, V .3 DALLAS PUBLIC LIBRARY X80395593 Documents RERECE 2003 - Annual Report Texas Lemon Law Anniversary ofo lelylolla i y 0ou Consumer Affairs Section http://www.dot.state.tx.us F DepaTexas rtment of Transportation lemonlaw@ dot. state.tx.us ' Texas Department of Transportation Greetings: Since the inception of the Texas Lemon Law in 1983, many program accomplishments have been achieved. As the year 2003 marks the twentieth anniversary of the program, we proudly celebrate these accomplishments. Included in this annual report is a special section highlighting the program results from the past decade. Since 1993, it is estimated that the Lemon Law generated over 72 million dollars in relief to Texas consumers through the processing of 17,887 complaints. The 2003 report, which is the twelfth annual report published on the Lemon Law, includes information on the program results, geographic distribution of complaints filed, defects reported, complaints filed, complaints closed, settlements, and vehicles ordered repurchased or replaced. Shortly after the Lemon Law was enacted, a court challenge stalled enforcement of the law. However, in 1985 a federal appeals court upheld its validity. Since then, several amendments have been made to the law by the Texas Legislature. The 1991 amendments included increasing the time to file a complaint from 18 months to 30 months, expanding the relief to include incidental expenses and adding a disclosure requirement for reacquired vehicles. In 1992 the Texas Motor Vehicle Commission, which administered the Lemon Law, was renamed the Motor Vehicle Board (MVB) and merged with the Texas Department of Transportation. In 1997, the Legislature expanded the law by adding towable recreational vehicles (TRVs). This made Texas the first state to include TRVs in its Lemon Law. The MVB is charged with the promulgation of rule making for enforcement of the Lemon Law. In 1998, the MVB amended the Lemon Law Rules to require that a decal be affixed to the windshield of reacquired vehicles. In 2000, the MVB expanded the disclosure requirement to include vehicles reacquired as a result of settlements and lemon vehicles transferred to Texas for resale. In an effort to hinder what is known in the industry as "lemon laundering" or "title washing" and facilitate the MVB's enforcement of the disclosure requirements, the Lemon Law Rules were amended to require that a manufacturer, distributor, or converter re-title a vehicle reacquired under the Lemon Law. The Vehicle Titles and Registration Division now annotates the title history of vehicles reacquired in Texas as well as vehicles reacquired in another state and transferred to Texas for resale. Most recently, the MVB amended the rules to authorize hearings by written submission or by telephone. During the 77 th legislative session, the legislature enacted Chapter 2301 of the Occupations Code which was effective June 1, 2003. Chapter 2301 is a codification of the Texas Motor Vehicle Commission Code which contains the Lemon Law. The purpose of the codification is to make the law more accessible, understandable and usable without altering its sense, meaning, or effect. The customer satisfaction survey continues to indicate that the vast majority of Texas citizens who have used the Lemon Law consider it to be an effective remedy in resolving a complaint involving a problem vehicle. Feel free to contact the Motor Vehicle Division staff to suggest improvements in the program. Sincerely, Kevin D. Pagan Chairman, Motor Vehicle Board September 2004 1 TEXAS DEPARTMENT OF TRANSPORTATION MOTOR VEHICLE BOARD Kevin D. Pagan, Chair McAllen Jim Leonard, Vice Chair Abilene Mike Arismendez, Jr. Lubbock Frank Breazeale Gilmer Stuart Hamilton San Antonio Patricia Fincher Harless Houston Jana Howden Austin Cynthia Tyson Jenkins Irving Roger Williams Weatherford j -E I I TEXAS DEPARTMENT OF TRANSPORTATION MOTOR VEHICLE DIVISION CONSUMER AFFAIRS SECTION Post Office Box 2293 Austin, Texas 78768-2293 Brett Bray Division Director L. David Brunke Director - Consumer Affairs H. Glenn Cortez W. Kenneth Herring Richard D. Russell Administrative Law Judges Tim Bargsley John DuFour Robert Shrawder Case Advisors/Automotive Experts Anne Walthall Support Staff Supervisor Jose Catache Robin McCleary Stephanie Rogers Cindy Sedillo Support Staff I Table of Contents Section Page Texas Lemon Law Anniversary Highlights - Special Edition................................................................. 1-6 2003 Annual Report.................................................................................................................................. 7-46 Vehicles Covered ............................................................................................................................................ 8 Introduction to the Program Results for CY 2003 ................................................................................ 9-11 Chart A - Summary of Program Results ............................................................................................... 9 Chart B - Geographic Distribution of Complaints Filed ............................................................ 10-11 Complaint Process ................................................................................................................................. 12-17 Chart C - Complaint Process and Time Span ................................................................................. 13 Chart D - Mediation Inspections ...................................................................................................... 15 Complaints Filed...................................................................................................................................... 18-29 Chart E - Complaints Filed - By Manufacturer and Make .......................................................... 18-19 Chart F - Complaint Filed Index - By Make and Model (Cars & Trucks)................20-23 CFI Results for Cars & Trucks ..................................................................................................... 24 Chart F1- Complaint Filed Index - By Make and Model (Motor Homes)......................25 Chart F2 - Complaint Filed Index - By Make and Model (TRVs) ................................................. 26 Chart F3 - Complaint Filed Index - By Make and Model (Motorcycles & ATVs).................26 Chart G - Defects Reported ............................................................................................................... 27 Chart H - Predominate Defects - By Make and Model..................................................................29 Complaints Closed .................................................................................................................................. 30-44 Chart I - Complaint Resolution Before Hearing Set ...................................................................... 30 C h art J - S ettlem cents .......................................................................................................................... 31 Chart K - Repurchase/Replacement/Trade Assist Settlements Before Hearing Convened - B y Manufacturer ................................................................................................................. 32 Chart L - Complaint Resolution After Hearing Set ........................................................................ 33 Chart Mi- Complaints Closed Comparison ................................................................................... 34 Chart M2 - Complaints Closed - By Manufacturer and Make ...................................................... 35-36 Chart N - Repurchase/Replacements Ordered - By Make and Model .............................................. 39 Chart 0 - Market Share Percentage - By Manufacturer and Make ............................................... 41 Chart P - Settlement Rate - By Make of Vehicles ........................................................................ 42-43 Chart Q - Manufacturer Reacquired Vehicles ............................................................................... 44 Conclusion....................................................................................................................................................45 Acknowledgments ........................................................................................................ 4 4 e a 9 h Texas Lemon Law Program Special Edition TeXas ni'on Law Anniversary Highlights 1 Texas Lemon Law Program Special Edition The following chart depicts the number of complaints received compared to the number of complaints closed from CY93 through CY03. The number of complaints closed each year includes some complaints carried over from the prior year. Except for CY94, the number of complaints closed almost equals or exceeds the number of complaints filed. Comparison of Complaints Received and Complaints Closed CY 1993-CY 2003 1400 - 1300 - 1200 - - - - - - - - - - -+- Rec'd 1100 - - - - - - - - - - - Closed 1000 - - - - - - - - 900 - - - - 800 1 CY93 CY94 CY95 CY96 CY97 CY98 CY99 CYOO CY01 CY02 CY03 2 Texas Lemon Law Program Special Edition Of the 11,593 complaints that closed in the past decade, approximately 7,386 or 64% of the complainants obtained relief. Repurchase, replacement and repair relief, or some other form of relief was received through a settlement or decision and order of an Administrative Law Judge. % Obtained Relief CY93 56% CY94 58% CY95 58% CY96 64% CY97 64% CY98 67% CY99 69% CYOO 68% CY01 62%