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Lemon Laws

Lemon laws, found in every state, provide another layer of protection for vehicle owners. Lemon Laws entitle aggrieved consumers to a replacement vehicle, or a full refund, where the vehicle is so defective that the dealer cannot satisfactorily repair it. Before a lemon law can be invoked, the dealer must be given a reasonable opportunity to repair the defect.

Lemon laws usually apply to purchases or leases of new cars, trucks, motorcycles or motor homes. Additionally, lemon laws cover “demonstrator” or “executive” vehicles that are less than a year old and still under original warranties. Generally, the laws do not apply to purchases of mopeds or trailers.

Lemon laws vary from state to state. Basically, a mechanical defect must be one which substantially impairs the use, value, or safety of a vehicle. Lemon laws usually have time or mileage limits. A defect must be presented to the manufacturer or authorized dealer within these limits in order to be covered under the lemon law.

Once notified of a problem with a vehicle, the manufacturer must be allowed to repair the defect within a reasonable number of repair attempts. If the manufacturer cannot repair the defect in the vehicle within a reasonable number of repair attempts, the vehicle owner will be entitled to a refund or replacement. How many repair attempts constitutes a “reasonable number” varies from state-to-state, but a typical number is four repairs for the same problem within six months or a year. A lemon law may also be invoked where a vehicle with substantial defects is out of service for a certain number of days during a specified time period.

The nature of the defect also bears on the number of repair attempts permitted. If the defect could cause death or serious bodily injury, only one repair attempt will be allowed before the vehicle is presumed to be a lemon. If the defect is not so serious or potentially dangerous, then the manufacturer will be permitted additional repair attempts to correct the defect.

If an owner believes he has purchased a lemon, he should write the manufacturer and request a replacement vehicle or a refund. In some states the dealer must also be notified. Assuming the request is granted, the owner will not be allowed to keep the defective vehicle. If the defective vehicle is replaced, the manufacturer should refund repair costs and charge the owner nothing for mileage. If a refund is given instead of a replacement vehicle, the refund should include:

  • The entire purchase price
  • Any sales tax paid on the vehicle
  • Finance charges
  • The cost of repairs to the defective vehicle
  • A deduction for mileage

If a manufacturer refuses to give a refund or provide a replacement of a defective vehicle, an owner may be able to get relief by submitting her complaint to an arbitration forum. This is often quicker and less expensive than litigation. In some states, if the manufacturer of the vehicle has a state certified arbitration program, the owner must use it before suing the manufacturer in court for a refund or replacement vehicle.

In some cases, a court may need to decide if a vehicle is a lemon and what remedy to provide. If an owner prevails in a lawsuit against the manufacturer, some jurisdictions allow damages worth double the vehicle’s purchase price and repair costs, in addition to other costs and attorney fees.

An owner needs to provide documentary evidence to demonstrate that a car is a lemon. This includes all records of any repairs done, including dates of service and descriptions of the exact repairs made. This information is particularly critical when the car is repaired at some place other than the dealership where the car was purchased. In addition to repair records, an owner should retain the purchase contract, any written warranties, and should note on a calendar when the vehicle is at a dealership or other shop for warranty repairs. If a vehicle is operable, it may be driven while the appropriate authorities determine whether it is a lemon. If the vehicle is indeed a lemon, the dealership is often allowed to deduct a certain amount for mileage from the refund.

In many states consumers who purchase a used car are also covered under the lemon laws. For example, an owner who has recently purchased a used car may be entitled to cancel the purchase and receive a refund, where the vehicle fails a safety inspection. Vehicle safety inspections are mandatory in most states. Generally, the safety inspection must occur within a certain period of time after the purchase of the car, and the repairs must exceed a stated percentage of the purchase price of the car. In some states, a vehicle that has passed its inspection may still qualify as a lemon. Moreover, some jurisdictions apply lemon laws to both dealers and private sellers.

Inside Lemon Laws