What are the Lemon Laws?

All US states have laws that protect car buyers. Although the official names for these laws vary from one state to the other, with names such as the Magnuson-Moss Warranty Act and the New Motor Vehicle Warranties Act, they are collectively referred to as the Lemon Laws. The exact definition and implementation of the laws may be slightly different, but there are some general principles that are common in all states.

 

What Are the Lemon Laws?

Typically, a Lemon Law entitles a cars buyer to a remedy whenever one or more of a set of three circumstances occurs:

1. The vehicle has been unusable for more than a set period within the first year of use (usually 30 days) due to a defect.

2. The car has been into the shop for service of the same defect for a set number of times (normally 3 or 4) within a given time period and the defect still persists. Generally, the problem should be persistent for a period of between 18 and 24 months from the purchase of the vehicle.

3. The vehicle suffers a particular number of catastrophic defects – like brake or steering failure – and stays defective despite attempts to fix it. It is worth noting that this particular rule is not adopted by all states in the US.

 

What Does the Lemon Law Consider as a Defect?

Most state laws stipulate that the condition or defect should ‘substantially impair’ the vehicles use, safety or value. Some of these defects should be pretty obvious (car does not start, transmission problems, engine failure, brake failure, etc.) but some may not be as apparent (excessive tire wear, water leaks, wind noise, etc.). Speaking to an attorney will help you to determine if the issues you have with your vehicle classify it as a lemon or not.

 

The Process of Filing a Lemon Law Claim

In most states, it is necessary for you send the car manufacturer a Last Chance Letter to let them know of your vehicle’s impending lemon status. Note that the letter is sent to the manufacturer, not the dealer. This is because Lemon Laws place the responsibility of fixing the situation on the manufacturer. It is perfectly acceptable to send the Last Chance Letter before your car qualifies as a lemon outright.

As has been noted above, the car must continue to be defective for it to qualify. If the vehicle is successfully repaired and continues to operate trouble free, you do not have a case. However, if after the last repair your car still has the problem, the Lemon Law comes into play.

Once it is determined that you have a lemon in the shop or sitting on your driveway, you are entitled to have the manufacturer buy back the vehicle or offer you a replacement vehicle (non-defective and of equal value). If you opt for a refund, it is the purchase value of the vehicle, less an offset that is determined by the mileage on the vehicle before the first repair of the defect was attempted. If the car was purchased through a financing scheme, the loan is paid off, with the law requiring the financier to agree to the transaction.

For the sake of practicality, most Lemon Law cases are settled by refunding the purchase price. This is because it is less of a hassle for the manufacturer to pay off the consumer and to settle the attorney’s fees. Often, if the consumer is given a settlement that makes it worth their while, everyone walks away happy. Manufacturers often avoid buying back defective cars because disposing of them has ramifications which are an altogether different story.

The vehicle manufacturer pays the related court and attorneys’ fees following a successful action. This is the reason why many attorneys can afford to take on Lemon Law cases, since their complicated nature makes the costs and statutory fees prohibitive to the average consumer.

 

Conclusion

To be protected, in case you have purchased a lemon, there are a few steps you must take. First, save all your purchase documents. When the car starts showing signs of trouble, send it back to the dealer, ensuring that it is written up properly. Next, obtain a copy of the repair order from the dealership and save it.

In some jurisdictions, you may be compelled to go through an arbitration process first before filing a suit. Some others may have punitive measures following a successful action. However, the court process is not designed to make you rich, but to make you whole. The idea is to complete the entire process as quickly as possible and to your satisfaction. A Lemon Law attorney will talk to you and take on your case at no charge if they feel your case is strong enough, since their fees will be settled by the manufacturer. As the saying goes, “When life gives you lemons, make lemonade.”