Consumer Law

Honda Sues Dealer Selling Discount Extended Warranties

By Kemnitzer, Anderson, Barron, Ogilvie & Brewer

Savvy car buyers know that they may save money by buying an extended warranty (service contract) backed by a manufacturer from any authorized dealer. A NY Times article published August 2, 2008, on the subject of extended warranties features a Rhode Island Honda dealer, Saccucci Auto Group, that has made a business of selling discounted Honda Care service contracts over the Internet (www.myhondawarranty.com). According to Saccucci Auto Group, Honda formerly encouraged its dealers to sell the contracts over the Internet. However, in February 2008, Honda announced a new policy banning Internet sales to protect its dealers' profit margins.

Saccucci Auto Group sued Honda in a state court and a judge enjoined Honda from enforcing the new policy. Honda then removed the case to the federal district court. Right now, if a California owner tries to buy a Honda Care extended contract, a message comes back saying Saccucci is temporarily not selling contracts in California while it researches California law. For the sake of competition and car buyers, let us hope Saccucci wins this one!

Full post as published by Lemon Law Blog on August 05, 2008 (boomark / email).