It seems Honda odometers, until recently at least, were what you might call conservative — they registered a slightly higher mileage than actually driven, by perhaps 2 or 4 percent. Given that the best known consumer-protection hazard in the odometer world has long been the danger of unscrupulous tampering with the devices so as to underestimate mileage with an eye to resale, one way to interpret the Honda settings is that they effectively leaned over to protect buyers of used vehicles. However, class action lawyers did not interpret the phenomenon that way, instead hinting at a plot to 1) get owners to come in for scheduled service slightly more often than otherwise and 2) run out mileage-triggered warranties slightly faster than otherwise. Reader James Ingram, referring to the handsome fee haul, writes: “I’m sure I am happy to pay $9 1/2 million to know that my Honda odometer which reads 10,200 to 10,400 really should read 10,000. If I drive it, say, 150,000 miles it might cost me an additional $30 oil change.” (Mary Alice Robbins, Texas Lawyer, Nov. 13).
“Odometer Settlement May Earn Class Lawyers $9.5 Million in Fees”
It seems Honda odometers, until recently at least, were what you might call conservative — they registered a slightly higher mileage than actually driven, by perhaps 2 or 4 percent. Given that the best known consumer-protection hazard in the odometer world has long been the danger of unscrupulous tampering with the devices so as to […]
4 Comments
One thing an aggressive speedometer/odometer does is indicate a higher than actual speed. If the manufactures put in precise speedos, the number of speeding tickets will go up. More money for lawyers and the government. Will the owners come back for relief from those tickets?
The monetary impact of a 2-4% reduction in warranty life is non-negligible. If you assume that some portion of the average cost of a Honda (or Acura; a family member got a notice on this for a MDX) is for a warranty for a particular period, then 2-4% of the warranty component of the purchase price may well be less than $100 per vehicle, but not much less. Over the millions of vehicles potentially subject to this, the value recovered for the class is significant. Not that I’m a fan of class actions, but this may be one of the rare situations where there is a) a tangible benefit to the class (extended warranty…may not seem like much, but some percentage of the class membership will experience covered events in the interval between the old and new warranty mileages), and b) fees that are not outrageous in proportion to that benefit (although the fees may still be disproportionate to services rendered).
If it costs a $30 oil change, then that would seem like a pretty good deal. The linked article notes that 6,000,000 consumers would benefit. That suggests that legal fees for each consumer would be about a buck and a half. If they save $30, the the contingency fee is about 5%.
Nine million may seem like a lot but at $1.50 per client, it hardly seems out of bounds.
I think Honda could argue that they add a small average to account for idle time. When you are sitting at a light, your odometer isn’t moving, but the miles are still adding up on the engine itself.