What to do when dealership changes their mind about warranty coverage after repairs are done?
December 2, 2006 3:56 PM   Subscribe

I have a relative who bought a new Toyota and returned it for repair. The dealership claimed it would be covered under warranty before fixing it, but said it wouldn't be covered after fixing it. He can't afford the unexpected repair bill, so he risks losing the entire car to a lien. Any advice?

He bought an automatic-transmission 2006 Toyota Highlander in August. After driving it for a 2-3 months, the car broke down while he was driving it (with a loud "pop"). He remembers hearing a faint noise coming from the engine prior in the days prior to breaking down, but assumed that it was due to the colder weather.

He had it towed to the dealership (towing was paid by his insurance company). The dealership told him that it would be fixed under warranty and gave him a loaner car.

Two weeks later, they called him to tell him that the car is ready. When he arrived (and only after he arrived and gave up his loaner car), they told him that there will be a $3,500 charge which is payable immediately. The dealership said that they performed the repairs, but the warranty claim was rejected because they the engine was damaged due to "over-rev". He doesn't recall over-revving the engine at any time (and besides, it's an automatic).

The day they told him to pick it up was the first day he was told of the charges. He can't afford to pay the unexpected $3,500, so he left it there. The dealership told him that he has until next week to pick it up, otherwise they will place a "work lien" (or something like that) on it, and it will effectively become their property.

He only authorized the repair because he was told it would be fixed under warranty. Obviously, if they would have told him in advance of the charges, he would have denied the repairs, retrieved the car, and dealt with it later. But since they already performed the repairs and are holding the car, he risks losing it entirely.

I don't really know what to tell him, but from hearing his story, it seems like he's getting screwed by Toyota. Any advice? Some questions I came up with:

1) Can a warranty claim for an automatic transmission be rejected due to over-revving an engine? And can that claim be challenged?

2) Was it legal for them to say it would be covered under warranty, and then try to charge him for it after the repairs were done?

3) He has $2,000 in the bank. Should he use this to hire a lawyer, or try to use it to negotiate with the dealership somehow?

For reference, the car/dealership is in Tennessee, and he's in Georgia.
posted by helios to Travel & Transportation (26 answers total) 4 users marked this as a favorite
The dealership thinks the car couldn't have suffered the damage in question via "normal" usage, so they're denying the warranty repairs.

Get them to give you a letter detailing WHY they're denying the warranty claim.

Personally, I'd pay the $3500, pick up the car, and then sue the dealership and Toyota USA, in Georgia small claims court, for $5000 or so (the $3500 plus inconvenience).

There's little else you can do. There's an agreement between you and Toyota: "We will fix your car if it breaks." You say they should honor that agreement, they say they shouldn't, the courts are the only method of enforcing the agreement. The judge will be happy to listen to your side of the story and Toyota's side of the story and render a decision.

If you leave the car there without paying for the work, the dealer will be entitled to hold onto it and will likely eventually sell it, cheap, to pay off the $3500. That's just going to be hassle all around. Pay for it, pick it up, and sue.
posted by jellicle at 4:13 PM on December 2, 2006

He would have gotten and signed an estimate for repairs, where perhaps it says something in the fine print about total being due upon delivery regardless if it's under warranty or not. If he signed something then his issue is with the Toyota warranty program and not the dealer. If the dealer never had him sign anything or if they never said how much (approximately) it might be, then he certainly has an issue with the dealer. If it's the first case, pay first then raise holy hell with Toyota (or do both simultaneously); if it's the second, then I would pay a lawyer to get involved. IANAL though. It seems to me that you're in the right that you're getting screwed, but the question is by whom. Good luck.
posted by dness2 at 4:18 PM on December 2, 2006

Best answer: He really really needs to talk to a lawyer immediately.

Really really really.

posted by mediareport at 4:18 PM on December 2, 2006

Best answer: Not sure if I can offer specific help, but I had a significant problem like this with a dealership repair shop where I felt the repair department was screwing me.

I solved the problem by going to the dealership Web site, the manufacturer's Web site and sending complaint emails to literally every single email I could find.

I mean, the investor relations people got emails from me. I cruised corporate press releases and sent my email complaint to all the contacts listed on the press releases. Salespeople at other dealerships got emails. Marketing folks got emails. The board of directors received emails. And oh yeah, the customer support folks. Every email I sent contained the full list of all the emails I sent, so anyone looking at the email could see exactly what I had done.

In all, this gathering of emails took literally 30 minutes of Web surfing.

I was shocked at the positive response. Sales people apparently cc'd my mail to more people (it was quite humorous, if I do say so myself). Customer support solved my problem. The office of the company's CFO called to apologize to me.

