Released: November 26, 2007

How arbitration takes away your right to sue

Source: Stephanie Mencimer, Mother Jones

Our car is old. The 1993 Honda Accord has more than 145,000 miles on it, but it’s paid for and still runs pretty well despite the rust. But this year my husband and I decided the time had come for an upgrade—not a new car, of course, but newer than the one we’re currently driving. Something with airbags.

The perils of buying a used car have been well documented, and the industry sleaze is so ubiquitous that it’s inspired a handful of Hollywood movies (see the classic 1980 flick Used Cars, starring Kurt Russell) and a genre of jokes ("How can you tell when a car dealer is lying? His lips are moving."). So we approached the whole ordeal with trepidation. But after months of research and anguish, we finally decided to pull the trigger on a “certified pre-owned” 2007 Volkswagen Passat Wagon, which we found at the nearby Wes Greenway’s Volkswagen dealership in Alexandria, Virginia.

After much hassle, the dealership allowed us to bring home the sales paperwork so we could read it over without the salesman hovering over us. Everything seemed to be above board until we got to the end of the buyer’s order and discovered that if we signed the contract, we would waive our rights to sue the dealership in court, before a jury, should any dispute arise after the sale. Instead, as a condition of buying the car, we had to agree to submit to mandatory pre-dispute binding arbitration, handled by the dealership’s pre-selected company, the National Arbitration Forum (NAF).

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