Chrysler Accused of Reselling “Lemons”

April 3, 2001
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Safety Forum, a Virginia-based legal research firm, and attorneys handling a lawsuit
reported the Chrysler division of DaimlerChrysler has resold about 41,000 vehicles it
bought back from customers for chronic defects over the past seven years, often without
telling new owners about past problems. According to Safety Forum, documents from the case
indicate that Chrysler frequently hides the history of such vehicles from used-car buyers.
Chrysler, which has been involved in the past in legal battles over the resale of vehicles
under so-called “lemon laws,” said that it always tells dealers when they’re buying
vehicles that were bought back from customers, and it requires dealers to pass the
information on to consumers. All states have versions of lemon laws, which require
automakers to pay customers or buy back vehicles if they have chronic defects that are not
fixed despite repeated attempts. But some states also require dealers to tell buyers
whether a vehicle was once bought back under lemon laws. Safety Forum contends automakers
buy back about 100,000 vehicles a year and resell about 95 percent as slightly used without
revealing their full history and the corresponding drop in value.

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