Purchasing a car that constantly suffers from the same mechanical issues over and over would leave a sour taste in anyone’s mouth. Sound like your situation? You may have a lemon on your hands.
A lemon is a vehicle with such severe manufacturing issues that it’s inoperable, unsafe, and unfixable. Fortunately, there are federal laws to protect consumers entitling them to replacements or refunds. There are also protections at the state level as well, but these are less straightforward. The types of vehicles covered by lemon law, possible outcomes, qualifying parameters, and most importantly, the criteria for a vehicle to be considered a lemon will vary by state.
Here’s a quick guide on what lemon laws are, how they work, and what to do in the instance you have a dud of a vehicle on your hands.
Table of Contents:
What are lemon laws?
Lemon laws were put into place to protect consumers who have purchased or leased defective consumer goods. These laws state that should a manufacturer be unable to repair a consumer good, like a car, and the defect is substantial and cannot be repaired then the good must be replaced or the money must be fully refunded.
In addition to federal lemon laws which protect consumers nationwide, all 50 states (as well as the District of Columbia) have their own lemon laws as well.
Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act was enacted in 1975. It requires manufacturers and sellers of consumer products over $10 to provide detailed warranty information and terms; designating a warranty as “full” or “limited”; that the terms are visible and easily readable before purchase. It does not, however, apply to products sold for resale or for commercial purposes, nor does it require that a warranty is offered at all. The goal of this act is to provide transparency and prohibits manufacturers/sellers from deceptive or misleading warranty practices.
This act also makes it easier for consumers to take court action in the case of a breach of warranty. Consumers who win their claim can have the defendant pay their attorney fees, court costs, and other expenses.
The Uniform Commercial Code
The Uniform Commercial Code was first enacted in 1959. The purpose of the law is to give consumers the right to receive a replacement or a full refund in case their consumer good is a lemon. The kicker? The UCC does not specify what constitutes a lemon. It’s up to the courts to decide whether the manufacturer or seller should provide a replacement or refund for the vehicle.
Another impactful aspect of the UCC is that it established the concept of “reasonable time.” Buyers are allowed to reject a vehicle if a defect is detected within a “reasonable time” and addressed within a “reasonable time” by the manufacturer or seller if it’s still under warranty. This too, is up to the courts to decide. However, this flexibility can easily be used in the buyer’s favor.
State-specific lemon laws
There’s a lot that will vary depending on the individual state:
- Specifics of what type of vehicle lemon laws apply to (i.e. a new, used, or leased vehicle)
- What qualifies as a lemon
- Required attempts to rectify the issue
- Possible compensation
Some states have time-based limitations for how long a newly purchased vehicle can fall under lemon law (e.g. problems that happen within the first year). Others may have distance-based parameters (e.g. within 12,000 miles), and many states have a mixture of both. Other limitations on potential eligibility include the weight of the vehicle (e.g. must weigh less than 15,000 pounds).
These will ultimately dictate the available recourse for someone who bought a lemon. Learn more about the specifics of the lemon law legislation in your state.
Are used and leased cars covered under lemon laws?
Lemon laws typically cover new cars, however, there are some states that include used and leased vehicles under lemon law protection: Connecticut, Massachusetts, Minnesota, New Jersey, New Mexico, and New York.
Don’t live in a state that explicitly protects used cars? You may have a workaround. Used vehicles purchased at a dealership may still be sold under a manufacturer’s warranty and/or a dealer’s warranty, which would fall under lemon laws. On the other hand, cars purchased from individual sellers, or private party sellers, may not be protected under lemon laws, especially if the car was sold “as is.”
What is a lemon law buyback?
A lemon law buyback is the process of a manufacturer either being forced to or voluntarily reacquiring a vehicle. Lemon buybacks only happen a warranty defect that substantially affects the use of the car or impairs the value and safety of the vehicle. This typically takes place once a lemon law dispute has been concluded. Generally, buybacks result in a refund of all funds put toward the vehicle purchase or lease. This includes down payments, loan or lease payments, vehicle registration, as well as reimbursement of incidental expenses like rentals or towing services.
