Class Action Blog : Consumer Fraud, Consumer Protection, Securities and Antitrust Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz

Under a standard Honda lease agreement, the consumer agrees to make a monthly payment in exchange for the privilege of driving the car a certain number of miles.  The amount of the monthly payment is a function of a number of variables, including the length of the lease term, the number of miles allowed to be driven by the consumer, and whether up-front money is paid.  At the inception of the lease, the consumer chooses the number of permissible miles under the terms of the lease, usually 10,000, 12,000 or 15,000 miles per year.

There is a significant economic incentive for a consumer to pre-purchase more miles than he or she might ultimately drive, because if the actual mileage exceeds the pre-purchased amount at the end of the lease, the consumer is charged a substantial "excessive mileage" penalty ranging from $0.15 to $0.25 per mile for each mile over the mileage provided in the lease.

But what happens when the consumer drives less than the contracted number of miles?  Surely Honda provides a refund for the value of these unused miles, or a credit against other end of lease charges, right?  Wrong.

While some automobile manufacturers use the value of unused miles as a credit or incentive to entice a consumer to enter into a new lease agreement, Honda provides no refund (or credit against other charges) for these unused miles at the end of the lease term.  As a result, the consumer pays Honda for miles he or she has not used.  In addition, Honda receives an additional windfall by reclaiming a car with less wear and tear, and a residual value greater than originally anticipated at the time the lease was entered into.

If you or someone you know has returned a leased vehicle to Honda at the end of a lease term with unused miles, please contact us to discuss your legal rights.

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Under a standard car lease, the consumer agrees to make a monthly payment for the privilege of driving the car a certain number of miles agreed to in the contract, usually 12,000 or 15,000 per year. At the end of your lease term, if you exceed the mileage permitted under your contract, you are typically required to pay for your “excessive use”.  This cost is provided in the lease and is generally around 15 to 20 cents for each mile that exceeds the maximum contracted mileage. But what happens when you’ve driven less than your contracted number of miles? Surely the leasing company provides a refund for the value of these unused miles, or a credit against other end of lease charges, right? Don’t count on it.   

While car leases explicitly provide for the imposition of additional fees when the lessor exceeds the permitted mileage on a lease, they are less inclined, or not inclined at all, to provide a refund or credit for unused miles at the end of a lease.  Some leasing contracts specifically address the treatment of unused miles. For example, the 2010 Nissan car lease clearly provides that “[t]here will be no refund for unused miles, including any additional miles purchased by you.” This explicit provision puts the consumer on notice that no refund will be given for unused miles and by signing the lease, the consumer agrees to that term. 

However, that contractual language is not universal in the car leasing business. As a result, many consumers are paying for mileage they are not using while the car companies are reaping the dual benefits of receiving payment for unused mileage, and receiving a car at the end of a lease with less wear than expected. One example of this windfall is the 2010 Honda lease. Like most leases, the Honda lease goes into great detail about additional charges for excess wear and tear, including a 20 cent per mile charge for exceeding the maximum mileage allowed under the lease. However, the lease is silent with respect to refunds or credits for unused miles. As a result, the consumer pays for miles he or she has not used and Honda receives payments for unused mileage and a car with less wear and tear.  

As always, consumers should read car leases and other contracts carefully so they understand their rights and obligations under those contracts. But where, as with the Honda lease, the contract does not disclose an important term, there is the potential that consumers are paying more than they should for their leases.

If you or someone you know has returned a leased vehicle at the end of a lease term with unused mileage and the applicable lease is silent with respect to the treatment of unused mileage, please contact us to discuss your legal rights. 

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Hybrid car manufacturers charge thousands of dollars extra by promising improved gas mileage.  They also promise to replace defective parts during the warranty period.  But numerous published reports suggest that Honda is breaking its promises to consumers who buy its popular Civic Hybrid model.

The problem is with the Civic Hybrid's expensive high-tech battery (known as an integrated motor assist or "IMA" battery).  Honda has admitted that the IMA batteries in its 2006, 2007 and 2008 Civic Hybrids "may deteriorate and eventually fail" prematurely.  But instead of replacing the defective batteries under its warranty, which would cost an estimated $3,000 per  battery, Honda has tried a cheap fix, installing a so-called "software patch" in the Civic Hybrid's computer.  This undoubtedly saves Honda money.  But hundreds of consumers have complained that Honda's quick fix drastically reduces their Civic Hybrid's gas mileage, which is, of course, a major reason they bought a hybrid car in the first place.  As one consumer put it: "Thanks to Honda's battery-saving update, my Civic Hybrid is now a standard underpowered Civic.  I paid an extra $5,000 for the hybrid feature." 

Honda has sold hundreds of thousands of hybrid vehicles in the United States and Canada.  If you own a 2006, 2007 or 2008 Honda Civic Hybrid, please contact us to discuss your rights. 

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Connecticut Attorney General Richard Blumenthal on Tuesday sent a petition to U.S Attorney General Eric Holder urging him to investigate insurance companies that steer auto repair customers to body shops of their choosing.   According to a 1963 Consent Decree with the U.S. Department of Justice insurers were ordered to stop sponsoring any appraiser, directing, advising or otherwise suggesting that any person or firm do business with any independent or dealer-franchised automotive repair shop, exercising control over the activities of any appraiser and fixing or controlling the prices charged by automotive repair shops for the repair of damage to a vehicle or for labor in connection therewith, by use of a flat rate.

Blumenthal said companies that deny consumers the right to choose their own auto repair shop may be breaking both federal and state laws.  "Practices pressuring consumers to use insurers' preferred repair shops suppress consumer choice and disregard legal duties," he said.  Indeed, insurance companies that deny consumers the right to choose the most appropriate repair facility for their car may be breaking the law.

If you are a consumer who was denied by an insurance company the right to choose the most appropriate auto repair facility for your car, please contact us to discuss your legal options.

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