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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Feb 2, 2012

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Owners of Hybrid Honda Civics who took out auto loans for the 2006 model have been rallied together by class action lawyers in a huge lawsuit mounted against Honda Motor Co. They claim the automobile company is guilty of false advertising by promoting a much higher miles-per-gallon for the vehicle than it actually gets.

 

But one car owner, Heather Peters, decided to take on the auto giant by herself and separated from the class action suit. She approached a small claims court in order to avoid attorney’s fees and to acquire a quick decision.

 

Then, according to The Associated Press, a Los Angeles Superior Court commissioner announced a decision in Peters’ favor, awarding her $9,867.

 

“Wow! Fantastic,” responded Peters to an AP reporter. “I am absolutely thrilled. Sometimes big justice comes in small packages. This is a victory for Honda Civic owners everywhere.”

 

Peters, who took out an auto loan to purchase a car that would get, what she thought, was 50 miles to the gallon, found that the vehicle got no more than 30 miles to the gallon. Claiming the car never lived up to its advertised promise, she sued the manufacturer for $10,000.

 

Had she stuck with the class action suit, she would have received significantly less.

 

Honda has proposed a settlement which would give car loan holders $100 to $200 each, and a $1,000 credit towards a new car purchase. And the class action lawyers would receive a total of $8.5 million, Peters told the AP.

 

A Honda technical expert said that the 50 miles-per-gallon sticker was simply an estimate on the highest amount of mileage the car could get—which, according to the expert, is all that’s required under federal law. He also testified that the car would perform differently depending on how the car was driven. As a result, the company claimed it was innocent and did not deceive anybody.

 

The ruling for the class-action settlement will be made in March, and those auto loan borrowers who wish to decline the deal must do so by Feb. 11.