Mint? No, it may be lemon
(cont'd)


A certified car carries a hefty cost premium, anywhere from 10% to 30% above a non-certified car. That covers the extended warranty that dealers provide for certified cars, as well as some kind of peace of mind that the consumer is supposed to have upon exiting the used car lot.

That peace of mind quickly deteriorated for Johnson.

Johnson says he "couldn't afford a new Mercedes, but I wanted the luxury," so the 32-year-old electrical contractor took out a five-year, $62,000 lease on a pre-owned 2000 Mercedes S340 sedan.

The problems started less than a year later, when his tires began to wear out prematurely and require repeated alignment, Johnson alleges in a lawsuit filed in Superior Court.

Robert Brennan, Johnson's attorney, said the car had been in an accident in Florida in 1999 and then returned to a North Dakota dealer. Fletcher Jones purchased the car wholesale from the North Dakota dealer and then leased it to another customer before it ended up with Johnson.

The suit alleges that Fletcher Jones knew the car had been in a serious accident and never disclosed the problem to Johnson, a contention in sharp dispute.

Howard Miller, an attorney representing Fletcher Jones, confirmed the Mercedes had frame damage from a prior collision but said it was not detected during its certification inspection.

Miller said the frame damage was hidden under the engine and that the North Dakota dealer that sold the used car to Fletcher Jones did not disclose the problem. Such problems are highly unusual in the dealer's program, Miller said.

Miller and Brennan said that, in the last week, they have agreed to settle the case under terms that will not be disclosed. Because an expert warned the car was unsafe to drive, the Mercedes is sitting in Johnson's driveway and he has continued to pay $1,300 per month on the lease.

Carmakers say they are trying different tactics to help ensure that certified inspection programs live up to their billings.

Toyota has a 163-point inspection program and attempts to investigate a car's title history to determine whether it has ever been in a serious accident that has resulted in a total loss.

The company also makes surprise checks on dealers to make sure certified inspections measure up to Toyota's standards, said Norm Olson, national sales manager for Toyota's certified used vehicle program.

"You don't want to put garbage out there," Olson says.

But Assemblywoman Cindy Montanez (D-San Fernando) is sponsoring a law supported by consumer advocate Shahan to place new rules on the industry's certification programs. If passed, the law would define for the first time all the steps that a dealer would have to take before claiming a car is certified.

Los Angeles Times staff reporter Ralph Vartabedian contributed to this report.