty, from a dealer, consider existing warranty coverage, whether the car is likely to need repairs, and the costs of repairs compared to the costs of the service contract. 

Remember that the dealer must maintain the dealer's tags and insurance on the vehicle until the purchase transaction is finalized.
 

If you have a complaint about used car sales, contact the North Carolina Attorney General's office at 1-877-5-NO-SCAM.