Defining a “reasonable number of attempted repairs”
Prior to replacing the automobile entirely or issuing a full refund, the manufacturer or seller is required to attempt repairing the defect free-of-charge a certain minimum number of times. This ensures consumers do not have to deal with endless attempted repairs on the car or dealing with long periods with a car in the repair shop.
Although specifics vary slightly per state, these are the cases in which a car must be replaced or refunded for being a lemon:
- Safety defect: Should there be a safety defect, the car would only need one repair attempt before it must be replaced or refunded.
- Time in the shop: If the car has been in the repair shop over a specified number of days within a year, then you are eligible for a replacement or refund.
- Other significant defects: If your car has had issues that have seemingly been irreparable after three or four repair attempts, then you qualify for replacement or refund.
Defining a “substantial defect”
A substantial defect is a flaw or issue that impairs a vehicle’s ability to function normally, its safety, or its value. To qualify as having a substantial defect, your car must be unsafe or inoperative. What is considered substantial varies by state, so consult your state Attorney General’s website for specific guidance where you live.
What should I do if I bought a lemon?
First, make sure to have the necessary documentation. Then, notify the dealer or manufacturer and allow them a reasonable number of attempts to fix the vehicle. If the vehicle is still having issues you are entitled to a replacement or a full refund. Should the demand be refused, you can file a civil lawsuit demanding a full refund or a replacement of the same model of vehicle.
Here is a list of important documents to keep and actions to take in a lemon law case:
Purchase date and contract
Make sure you have your contract with the date of purchase in a safe place to use as evidence for your case. Always make a backup copy or two and stash them away in your records or scan the contract so you can have a virtual copy.
Date of first reported issue
Keep a journal and write down any and all issues with the vehicle and the circumstances in which the issues arose as well as how they were handled by the dealership or manufacturer. Continue to do so with any subsequent occurrences of the same problem or any new issues or concerns that may arise.
Make sure to keep records of any communication – text messages, emails, social media texts, voicemails, and even phone calls – between you and the manufacturer or dealer. When it comes to phone calls, you can note the date, time, and duration of calls for your records. Otherwise, you can try getting a detailed phone bill that showcases the same evidence.
Service and repair records
Keep detailed records of every service and repair that the vehicle required. For example, make sure to keep all service invoices. And jot down the length of time the vehicle was in the repair shop because the number of days or length of time the vehicle spends in the shop can be used as evidence to prove the car is a lemon.
Hire an attorney
If you find that you are overwhelmed by the resistance of the dealership or manufacturer, it may be time to hire an attorney who knows the ins and outs of lemon laws. Also, they may aid your attempts at getting back at the dealership by taking on your case on a contingency fee – i.e. getting the dealership to pay your legal fees.
How do I know if the car I am looking to buy is a lemon?
The good news is that often you can find a pre-owned car’s vehicle history, including any title issues, on sites like Carfax. However, be aware that more than 60% of states do not require any special title branding for lemons. That means you may need to view the vehicle history report carefully to spot a potential lemon.
When you are purchasing a used car, you want to ensure the vehicle has not been in any major collisions or suffered any serious damages. A car’s title will reflect these issues, and if the vehicle has been compromised it will be assigned a branded title that is tied to the vehicle identification number (VIN).
Also, pay attention to the sections of a vehicle history report that specify car ownership and service records. If you notice that the manufacturer has purchased the car back from an individual, or if there have been three to four attempted repairs in a short period of time, then those are red flags you need to be aware of before purchasing that vehicle.
Although thousands of unsuspecting consumers are sold lemons throughout the U.S. on a yearly basis, lemon laws were put in place to offer those individuals protection. However, be sure to check the lemon laws in your state because each state has different laws and requirements.
Should you fall victim to a lemon purchase, know that you may not have to deal with it for very long if you take swift action. And if you are having trouble with the dealership and need further assistance, consider hiring an attorney to help with your quandary.
