The financially troubled Chrysler Corp. will not honor used car warranties extended by the company's three area dealerships that went out of business last week, a Chrysler official said yesterday.
"The responsibility is with the selling dealer -- not the corporation," said Edward Dempsey, the firm's customer relations manager for the Washington area.
Chrysler will honor warranties on new cars, Dempsey said, but the company's refusal to offer the same protection to the buyers of used cars was immediately attacked by a local consumer activist.
It demonstrated again that if [Chrysler] doesn't stand behind its dealers or its products," charged Archie Richardson, president of the Auto Owners Action Council. "That is one of the reasons that consumers have lost confidence in Chrysler, Chrysler products and Chrysler dealers."
Herbert Simmons, acting director of the District of Columbia Office of Consumer Protection, said, "I think it is unfair; the company should honor the used car warranties."
The brunt of the decision will fall heaviest on those least able to afford it -- the people who buy used cars, Simmons said.
He would not specify, however, what action, if any, his office will take to protect used car buyers who have warranties from closed dealerships. "We will be in conference on this Friday; I'm not prepared to discuss options now."
The corporation's position did get some support, however, from the Automotive Consumer Action Panel, a trade association service established to help consumers solve their car problems.
"We don't see that -- the used car warranty -- as an obligation of the Chrysler Corp," said Autocap manager Gerard Murphy. "The manufacturer has nothing to do with the dealer selling used cars."
Questions about warranty protection arose with the sudden closing last week of three area dealerships: Capitol Hill Chrysler-Dodge, in the District; Marlow Heights Chrysler-Plymouth in Prince George's County, and Bethesda Chrysler-Plymouth in Montgomery County.
The Bethesda dealership will operate as an independent repair facility, said Dempsey, the corporation spokesman. But it will no longer sell Chrysler products or be responsible for their warranty service, he said.
No precise figure was available on the number of consumers who would lose warranty protection on their used cars because of the Chrysler dealerships' shutdown.
But Dempsey, after consulting dealer financial statements, said that Marlow Heights Chrysler-Plymouth sold 65 used cars during March, Capitol Hill 62 and Bethesda 6.
"There is nothing we can do for those people," Dempsey said.
Used car warranties extended by dealers typically offer protection against faulty parts and breakdowns for a period of 30 to 90 days from the date of purchase, Dempsey said.
"When the dealer offers a warranty for that time, he is responsible," Dempsey said.
A Chrysler official in Detroit expressed surprise that anyone would expect Chrysler to make good on used car warranties.
"How could we possibly warrant a used car -- there is a giant variety of used cars. One could have 120,000 miles while another has low mileage," said Bernard Mullins, a company publicist.
"And you couldn't expect us to warrant used cars we didn't manufacture -- it could be anything from an import to a jeep," he said.
The number of Chrysler Corp. dealerships has been declining in number steadily in recent months. In the first six months of this year, the firm lost a total of 73 dealerships across the country.
Buyers of new Chrysler cars can have their warranties honored at the remaining dealerships in the Washington area, Dempsey said. Any new car owner encountering trouble should contact his office, at 10210 Greenbelt Rd., Seabrook, Md., for assistance. The phone number is 794-6315.
The Chrysler disclsoures yesterday came just as the company prepared to hold its weekend tent sale to sell hundreds of new cars and trucks. Lawrence Kanter, an attorney for the Federal Trade Commission, said anyone shopping for a car should remember these points:
Will parts be available when the car breaks down?
Customers could lose their deposits if a dealership goes bankrupt before delivering the car, because other creditors have first crack at the company's assets
Is the service contract issued by the dealer or the company? If the dealer, the buyer could end up with nothing if the dealer goes out of business.