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Lemon Laws

5. Lemon Laws

Everyone has heard of someone who has bought a new car that was a lemon. The car had either one major defect that could not be repaired or numerous minor defects that were always in need of repair.

Prior to the 1970s, when consumer advocacy hit its peak and numerous laws were enacted to protect the buyers of lemons, the only recourse the purchaser had was his or her warranty. As long as the manufacturer and dealer exercised their best efforts to fix the car while it was under warranty, the owner was stuck with the lemon. After the warranty period expired, the owner paid for the repairs.

Lemon laws, or new car warranty laws, were enacted to place limits on what the consumer must endure should he or she purchase a lemon. Under the terms of the lemon laws, if the car cannot be fixed, the consumer must be compensated, either with a new car or with a cash refund. States are split among those that leave the decision of the specific remedy up to the consumer, manufacturer, or seller. All states now have lemon laws. In many states, the consumer has at least one year from the date of purchase to make a claim under the law. Most states allow the consumer two years or 24,000 miles, whichever comes first, to make a claim.

Table 5: Lemon Laws
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
ALABAMA8-20 A-1, et seq. Motor Vehicle Lemon Law RightsNonconformity to any applicable express warranties24 months following delivery of vehicle or 24,000 miles, whichever comes firstConsumers option: replace with comparable new car or accept return of car and refund consumer full contract price and nonrefundable portions of extended warranties and services, all collateral charges, all finance charges incurred after first reported nonconformity and incidental damages; all this minus allowance for consumers use of nonconforming vehicle
ALASKA45.45.300, et seq. Motor Vehicle WarrantiesNonconformity to applicable express warrantiesTerm of express warranty or within 1 year from date of delivery to original owner, whichever is firstReplacement of vehicle with new, comparable one or refund full purchase price less a reasonable allowance for use of motor vehicle
ARIZONA44-1261, et seq. Motor Vehicle WarrantiesNonconformity to applicable express warranties of any defect/condition which substantially impairs use and value of motor vehicleTime period of express warranty or the period of 2 yrs. or 24,000 miles, whichever is earlierReplacement with new motor vehicle or refund to consumer of full purchase price including all collateral charges, less a reasonable allowance for consumers use of vehicle; maximum liability of seller is purchase price
ARKANSAS4-90-401, et seq. New Motor Vehicle Quality Assurance ActNonconformity to applicable manufacturers express warranty or implied warranty of any defect/condition that substantially impairs use, value, or safety of motor vehicle24 months following delivery of vehicle or 24,000 miles, whichever comes laterConsumers option: replace with new motor vehicle acceptable to consumer or repurchase motor vehicle and return full purchase plus collateral and reasonably incurred incidental charges; less reasonable offset for use and physical damage
CALIFORNIACiv. §1793.22Tanner Consumer Protection ActNonconformity to applicable express warranties which substantially impairs the use, value, or safety of motor vehicle18 months from date of delivery to buyer or 18,000 miles, whichever occurs firstReplace the goods or reimburse buyer in an amount equal to the purchase price paid by the buyer, less the amount directly attributable to the use by the buyer prior to the discovery of the nonconformity
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
COLORADO42-10-101, et seq. Motor Vehicle WarrantiesNonconformity to express warranties which substantially impairs use and market value of motor vehicleWarranty period or within 1 year following date of original delivery of vehicle to consumer, whichever is the earlier dateManufacturers option: replace with comparable vehicle or accept return of vehicle from consumer and refund full purchase price, including sales tax, fees and similar governmental charges, less a reasonable allowance for consumers use
CONNECTICUT42-179New Automobile WarrantiesNonconformity to applicable express warranties which substantially impairs the use, safety, or value of motor vehicleRepair defects covered by written warranties within 2 years following original delivery or first 24,000 miles, whichever is firstReplace vehicle with new vehicle acceptable to consumer or refund (upon accepting return of vehicle) the (1) full contract price including but not limited to charges for undercoating, dealer prep, transportation, and installed options; (2) all collateral charges, including but not limited to sales tax, license and regulation fees, and similar government charges; (3) all finance charges after he first reports conformity and during any subsequent period vehicle is out of service due to repair; (4) all incidental damages, less a reasonable allowance for consumers use
