Summit Honda client wonders about his lifetime-service agreement
September 1, 2009
Tracy Breinholt wants to know what will happen to his $899 lifetime-maintenance agreement with Summit Honda now that the store is out of business.
He said he’s called and emailed owner Greg Blanchard and hasn’t received a reply. After three attempts, he filed a complaint in small claims court.
Breinholt said that when he purchased a motorbike at Summit Honda he also bought a warranty from the Honda company. In order for the company to honor that warranty, he has to have the bike maintenanced every 4,000 miles. Hoping to save money over the life of the bike, he purchased the $899 package from Summit Honda.
American Honda’s Bill Savino, manager of Powersports Press, said extended service contracts are purely the domain of dealers. They’re common among all types of vehicle dealerships and are seen as a way to increase the profit margin on a vehicle. They aren’t backed by Honda.
Breinholt said he was made aware of that fact when he wasn’t allowed to work the $899 into the overall financing of the bike. He had to pay out-of-pocket for that maintenance agreement. Now he wants his money back.
Blanchard said on Monday he’s in the midst of a liquidation process to pay his creditors. First he’s trying to sell merchandise back to manufacturers. What’s left will be included in a liquidation sale in a month or two. The order in which creditors will then be paid will be determined by his bank and attorney, Blanchard said.
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After creditors with a secured interest are paid, what’s left will be distributed to everyone else with a claim, he said.
Breinholt said he’s studied his contract in search of a stipulation addressing this situation.
"It’s a short piece of paper. It says the only person who can cancel the contract is me," he said.
Jennifer Bolton, spokesperson for the Utah Division of Consumer Protection, said complaints can be made to her office, but that she cannot predict outcomes.
Breinholt said he isn’t aware of anyone else in a similar situation, but he suspects it is because not everyone with the same agreement knows the business has closed. He only found out when he stopped by to buy a new tire, he said.