Toyota faces lawsuits over shrinking resale values
 

By Steve Gorman Steve Gorman – Wed Feb 10, 8:32 pm ET
LOS ANGELES (Reuters) – Added to a wave of personal injury lawsuits stemming from Toyota's massive recall, the automaker faces a growing number of consumer class-action cases -- more than 40 so far -- over the shrinking resale value of its cars.

Consumer lawsuits seeking economic damages for diminished value or lost use of a recalled Toyota vehicle have been filed in at least 30 states, mostly in federal court, and could end up costing the car maker over $2 billion, Tim Howard, lead counsel for a team of law firms handling about half the cases, estimated.

All the federal suits would be consolidated into a single class action in the next three to four months, following a hearing before a panel of judges set for March 25 in U.S. District Court in San Diego, Howard said.

Toyota Motor Corp's U.S. operations are based in California. A company spokesman declined to comment.

Litigation against the cash-rich Japanese automaker has mounted quickly in the weeks since it began the biggest recall in its history for repairs to ill-fitting floor mats and sticking gas pedals it blames for instances of unintended, sudden acceleration in its vehicles.

This week a separate recall was announced for braking flaws reported in Toyota's top-selling hybrid car, the Prius, and U.S. regulators say they are reviewing dozens of complaints of potential steering problems in new Toyota Corollas.

Toyota has recalled some 8.5 million vehicles.

Lawsuits related to injuries and death are the most obvious cases being brought against Toyota. Up to 19 U.S. crash deaths over the past decade may be linked to accelerator-related issues at Toyota, congressional officials have said. An unknown number of injuries also are likely to spur legal action.

A class-action suit was filed in Los Angeles on Monday on behalf of U.S. shareholders accusing Toyota of misleading investors.

Howard, a Northeastern University law professor, said the consumer class actions are based on the premise that for Toyota car buyers "if you went to sell your car today, it's worth a lot less than it was two weeks ago."

Major automobile valuation services like Edmonds and Kelley Blue Book have downgraded the resale value of Toyotas by as much as 3.5 percent, and further decreases up to 6 percent can be expected, Howard said.

Toyota has long boasted one of the industry's highest resale values for its vehicles, as well as a superb record of reliability and safety -- all major factors in the company's success in the U.S. market .

Class-action lawsuits are predominantly a U.S. phenomenon, involving a large group of plaintiffs who bring similar claims to court collectively.

Toyota is not the first car company to face such legal actions. In 2008, Ford Motor Co agreed to payouts of up to $500 per plaintiff, in the form of discount vouchers, to settle a diminished-value case on behalf of 800,000 customers after a tire recall prompted concerns about potential rollover crashes in its Explorer sport utility vehicle.

(Reporting by Steve Gorman, Editing by Dan Whitcomb, Leslie Gevirtz)

Hara-kiri time.

Jah, do you have the link to the article?
thanks

LOL!

People should be used to this... all the domestics they USED to buy, depreciated like crazy as soon as you drove them off the lot. Forgotten already? Stupid sue-happy Yankees!

Sucks for the owners for sure, but please tell me the customers aren't winning these lawsuits. Nobody buys a run-of-the-mill Toyota as an investment.

Lame lawsuit.

The ones that are going to get Toyota are the wrongful death lawsuits and insurance companies going after them.

I like how the Toyota press release for the recall said there were no reported injuries or deaths when the government says there have been at least 19 deaths.


There was a fatal crash almost 1.5 years ago involving a Toyota that's part of the pedal recall. ICBC investigators thought there was a throttle related failure that caused the accident, but Toyota denied it. ICBC decided that instead of scrapping the car to seal it and put it into storage. Guess what they're doing now? Going over the car to see if the pedal is the problem, and if it is then they will go after Toyota for damages they paid out for the death involved.

ICBC now has 2 full time investigators going over all Toyota crashes that fit the profile of a stuck throttle. Now why do you think ICBC cares about accidents where they already paid out money? Simple, they want that money back and who do you think they're going to expect to pay that money?