DELAWARETit. 6 §5001, et seq. Automobile WarrantiesNonconformity to any applicable express warranty which substantially impairs the use, value, or safety of motor vehicleTerm of warranty or during period of 1 year following date of original delivery to consumer, whichever is earlierConsumers option: replace with comparable new automobile acceptable to consumer or repurchase and refund full purchase, including all credits and allowances for any trade-in vehicle
DISTRICT OF COLUMBIA50-501, et seq. Automobile Consumer Protection Act of 1984Nonconformity to all warranties which results in significant impairment of vehicleFirst 18,000 miles of operation or during period of 2 years following date of delivery to original purchaser, whichever is earlierConsumers option: replace with comparable vehicle or accept return and refund full purchase price, including all sales tax, license fees, registration fees, and any similar governmental charges; less reasonable allowance for use
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
FLORIDA681.10, et seq. Motor Vehicle Warranty Enforcement ActNonconformity to warranties which significantly impair the use, value, or safety of motor vehicle24 monthsConsumers unconditional option: Replace with vehicle acceptable to consumer or repurchase vehicle and refund to consumer full purchase price, including all reasonably incurred collateral and incidental charges, less reasonable offset for use
GEORGIA10-1-780, et seq. Motor Vehicle Warranty Rights ActNonconformity to applicable express warranties which significantly impair the use, value, or safety of motor vehicleWithin 12 months following purchase of vehicle or 12,000 miles following purchase of vehicle, whichever occurs firstConsumers option: replace with identical or reasonably equivalent vehicle including payment of all collateral charges which consumer/ lessor will incur a second time, less reasonable offset for use or repurchase and refund purchase price plus all collateral charges and incidental costs, less reasonable offset for use
HAWAII481I-1, et seq. Motor Vehicle Express Warranty Enforcement (Lemon Law)Nonconformity to all applicable express warranties that substantially impairs the use and market value of vehicleExpress warranty period, 2 years after original delivery or first 24,000 miles, whichever occurs firstReplace with comparable vehicle or accept return and refund the full purchase price including all collateral charges, excluding interest, and less a reasonable allowance for consumers use of vehicle
IDAHO48-901, et seq. Not specifiedNonconformity to applicable express warranties which significantly impairs use, value, or safety of vehicle2 year period following date of original delivery of vehicle to buyer or first 24,000 miles or period of express warranty, whichever is earlierConsumers option: replace with comparable new vehicle or accept return and refund full purchase price including all collateral charges, less a reasonable allowance for buyers use of vehicle
ILLINOIS815 ILCS 380/1, et seq. New Vehicle Buyer Protection ActNonconformity to applicable express warranties which significantly impair the use, value, or safety of motor vehicleWithin statutory warranty period: the period of one year or 12,000 miles, whichever occurs first after date of delivery of a new vehicle to consumerReplace with new vehicle of like model line, if available, or otherwise a comparable motor vehicle or accept return and refund consumer full purchase price of new vehicle, including all collateral charges, less a reasonable allowance for consumer use of vehicle
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
INDIANA24-5-13-1, et seq. Indiana Motor Vehicle Protection Act of 1988Nonconformity to applicable express warranties which significantly impairs the use, market value or safety of motor vehicle or renders vehicle nonconforming to terms of applicable manufacturers warrantyIf reported within term of protection: 18 months after date of delivery to buyer or 18,000 miles whichever occurs firstConsumers option: Replace with vehicle of comparable value, including reimbursement to buyer of any fees of transferring registration or sales tax incurred as result of replacement or refund full contract price of vehicle, including all credits and allowances for any trade-in vehicle and less reasonable allowance for use.
IOWA322G.1, et seq. Defective Motor Vehicles (Lemon Law)Nonconformity to all applicable express warrantiesTerm of manufacturers written warranty or during period of 2 years following date of original delivery of a motor vehicle to consumer or first 24,000 miles, whichever is firstReplace with identical or reasonably equivalent vehicle, including collateral and incidental charges less reasonable offset for use, or refund full purchase or lease price including all collateral and reasonably incurred incidental charges, less a reasonable offset for consumers use
KANSAS50-645, et seq. Lemon LawNonconformity to applicable warranties which significantly impairs the use or value of motor vehicle1 year from date of original delivery of vehicle to consumer or term of any warranties, whichever is earlierReplace with comparable vehicle under warranty or accept return and refund full purchase price including all collateral charges, less a reasonable allowance for consumers use
