Chrysler Bankruptcy Will Void Any Recall Responsibilities

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In addition to no longer honoring lemon law debts, Chrysler vehicles sold before the company entered bankruptcy will not be the responsibility of the new company if there is any major defect that would normally require a recall. Chrysler will honor minor warranty claims, but any serious defects on vehicles sold before the company entered bankruptcy protection will not be the responsibility of the new company, according to ABC News.

According to consumer advocacy groups, this will leave 10 million vehicle owners with cars and trucks that, in the event of a massive defect, they will be personally responsible for.

This also includes people injured by faulty Chrysler products, like Farbod Nourian, who was interviewed by ABC News. Nourian suffered back injuries when a Jeep Grand Cherokee slipped out of park and ran him over. He is suing Chrysler to cover his tens of thousands of dollars in medical bills.

Vehicle recalls are a common occurrence nowadays. Even the most reliable cars and trucks sometimes have a manufacturing defect that isn’t discovered until years after the vehicle leaves the factory. Usually, the carmaker replaces the parts free of charge. Sometimes, such as in the case of the recent Toyota Tacoma frame-rust, the company buys back the vehicles at a very fair price (Toyota offered owners 1.5 times the blue book value of their trucks).

The point is that customers expect a company to stand behind its product, even after the normal warranty expires, and a car company’s reputation stands on its willingness to do that.

ABC points out that this will lower the already dismal resale value Chrysler vehicles have. How can you expect someone to buy a car when the manufacturer refuses to accept responsibility for any potential life threatening defects?


Logo via Chrysler.