This is going to be a financial disaster for Toyota. Insurance companies all across North America are doing the same thing. And how many people who had an accident and thought it was driver error (so they never put on the claim saying the vehicle throttle stuck) simply got their car fixed thinking they caused it? How many of those people are now looking back at their previous accident? How many people who own Toyotas simply accept them as being 100% reliable and when they crashed assumed it was driver error due to Toyotas excellent reputation? If they were driving a Ford they'd file a report with NHTSA based on reputation alone. What if this happened in an Audi?


Speaking of Ford and Audi, here are some interesting numbers:

- The famous Ford Pinto, which had a gas tank that could explode if you were rear-ended, had a total of 27 fatalities related to the problem.
- The Audi 5000 unintended acceleration problem that almost ended Audi in North America, only had 7 reported deaths.

Look at what these two incidents did for the reputation of Ford and Audi. Now NHTSA is saying 19 deaths from the Toyota issue, and the investigations haven't even finished. How many more will appear?

I think this shows the league Toyota is now in and how serious this will affect their business. This could be the most damaging recall ever to hit a car company.

toyota is seriously going down this time...

I'm going to speculate that 95% of the accidents are the result of idiot toyota owners who confuse a gas pedal with a brake pedal...just like in the Audi 5000.

This issue is being blown way out of proportion by the media. Give it 6 mts, and it will be a distant memory and have little to no effect on Toyota's sales.

Well, that's the problem now, isn't it? People are stupid.

I haven't really read too much into this recall and the mechanics behind them, but does Toyota use drive by wire or cable?
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hmmm, stocks r gonna go down, good time to buy?

Drive by wire. also steering is all electronic.. No steering fluid needed.

i was thinking about that as well
@@ didnt know that...cool

Sounds cool but in a way but not very...

Drive by wire on the corolla is very slow.. One time i tried to beat a tercel at a red light. both lanes eventually merge into one.. Since i drive an auto i put my gear in low.. Green light came stepped on the pedal and got a 1 sec lag befor my car ever booted off.. All in all almost didnt beat the 90's tercel.. Sad...

Electronic steering is pretty gay imo.. Everytime i drive on the highway and get a crosswind my car weaves righ and left... Makes me feel like i'm drunk...
2 hands on the wheel or not. Although i do like the fact that i can turn any corner using my pinky... Not recommended though.

vtec lag is horrible as well. Floor the pedal but no power until the rev is at 4400rpm.


I think if honda made vtec kicked in at 2000rpm, they will sell a lot more cars. IMO

Drive-by-wire on the affected vehicles. Problem is inside the accelerator pedal which can cause it to stick or bind.

As was mentioned in a different thread, apparently Toyota doesn't have the very simple safety feature of other manufacturers whereby stepping on the brake and throttle at the same time causes the engine to reduce power as it sees this as a fault. Vehicles will allow this to an extent (like when you're on a steep hill and give throttle before releasing the brake to avoid rolling back), but there's no reason for full throttle (or even half) when the brake pedal is on.

This simple feature would have prevented the deaths of the police officer and his family in California in the runaway Lexus. I'd put money that Toyota will (or has already) add this feature to new cars and will update software in current vehicles.

Do you even understand the reason for Vtec?

:banghead:

That police officer reading his owner's manual and knowing how to turn his Lexus off or shifting into neutral would have saved his life :p

It was a loaner from the dealer, not his personal car.

In case you missed the other thread, this is a quote taken directly from Toyota's website on how to deal with a runaway car:

- Shift the transmission gear selector to the Neutral (N) position and use the brakes to make a controlled stop at the side of the road and turn off the engine.
- If unable to put the vehicle in Neutral...

Now why whould they make a comment about being unable to shift the car into neutral?

you do know what vtec does right? and you do know why they created the vtec system right?

obviously not, he is thinking SOHC

or I-VTEC which is always on just like VVTi but DOHC has a 2nd set of cams

Have you ever seen a Lexus' shift gate? It's hard enough to shift gears without being under the stress of a vehicle accelerating out of control:

http://z.about.com/d/cars/1/0/g/l/1/..._ShiftGate.jpg
http://z.about.com/d/cars/1/0/g/l/1/..._ShiftGate.jpg

You have to hit Neutral, which is right in the middle. Push too far, and you're not in Neutral anymore...