Dealing with duds: CAMVAP or lemon laws?
Last Updated November 13, 2007
So that new dream vehicle of yours is turning into a bit of a nightmare. You know there's a problem with it and you've had it into the dealer half a dozen times, but they insist the vehicle checks out just fine.
You've been polite through the entire process but can't seem to get the dealer's repair department to understand. You take your case to the manufacturer, but get the same results.
Stuck with a lemon?
Maybe. Unlike in the United States, there are no lemon laws in Canada. There have been attempts in B.C., Manitoba and most recently in Ontario, where a private member's bill made it as far as second reading.
CAMVAP filing tips
Tips on preparing your case:
- Keep detailed records of repair work done to your vehicle.
- Note the number of days you are without your vehicle.
- Give your dealer a second chance to resolve your problem. If that fails, go to another dealer, then to the manufacturer.
- Never lose your cool. Do not swear or be abusive to service staff. It won't help your case at all.
Canada settled for the Canadian Motor Vehicle Arbitration Plan. It was set up in 1994 to help consumers resolve their complaints with car manufacturers.
The program won't help you get out of leases or sales agreements or resolve disputes with dealers. It will deal with your complaint about an automobile manufacturer and the quality of the vehicle you have bought — or how the manufacturer is interpreting or implementing its new vehicle warranty.
Most cars, light trucks, sport utility vehicles, and vans that are bought or leased in Canada are covered by CAMVAP. Two notable exceptions are BMW, which never joined the program, and Mitsubishi, which pulled out in September 2006.
Your vehicle is eligible if it's from the current or the previous four model years — and has less than 160,000 kilometres on it. Used cars and trucks aren't covered unless they're still covered by the manufacturer's warranty.
CAMVAP is run by an 11-person board of directors made up of four representatives of the provinces, four representatives of automobile manufacturers and distributors, two from the Consumers Association of Canada and one from automobile dealers.
If you go the CAMVAP route, you must agree to abide by the arbitration panel's decision and not pursue the matter through any other route, including the courts.
Arbitrators can make a variety of rulings:
- They can order repairs to your vehicle.
- They can order the manufacturer to buy back your vehicle.
- They can order the manufacturer to reimburse you for repairs done to your vehicle.
- They can order the manufacturer to reimburse you for out-of-pocket expenses up to $500.
- They can order the manufacturer to reimburse you for costs to obtain a summons for a witness up to $100 in certain circumstances.
- They can rule that there is no liability on the part of the manufacturer.
- They can rule that CAMVAP has no jurisdiction to hear your case.
In 2006, 575 claims were filed to CAMVAP. Of those, 334 went to arbitration. The year before, consumers filed 743 complaints, with 466 going to arbitration.
CAMVAP reports that 54 per cent of the cases that went to arbitration in 2005 were settled in favour of consumers, while 52 per cent favoured consumers in 2006. Manufacturers were ordered to buy back 98 vehicles in 2005 and 91 the next year. The average amount paid out in buy-backs in 2005 was $24,376 and $18,862 in 2006.
The plan bills itself as fair, fast, friendly and free. Its goal is to resolve complaints within 70 days. CAMVAP says the vast majority of people who use their service rated their experience as either very good or excellent.
But it's not without its critics. The Automobile Protection Association says the plan's statistics are misleading. The association points out that while CAMVAP says most rulings favour consumers, many of those cases are ordered back to the dealer for yet another repair, which may not be a satisfactory outcome for the consumer.
The APA would rather see the provinces adopt American-style "lemon laws" that can force car manufacturers to replace vehicles that have been declared lemons.
The definition of lemon varies by state. It usually means that despite several trips to the dealer's service department, a vehicle continues to have a serious problem. It can also be declared a lemon if it's had a series of problems that have left it in the repair shop for 30 days.
Once a vehicle is declared a lemon, the manufacturer has to buy it back. There's nothing stopping the manufacturer from reselling the vehicle. While all 50 states have lemon laws, only 19 require the title of a car declared a lemon to carry a warning. When a dealer sells a lemon out-of-state, the lemon designation is often not carried over.
One American consumer group — Consumers for Auto Reliability and Safety (CARS) — estimates that manufacturers buy back more than 100,000 lemons a year and then resell most of them, often without disclosing their history. And some of those cars are finding their way into Canada.
A CBC News investigation revealed a growing number of American "lemons" imported into Canada, particularly as the value of the Canadian dollar rose.
The North American Automobile Trade Association says in October 2007, Canadians imported nearly 25,000 American cars. That's up 68 per cent from the month before when the dollar hit parity with its U.S. counterpart — and 5,000 more vehicles than Canadians imported from the U.S. for all of 2000. During the first 10 months of 2007, Canadians imported 112,000 American cars. Meanwhile, a CBC News investigation has found that hundreds of cars previously labelled lemons in the United States have found their way to Canadian dealerships. In one instance, a car that originally sold for $28,100 US in Florida was sold at auction to a Winnipeg dealer for $13,100 US after it was declared a lemon. The CBC's Alex Freedman tracked it down to a Winnipeg car lot where it was on sale for $24,980.
Freedman obtained reports on several cars by using a service that provides vehicle histories through vehicle identification numbers (VIN). He detected a steady increase in the number of lemons imported into Canada as the dollar approached parity.
Between May 1, 2006 and Nov. 5, 2007, Freedman tracked 852 American lemons that were imported into Canada, with more than 110 of those crossing the border since the Canadian dollar reached parity.
You can obtain used vehicle information packages in Canada — in some provinces sellers are required to provide one for each car they sell — but even that has limitations. In Ontario, for instance, all used vehicles must be branded to indicate whether the vehicle has been damaged in the past. The categories include:
Because Ontario does not have a lemon law, there is no designation for "lemon."
If you want to bring back a car from the U.S. yourself, you'll have to make sure it meets Canadian standards. Complete instructions are available through the the Registrar of Imported Vehicles.
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