So, my advice is to complain effectively. It's not enough to call "the manager." Scream bloody murder to literally everyone you can find. You want to be the angry customer they're still telling stories about years later.
posted by frogan at 4:19 PM on December 2, 2006 [2 favorites]

Oh, and most lawyers give a free first consultation without any commitment to hire them, so he doesn't need to be thinking "all or nothing" with his two grand in order to get solid legal advice.
posted by mediareport at 4:20 PM on December 2, 2006

Frogan is absolutely right. A great place to start is with Toyota's regional rep. If the dealership won't give you his/her name, you can get it from Toyota. (And that would also be a pretty good clue that they're trying to screw you.)

In my experience, honest dealers will do whatever they can to help the customer get warranty coverage. The fact that they aren't being helpful in appealing this to Toyota is the fishiest thing about the situation.
posted by j-dawg at 4:29 PM on December 2, 2006

Best answer: Oh, and one more thing, which is my only tiny disagreement with Frogan. Being the angry customer can work against you. Be firm, be tenacious, be vigilant, be dogged, but be cool. You'd be surprised how far polite can get you in a situation like this, because the easiest way for the dealership to defend themselves is if you give them the ammunition to say you're an angry crackpot. When I've complained politely and effectively, I've not only gotten what I needed, I've sometimes even gotten gratitude from the people to whom I've complained. It can happen.
posted by j-dawg at 4:33 PM on December 2, 2006 [1 favorite]

another vote for frogan's suggestion. start making noise, and people will look into it. but don't be angry.
posted by lester's sock puppet at 4:40 PM on December 2, 2006

Paying and then suing is not great advice, because they're not going to give your friend the car without getting his signature on several pieces of paper (invoice, credit card slip, etc.) acknowledging the receipt of valid goods and services, legitimacy of charges, etc.

This is something that Toyota corporate should make vanish within the space of a day or two. Can you imagine the consequences to Toyota if this kind of gamesmanship became common knowledge?
posted by MattD at 4:41 PM on December 2, 2006

Have him send his story to The Consumerist. And then he should follow through as Frogan suggests, letting everyone know that the story is on the Consumerist. It seems as there is a pretty decent resolution rate for people who get their stories posted.
posted by kimdog at 4:43 PM on December 2, 2006

As others have said, Toyota corporate will not want this to stand. They risk losing your friend as a customer for the rest of his life. Contact corporate and they'll get the dealer in line.
posted by alms at 4:50 PM on December 2, 2006

The debt IS legitimate. The relative owes the dealership $3500 for the repairs. Period. The question is whether Toyota USA is going to reimburse the dealer/relative for the repairs, which is a separate question entirely.

Paying for the repairs does not in any way acknowledge that Toyota USA's denying of the warranty claim is a legitimate denial.

The situation is a little complex because the dealer and Toyota USA are in cahoots a bit; they have a strong business relationship. But still, the dealer performed work at the customer's request and they're entitled to be paid for it by the customer. Not paying for the repairs is just going to complicate the matter, and complicate it in a way not to the relative's advantage. Auto repair shops always have strong state laws that do allow them to hold and eventually sell cars for unpaid repair bills, and I'm sure Tennessee is no exception. If this case comes to court, you want it simple and uncomplicated.

The relative is perfectly welcome to complain to everyone possible in the Toyota heirarchy. Calls, letters, whatever. Swear up and down that you drive like a granny going to church. This may work. Or it may not. Either way the customer should pay for and pick up the car before the dealer gets it into their head to sell the car to satisfy the debt owed them for car repairs.

Advice about making a stink to Toyota is fine, as far as it goes. But every corporation has to deal with a certain amount of consumer dissatisfaction. There is every possibility that they will shrug and say, "Sorry". After all, all they have to go on is the dealer's report, which presumably says something like "Owner overrevved the engine and destroyed the transmission. Recommend that warranty claim not be paid." What's Toyota USA going to do with that except not pay?

The relative should NOT, if at all possible, complicate the situation by not paying for the car repairs.
posted by jellicle at 5:15 PM on December 2, 2006

The debt IS legitimate. The relative owes the dealership $3500 for the repairs. Period. The question is whether Toyota USA is going to reimburse the dealer/relative for the repairs, which is a separate question entirely.

Hmm, are you a lawyer?

The reason I ask this is that it reminds me of a askme from a while ago about a dentist who said that a certain procedure would be covered by insurance, and after it was done it turned out not to be.

There ware a lot of "you have to pay" comments, until a few lawyers showed up and said that they might not have too, because the original assurance that the procedure would be covered might mean the patient wasn't responsible.

