Mandatory Arbitration from New Car Dealers

chuck_k

Recently, I moved from Ohio to Colorado. In all of my transactions in Ohio, I have never been asked to sign away my rights to sue in court. In an attempt to purchase a new Honda in Colorado, we got all the way through the deal process and well into the signing process when the financial guy pulled out an Arbitration Agreement. I refused to sign it and he said no one has ever questioned it. He went to ask someone else and returned to tell me that without a signed Arbitration Agreement form, he could not sell me the car.

Is this a new thing or is this localized to certain states? I know the AT&T Supreme Court decision last year basically said these were enforceable regardless of what the company does. Just looking for some guidance here.

stever

It's relatively new but getting more common. Toyota and Mercedes-Benz have 'em too.

How to Effectively Complain about your Car Problem

Mr_Shiftright

The problem with binding arbitration is the consumer getting control of who does the arbitration.

If I don't get to REJECT an arbitrator I don't like for some reason, then I won't sign the agreement. Last thing you need is an arbitrator in the pocket of the automaker.

I've done a lot of hearings involving arbitration and while sometimes it is quite fair to all parties, it can also be a totally corrupted system.

How so? If the arbitrator doesn't rule mostly in the automaker's favor, they can simply not send them anymore work.

A court-appointed arbitrator might be okay.

stever

"Hyundai has put a lot of marketing money and muscle behind its ten-year warranty, so when the New York Times pointed out recently that the warranty subjected owners to binding arbitration in some cases, Hyundai saw it as a potential black eye.

Hyundai said it was dropping the arbitration clause “because we don’t want people to be misled and think we don’t stand behind America’s best warranty,” said Jim Trainor, senior group manager for product public relations, in a statement to the Times."

Hyundai drops arbitration clause in warranty disputes (consumeraffairs.com)

stever

General Mills just got embarrassed by their ham-fisted effort to keep people from suing it if you interact with the company in any way. (thewire)

Anyone notice any arbitration agreements lately when they've purchased a new or used car?