1. Your state has a lemon law
Most states have some form of a lemon law to protect car buyers when they buy a new car, and some lemon laws also cover used or leased cars. However, requirements vary greatly by state.
To find out whether your car may qualify under state lemon law, search your state consumer protection office, department of motor vehicles or attorney general website for the lemon law statute. You can also look up state lemon laws at the Better Business Bureau, but always verify accuracy with the official state website posting the lemon law.
2. A defect is a serious safety hazard
If your car accelerates without warning or the brakes fail repeatedly, those could be considered safety hazards. However, if your car simply fails to start most mornings, that defect probably doesn’t pose a safety threat.
Your state lemon law ultimately defines what constitutes a safety hazard. For example, Washington’s lemon law defines a serious safety defect as a “life-threatening malfunction that impairs the driver’s ability to control or operate the vehicle or creates a risk of fire or explosion.”
Even if your vehicle defect doesn’t pose a serious safety hazard, it may still qualify under other lemon law requirements.
3. The defect substantially impairs the vehicle’s value
It’s hard to resell a vehicle that stalls every time it hits 70 mph or has a faulty steering system that can’t be fixed. Most state lemon laws recognize this, so if your car’s defect makes it impossible to sell at the model’s current market value and you meet other state requirements, you may be able to file a lemon law claim.
4. You’ve made reasonable repair attempts
In most states, before you can file a lemon law claim, you must have made multiple attempts to repair the defect or hazard.
For example, Texas requires you to have taken your vehicle to the dealership for repair at least four times for the same defect within the first two years or 24,000 miles OR prove that the car was out of service for 30 days or more due to defects covered by the warranty during the first 24 months or 24,000 miles that still exist.
5. Your vehicle was out of service for the required number of days
Many states require that your vehicle spent at least 30 days out of service while undergoing repair attempts within a specific timeframe. Others require fewer days but still adhere to a time limit from purchase.
For example, Florida requires that your car must have been out of service for repair of the defect for 15 days or more within 24 months of the date of delivery.
6. Your car meets mileage and time limit requirements
Each state has requirements for eligibility to file a lemon law claim. For example, to meet the basic qualifications for lemon law compensation in Massachusetts, the vehicle defect must be discovered within the “term of protection” of one year or 15,000 miles of use from the original date of delivery.
State lemon laws differ, but generally, the defect must be a problem that is covered by a manufacturer’s written warranty.
7. Reports to the manufacturer failed to resolve the problem
State lemon laws typically require you to first try to remedy the defective car situation by contacting the manufacturer or its authorized dealer. Send the manufacturer a complaint letter by certified mail explaining the defect or defects, along with copies of work orders and invoices and a proposed solution or request for a refund.
If the dealer doesn’t repair the defect or reimburse you, either monetarily or with a new car, you may be able to file a lemon law claim.
8. You aren’t obligated to resolve the situation through arbitration
The vehicle manufacturer may require you to go through arbitration to resolve the dispute before filing a lemon law claim. For example, in Minnesota, consumers must go through arbitration if the manufacturer requires it before filing a lawsuit under state lemon law.
State laws on arbitration vary, however. For instance, in Massachusetts, the manufacturer can’t require you to use its arbitration program. In the state of Washington, car owners can request an arbitration hearing through the attorney general’s office to determine whether claims meet state lemon law requirements.
Q:Are commercial vehicles exempt from lemon law?
Q:Are leased cars covered by lemon laws?
Q:Are new cars covered by lemon law?
Q:Can a car be refunded under lemon law?
Q:Can a car be replaced with a lemon refund?
Q:Can a lemon law vehicle be resold?
Q:Can a used car be covered under the lemon law?
Q:How can I find out if my car is a lemon?
Q:How long does the lemon law process take?
Q:How much would it cost to hire a lemon law attorney?
Article last modified on July 18, 2023. Published by Debt.com, LLC