My feeling is that the people proclaiming that "You have to pay!" with so much certainty are sort of talking out of their asses. The relative should talk to a lawyer.

That said, I don't think it will cause any problems if the relative pays now, and sues later. If I were in his situation, that's what I would try to do: Pay now and sue later.

Everyone else's suggestion that the poster email everyone from Toyota is a good idea as well. This kind of thing is not consummate with Toyota's "brand image". Remember that dealerships are often times independent companies, so the person at the dealership may not actually be employed directly by Toyota.

The argument that the damage was caused by "over-revving" is stupid, IMO, since almost all engines have rev-limiters as far as I know.
posted by delmoi at 5:38 PM on December 2, 2006

Dunno if this'll help but also try the TN Attorney General's Consumer Advocate and Protection Division. Call rather than email if you have a choice since that's more likely to get a prompt answer.

At the very least they should be able to tell you what your rights are in this situation, and maybe they can put some pressure on the dealer if his behavior has been questionable (IANAL.)
posted by Opposite George at 5:48 PM on December 2, 2006

Just on the technical issue, I seriously doubt that today's engine computers and automatic transmissions will allow an engine to over-rev to the point of damage. The engine shouldn't over-rev even if you shift into low gear at 60 MPH. The engine computer and transmission shouldn't allow it. If it does, then it must have been defective to begin with.
posted by JackFlash at 6:12 PM on December 2, 2006

You can try to stick it to the dentist because the work is done, the dentist can't sell your crowns to recoup his costs. The service has been performed and the dentist has no hold over you.

In this case, the dealer has the car. HE has the money. (He has physical possession of an asset worth more than the disputed amount.) You can't stick it to the dealer. The dealer is going to stick it to you, if you try it.

Let me lay it out. The poster paid $30K for a Highlander and drove it off the lot. Assuming he made some sort of downpayment, he probably owes $25K on it right now.

If he doesn't pay, the dealer is going to put the car up for auction. The highest auction bid will be, say, $20K. That buyer is going to take the car and be gone, far away. So the car's gone, legally sold. Now the dealer is going to take his $3500 out of the $20K, and then take another $500 for expenses of selling the car at auction, and cut your friend a check for $16K.

The finance company is going to want their $25K that they're owed, since your friend is no longer the owner of the vehicle. Now your friend has a check in hand for $16K, and the finance company wants their $25K immediately. He's taken a bad situation, and made it worse.

Oh, he can claim that Toyota USA owes him $3500 for the transmission repair. And then if he wins that case, he try to claim that the dealer somehow wronged him by legally selling his car at auction when he refused to pay for repairs. But in the meantime, the finance company wants their $25K, and he's got a check in hand for $16K and no car.

First rule of money problems: when you're in a hole, stop digging.

First rule of monetary disputes: Possession is 9/10ths of the law.
posted by jellicle at 6:22 PM on December 2, 2006

If this was me, I would:

a) Spend Monday and Tuesday doing all I could to talk to someone at Toyota corporate to get them to help. I would think that ANY mechanical damage resulting from regular use (even hard use) would be covered by warranty.

b) Failing positive, they-called-the-dealer, resolution, buck up and pay the bill and then keep working on the problem.

This is very fishy. As stated above, it's nearly impossible to over-rev the engine on a modern car, and even then "damage due to over-revving" is a judgment call unless Toyota's engine computers have telltales in their programming permanently recording such parameters.

This is actually kinda interesting...I would have thought the dealer would do what they could to get it fixed under warranty. Maybe Toyota doesn't pay warranty work promptly and the dealer is cash-starved, or it was a $350 repair and your friend is getting reamed.
posted by maxwelton at 7:02 PM on December 2, 2006

All new cars are equipped with rev-limiters. You cannot over-rev without extensive modifications to the computer.

Toyota customer service blows, I have a Tundra. Too bad, they build great cars.

I wont repeat all the good advice above, but do know there is nothing you could have done to create this situation--Short of some serious, intentional, Johnny Knoxville / Jackass style abuse.
posted by vaportrail at 7:07 PM on December 2, 2006

Frogan's advice is good.

Don't take legal advice from strangers on the Internet.

That's all. Good luck.
posted by cribcage at 7:31 PM on December 2, 2006

jellicle writes "'Owner overrevved the engine and destroyed the transmission. Recommend that warranty claim not be paid.'"

See, uh, my question would be how one over-revs an automatic transmission?
posted by dirtynumbangelboy at 7:40 PM on December 2, 2006

Ah, I found the dentist post, key passage:
I am a lawyer. This is not legal advice, and I am not YOUR lawyer. I offer this for info-tainment purpsoes only.

