Arbitration wins favor in car-sale disputes
John Jones of Phoenix, Ariz., thought his Chevrolet leaked water when it rained. The car was still under warranty and Mr. Jones had gone to his dealer without satisfaction.
The local Chevrolet zone office didn't solve the problem, either.
Thus, as General Motors Corporation is including in its owner's manuals starting with the 1983 cars, the automaker recommended third-party arbitration through the local Better Business Bureau (BBB) Autoline.
The BBB worked with the local Chevrolet office and attempted to mediate the matter, but that didn't work. Finally, arbitration was offered to the owner with the understanding that the arbitrator's decision is binding on both parties.
The Chevrolet local office and the owner mutually selected an arbitrator from a list provided by the BBB. The arbitrators are volunteers, a cross-section of consumers themselves, ranging from retired schoolteachers to active business men and women who have been trained by the BBB in their duties and the ground rules of arbitration.
Arbitrators don't award punitive damages nor are they involved in complaints which arise out of sales transactions between the dealer and a customer. They do , however, concern themselves in a dispute involving the new vehicle warranty and any product question that arises from the vehicle use in an alleged manufacturing responsibility beyond the warranty period.
Decisions are limited to the actual value of the dispute.
In the case of the leaky car, the big problem was that Arizona was in its dry season and no rain was forecast. So the arbitrator recommended that the parties meet to do their arbitrating at a carwash.
The car was sent through the wash, didn't leak, and everyone was satisfied.
The manufacturers and dealers do not always win, nor are customers always satisfied with the various third-party arbitration programs that are available.
Bringing a third party into a dispute between an automobile seller and buyer is a growing trend. Not only has the BBB entered into an agreement with GM, but also with Volkswagen of America. Arbitration through the BBB's Autoline will soon be on a nationwide basis.
Occasionally the bureaus go to an automaker not in the program when a consumer registers a complaint.
AUTOCAP, or Automotive Consumer Action Panel, set up by the National Automobile Dealers Association (NADA), now is available in 38 cities and locations and involves 12,000 car dealers. A growing number of manufacturers are participating in it.
While the American Motors Corporation was the first domestic company to join the program, Nissan and most other import organizations - a total of 17 - are participating at this time. Mercedes-Benz of North America does not participate. Chrysler has its own program; and Ford Motor Company has its ''consumer appeals program.''
How is the arbitration program working and are more and more cases coming to arbitrators?
Each of the organizations which offer this service reports that as more motorists learn about the program, the higher the number of cases that come to them. That doesn't necessarily mean that there are a larger number of complaints , however, but only that more are being resolved through arbitrators.
Dean Determan, vice-president of the Council of Better Business Bureaus, Washington, D.C., reports that when the program began in 1978, the bureaus handled about 500 cases a month. Now it's up to 1,500 a month. When the program becomes national, he predicts, there'll be 2,500 to 3,000 cases a month.
James G. Vorhes, vice-president in charge of the GM consumer relations and service staff, says that ''experience thus far has shown that the plan effectively improves consumer satisfaction.''
Volkswagen chose to go with the BBB because it has the chance to participate in the selection of the arbitrators. With AUTOCAP, the choice is made without the manufacturer's input.
Franz Doerr, customer assistance manager for VW, reports that about 92 percent of arbitration participants were satisfied and would use the system again.
Rixon Rafter, supervisor of service development and merchandising for Ford, says his company's program is going well with some 5,000 cases handled and only 22 of them becoming lawsuits by the customer since 1977.
Some manufacturers see no problem with belonging to both Autoline and AUTOCAP in the future.
Richard Wagner, a Ford-Datsun-Peugeot dealer in Simsbury, Conn., and chairman of the NADA consumer affairs committee which has been operating AUTOCAP for 10 years, believes that the more organizations involved, the better it is for the consumer.
In just two years after the AUTOCAP program began in Connecticut, auto-related complaints fell from first place to fifth or sixth.
The key to the Autoline program, according to E. V. Speara, manager of owner service for AMC, is: ''We as manufacturers are linked even closer to dealers in the solving of consumer problems.''