DennisBeaverJuly 29, 2006 (Original publish date) • By Dennis Beaver

Let’s say that you have purchased a used 2003 Toyota Matrix with 97,000 miles on it at a very good price from a local used car dealer. Now, you did wonder if the mileage was really that high, as the car seemed to be in extremely clean condition. But neither you nor the used car dealer knew this vehicle had a peculiar odometer that could easily be misread. The salesman did misread the numbers big time – making an almost 50,000 mile error.

The car you bought had less than 50,000 miles, not 97,000, but no one knew that at the time. Thinking it was a high mileage car, and wanting a safety net, you also bought an extended warranty for about $1,400. Away you drove a happy customer on June 12, 2006.

But the very next day, pushing the reset button on your car’s odometer you discover the true mileage. Yes, you probably did get a good deal, but something tells you that there’s a real problem brewing here. “What should I do?” is the question you ask yourself.

Eureka reader Rebecca Rothman asked herself that same question, as it was her Toyota that is the subject of today’s story. A longtime reader, her e-mail zeroed in on one of the critical issues: We realize the extended warranty – 2 years or 24,000 miles – will be void if we do not get the mileage amended. What should we do as we can’t afford to pay for repairs, but need the safety net of an extended warranty? Your advice would be appreciated.

I phoned her back within hours. “Yup, you have a real problem here, Rebecca, as if you try to use the warranty, ever sell the car, or get into an accident and mileage becomes an issue, someone is going to accuse you of fooling around with the odometer. But something tells me we are going to solve this for you in a hurry,” I said.

Help from an unexpected source

Rebecca wanted to keep the car and an extended warranty was important to her. While in my experience, most are of doubtful value – if any at all – except to the dealer selling them – at times the customer gets lucky and the warranty company actually agrees to pay for needed repairs. In my opinion, if you want an extended warranty, it is best to buy one from a factory authorized dealer and only a warranty that comes from the manufacturer or is backed by the auto maker.

Over the years, writing this column has brought me in contact with auto dealers all over the country. While there are exceptions, I think that it is safe to say today’s factory authorized dealer – across the board, regardless of make – adheres to much higher ethical standards than ever before. Manufacturers do not want and cannot afford to have bad apples, in either sales or service; in large part due to Lemon Laws and other consumer protection rights we take for granted.

Given a chance to help a customer – even where they did not sell the car – good dealers will do what they can. That was precisely what happened when I phoned Mid City Toyota in Eureka and spoke to salesman Matt Perreault.

“Matt, I need your help. My reader, Rebecca Rothman, purchased a 2003 Toyota Matrix from Roy’s Auto Center in Eureka and they made a mistake on the mileage. It has less than 50,000 – not 97,000 miles. She also bought a $1,400 extended warranty. It is clear to me that when this is brought to Roy’s attention, they will rewrite the contract to correctly show the mileage, but in my opinion, unless the extended warranty is from a manufacturer, it’s a huge gamble and I have told Rebecca that. Even though she did not buy this used car from Mid City Toyota, can you get her into a Toyota warranty?”

“Absolutely! Anything to help,” he immediately replied, adding, “and I will talk with our finance and insurance manager, Mike Travis, and see what kind of a price we can get her.”

Your right to cancel extended warranties

I phoned Rebecca and told her to expect a call from Matt at Mid City. I also told her that she has the absolute right under California law to cancel that used car extended warranty. “Civil code Section 1794.41 states that within the first 30 days, if no claims have been made, the full amount shall be refunded.” They will not give you a problem with this refund and should actually re-write the contract so that you do not pay finance charges on that part of the transaction,” I said.

“Now, I want you to go right back to Roy’s with your boyfriend, explain the problem and be aware of one more possible issue,” I told Rebecca. “What’s that?,” she asked, with a tone of voice that told me she had either been warned of what I was going to say, or was a mind-reader.

“A legal argument could be raised that the entire contract should be canceled, due to the mistake, for had Roy’s known the true mileage, they would have offered the car for sale at a much higher price. However, as it was their mistake – and they had the ability of correctly determining the real mileage – I believe they are legally bound to sell you that car, even if the price is less than what it could be. But from what I have heard about Roy’s from the people at Mid City, they are a reputable dealer and will not ask for any more money,” I said.

Done deal

Rebecca did as I instructed. With her boyfriend, she went back to Roy’s, explained the problem, and Cindy, the office manager, immediately discovered how the mileage error occurred. She took care of changing all the DMV and financing documents to reflect the correct mileage, and, at Rebecca’s request, canceled the extended warranty.

Rebecca left promising to buy another car from them soon – and Mid City Toyota got her into a three-year Toyota Platinum warranty, at a greatly discounted price. She is one happy camper, and I have had the pleasure of speaking with some very nice people who are testimony to the good things about small town America.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.