In my opinion, your doctor's behavior satisifes the basic elements for a fraud claim. Regardless of whether you had a duty to know what your insurance covered or not, your dentist, acting from a position of superior authority, made an affirmative misrepresentation to you to induce you to act in a certain way. You, justifiably relying on that representation (justifiable reliance is the key element here -- many will disagree with me on whether you were justified in taking the dentist's word in this) chose to follow the dentist's advice and have the procedure. Based on that, I think you have a legitimate argument that your dentist engaged in fraudulent activity.
The basic situation seems to be the same.

In this case, the dealer has the car. HE has the money. (He has physical possession of an asset worth more than the disputed amount.) You can't stick it to the dealer. The dealer is going to stick it to you, if you try it.

I agree that "pay now, sue later" is a better strategy then risking the car.
posted by delmoi at 8:37 PM on December 2, 2006

I have to agree that on a modern vehicle, it's impossible to damage the engine due to over-reving unless something is defective. They pretty much all have rev limiters these days, and I've tested them. In automatics, the torque converter unlocks and the gas is cut. In a stick shift, you can make it happen. That said, I've accidentally over-reved my '91 Honda on several occasions, but it still runs fine. Once, I was driving along at 60 mph on a 2 lane road and meant to downshift from 5th to 4th to pass another car and hit 2nd instead. Oops..it hit about 7000 before I managed to jam the clutch back in. No damage... Do that on an engine with pushrods, and you'll find yourself with a hole in the block, though! (I know, I've been there, too!)

On a side note, I have a Honda that only gets service from someone I know at the dealership. Last time I was in for service, I noticed a shiny new Acura RSX in the next bay without an engine in it. I asked him what was up and he said that they'd been replacing transmissions on them like candy because the people that drove them liked to speed shift them at high RPMs, causing the gears in the transmission (stick shifts) to disintegrate at speed, ruining the rest of the transmission int he process. I expressed sympathy for the poor schmucks who were having to pay thousands of dollars to get their transmissions replaced and he told me they were all being done under warranty.

I didn't ask whether they were supposed to be covered or if they were just going to bat for the customers with Honda for the repair bills, but either way, that's above and beyond. Given that I've only ever heard good things about Toyota's service, surely they will see things they same way.

Obviously, your relative needs to stay far, far away from that particular dealer in the future.
posted by wierdo at 8:47 PM on December 2, 2006

Another rev-limiter comment.

On a manual transmission car, it's certainly possible to "bypass" the rev limiter by accident: going from 75mph in 5th gear, downshifting to fourth but missing and hitting 2nd instead. 75mph in 2nd gear would (depending on the gearing) make the engine spin at about 9000 rpm. The rev limiter will quickly go into action by cutting fuel until the rpms go down to the safe zone, but there's basic physics in play that can't be overlooked. It's going to take time for the engine to slow down--not a lot of time, mind you, but perhaps enough to damage the engine.

That's on a manual transmission. On an automatic, I just don't see how it's possible to over-rev. I suppose you could shift from drive to neutral while stamping on the pedal, but at that point the drivetrain isn't engaged, so the rev limiter will, once again, restrict the chance of damaging the engine. In an automatic transmission, the mere fact that the rev limiter wasn't doing its job indicates there was a separate problem with the car to begin with. Any warranty-covered items that fail and subsequently affect non-warranty items should (were I a judge, which I'm not) also be covered by the warranty.

But I'd add my voice to the echo chamber that it's vitally important that the car be in the possession of the owner when all this is being sorted out. Which means, sadly, paying the piper. jellicile's advice is spot-on in this respect.
posted by Civil_Disobedient at 6:06 AM on December 3, 2006

The car owner needs to elevate the dispute to the regional (or national) office. All car makers have a tiered heirarchy. The local dealer is merely the bottom rung. If asked, the dealer must provide the owner with higher-level contact information. This information could also, possibly, be in the owner's manual (which is probably in the car at the dealership...oh well)

In any case, manufacturers have processes in place to deal with just such disputes. These problems/disputes happen quite regularly.
posted by Thorzdad at 10:26 AM on December 3, 2006

Anoter rev limiter comment: the engine computer can record overrevs, but it can't tell the service person *when* it happened. Since this is a used car, there's no way the dealership can show with any certainty that the owner in question is at fault. It could just as easily have been the previous owner or am employee driving it around the lot. They might claim they clear the computer before selling the car, but can they prove it?
posted by drmarcj at 7:26 PM on December 3, 2006

Response by poster: Just to follow up: I told him to call a lawyer, and the lawyer took care of it in less than an hour. So I guess that's the right response!
posted by helios at 6:59 PM on December 13, 2006

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