Secret Warranty Law

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 What Are Secret Warranties?

Secret warranties, also known as after-warranty assistance (“AWA”) or goodwill assistance, is a term that refers to a little-known program that many vehicle manufacturers have. Under secret warranty programs, manufacturers offer to pay for repairs for defective parts, even after the factory warranty period has expired, as long as the car owner asks for such assistance.

Secret warranty programs allow a car company to avoid paying certain costs associated with having to offer car warranty programs to every customer. As such, secret warranty programs are typically considered inherently unfair to consumers and are actually illegal under several state’s warranty laws. Secret warranty programs being illegal in most states is a direct result of how secret warranty programs arise.

When a manufacturer knows it has a mechanical issue with a particular car model, then that manufacturer may issue an internal service bulletin that authorizes the free repair of the problem. However, the vehicle owner may not be aware of the service bulletin, and the seller of the vehicle may not bring the vehicle owner’s attention to the necessity of the repairs.

Further, the free repairs can only be done by notifying their local dealership of the service bulletin and submitting a request for the free repairs. It is important to note that secret warranty programs only apply to repairs that would not call for a recall. This is because they do not affect the overall safety of the vehicle. If the safety of the vehicle is affected, then the vehicle owner will be notified of the recall.

It is also important to note that if a secret warranty program exists for a vehicle issue, then the repairs may not be automatic. This means that the vehicle owner may have to meet certain criteria for the free repairs to be made. For example, the vehicle owner may have to show that their vehicle has been properly cared for.

Additionally, they will have to take the vehicle to an authorized dealer designated by the vehicle manufacturer. Finally, there may also be a time limit on the secret warranty program, similar to other warranties.

Part of My Car Failed After My Factory Warranty Expired, Will an AWA Pay?

If part of your car has failed after the factory warranty expired, then you may still be eligible for after-warranty assistance. However, as mentioned above, there are many restrictions that may apply that prevent an AWA program from paying for the repairs to be made. Examples of restrictions may include:

  • The vehicle owner cannot have an extended warranty or other vehicle coverage that would cover the costs of repairs;
  • The original owner must still be in possession of the car;
  • Not every vehicle manufacturer offers AWA, and the repairs must be made at and by an authorized dealership;
  • Time and mileage restrictions on the vehicle may apply;
  • The car must be well maintained by the vehicle owner.

In many cases, a legal dispute over the restrictions and requirements for the AWA program may arise. In such cases, legal representation may be needed to address and resolve disputes over the warranty clauses. This is especially true if there have been changes to the restrictions of the program after the agreement was already made.

Are Secret Warranties Nationwide or Regional Programs?

In general, secret warranties are often regional programs. Additionally, secret warranty programs are largely left to the discretion of the regional dealerships that actually interact with the consumers who purchase the vehicles in their region.

As such, determining how to approach a particular warranty policy or company practice may differ from case to case. Therefore, the assistance of a legal professional may be needed to determine how warranty laws will apply in a specific jurisdiction.

There are certain states, including California, Connecticut, Maryland, Virginia, and Wisconsin, that actually require car owners to be notified of any secret warranties. However, consumers in other regions or states may still be able to find out if a secret warranty is available in their region through quick research on recalls and safety defects involving their vehicles. If there is a notice concerning a repair for a consumer’s vehicle, then they should take that notice to their dealership and demand the necessary repairs be completed.

It is important to also note that secret warranties may be barred in certain regions. For example, in the state of Virginia, the Motor Vehicle Manufacturers’ Warranty Adjustment Act prohibits carmakers from offering secret warranties to consumers. The Act requires manufacturers to inform consumers of any adjustment program applicable to their cars, similar to the process for informing consumers about recalls.

This means that if a consumer pays for a repair on their car after being denied assistance by the manufacturer and later finds out that there was an after-warranty assistance program that was in place at the time, then they may have cause for legal action against the vehicle manufacturer.

How Can I Find Out if My Car’s Defect Is Covered Under a Secret Warranty?

As mentioned above, it may be difficult to find out if your car’s defect is covered under a secret warranty. In general, the best way to find out is to check the service bulletins for your car’s make and model. These service bulletins are published by the car’s manufacturer and are sent to dealerships. The bulletin may also give the dealerships the authority to fix the problem free of charge. However, as noted above, the vehicle owner is required to first make the request.

Also, some secret warranty laws may require manufacturers or dealerships to disclose their warranties through direct notice given to the affected owners. This often includes information about the warranty terms, reimbursement amounts, repairs, and other issues involving the specific vehicle.

How Do Secret Warranties Differ From Recalls and Lemon Laws?

As mentioned above, if the necessary repairs affect the vehicle’s safety, then the car manufacturers will publicize them either online or by sending notices directly to the car owners. These publications are known as recalls.

Recalls serve the important function of notifying consumers about dangerous defects regarding a product that they purchased. As a vehicle owner, if you receive a recall notice, then you should immediately call a mechanic to schedule the repair. Importantly, repairs made in relation to a vehicle recall should be performed at no cost to the vehicle owner. Recalls differ from a secret warranty program, as the repairs are necessary to ensure the safety of the vehicle.

In other cases, a new car may keep having problem after problem, and no amount of repairs can make the car function properly. These vehicles may be known as lemons. Vehicle owners who are found to have purchased a lemon are often able to get the vehicle replaced by a working vehicle under state and federal laws concerning lemons. In general, a car is considered a lemon if the mechanical defect cannot be repaired after multiple attempts or if the car was of use for a specified period of time under the first 10,000 or other specified mileage of use.

Importantly, it is often the vehicle owner’s burden to prove that they purchased a lemon before a dealership will agree to exchange the vehicle for a working model. As such, car owners should always keep detailed records of repairs made and mechanical failures, including dates and mileage at the time of failure.

Do I Need a Lawyer for My Secret Warranty Issue?

As can be seen, a secret warranty may be able to assist you in covering certain repairs on your vehicle. Thus, if you find documentation of a secret warranty and the dealership or manufacturer of your car refuses to acknowledge that it exists, it is important not to give up on holding the manufacturer liable for the repairs.

In most cases, if you continue to contact the manufacturer regarding the secret warranty program, they will pay for an authorized dealership to make the necessary repairs. However, if the manufacturer does not cover the repairs, you may be able to civilly sue them for the cost of the repairs and other damages. In such cases, an experienced consumer lawyer can help you recover for the cost of repairs and other damages you suffered as a result of the manufacturer not paying for the repairs.

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