KENTUCKY367.840, et seq. Defective CarsNonconformity to applicable express warranties which significantly impairs the use, value, or safety of the motor vehicleFirst 12 months following date of delivery or first 12,000 miles, whichever is firstConsumers option: replace vehicle with comparable motor vehicle or accept return and refund full purchase price including amount paid for vehicle, finance charge, all sales tax, license fee, registration fee, any similar governmental charges, plus all collateral charges, less reasonable offset for use
LOUISIANA51:1941, et seq. Louisiana Lemon LawNonconformity to applicable express warrantiesTerm of warranty or during period of 1 year following date of original delivery, whichever is earlierManufacturers option: Replace with comparable new motor vehicle or accept return and refund full purchase price plus any amounts paid by the consumer at the time of sale and all collateral costs, less a reasonable allowance for use
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
MAINE10-1161, et seq. Maine Lemon LawNonconformity to all express warranties which significantly impairs use, safety, or value of vehicleTerm of express warranties within a period of 3 years following date of original delivery to consumer, or during first 18,000 miles, whichever is earlier dateBuyers option: replace with comparable new vehicle or accept return of vehicle and refund full purchase price (or in case of lease, payments made so far) including any paid financing charges, all collateral charges, and incidentals, less reasonable allowance for use
MARYLANDCom. Law §§14-1501, et seq. Automotive Warranty Enforcement ActNonconformity to all applicable express warranties which significantly affects use or market value of vehicleWarranty period equal to or greater than first 15,000 miles or first 15 months following date of original delivery of vehicle to consumerConsumers option: replace with comparable motor vehicle acceptable to customer or accept return and refund full purchase price including all excise tax license fees, registration fees, and any similar governmental charges, less reasonable allowance for consumers use (not to exceed 15% of purchase price) and for damage not attributable to normal wear
MASSACHUSETTSCh. 90§7N½Not specifiedNonconformity to applicable express warranties or implied warranty which significantly affects use, market value, or safety of vehicleTerm of protection: one year or 15,000 miles of use from date of original deliveryManufacturers option: replace with vehicle acceptable to consumer or accept return and refund full contract price including all credits and allowances for any trade-in vehicle, less a reasonable allowance for use
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
MICHIGAN257.1401, et. seq. Warranties on New Motor Vehicles ActNonconformity to manufacturers express warranties that significantly affects use or value of vehicleTerm of manufacturers express warranty or 1 year from date of delivery of new motor vehicle to original consumer, whichever is earlierManufacturers option: replace with a comparable replacement vehicle currently in production and acceptable to consumer or accept return of vehicle and refund full purchase price including cost of any options or other modifications installed or made by or for the manufacturer, less a reasonable allowance for consumers use of vehicle, not to exceed 10¢ per mile driven at time of initial report of same defect or conditions or 10% of purchase price, whichever is less, and less an amount equal to any appraised damage that is not attributable to normal wear and tear; consumer has right to demand refund
MINNESOTA325F.665Not specifiedNonconformity to all applicable express warranties which significantly affects the use or market value of vehicleDuring term of applicable express warranty or during period of 2 years following date of original delivery of vehicle to consumer, whichever is earlierBuyers option: Replace with comparable vehicle or accept return and refund to consumer full purchase price including cost of any options or other modifications made/installed/ arranged by manufacturer (or agents or dealer) within 30 days of original delivery, and all other charges, less a reasonable allowance for consumer use of vehicle
MISSISSIPPI63-17-151, et seq. Motor Vehicle Warranty Enforcement ActNonconformity to all applicable express warranties which significantly affects the use, market value, or safety of vehicleTerm of express warranties or during period of 1 year following date of original delivery of motor vehicle to consumer, whichever period expires earlierConsumers option: replace with comparable vehicle acceptable to consumer or accept return and refund full purchase price, including all reasonably incurred collateral charges, less a reasonable allowance for consumers use
MISSOURI407.560, et seq. New Motor Vehicle Warranties, Nonconformity (Lemon Law)Nonconformity to all applicable express warranties which significantly affects the use, market value, or safety of vehicleTerm of express warranties or during 1 year following date of original delivery to consumer, whichever expires earlierManufacturers option: replace with comparable new vehicle acceptable to consumer or take title from consumer and refund full purchase price, including all reasonably incurred collateral charges, less reasonable allowance for use
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
MONTANA61-4-501, et seq. Not specifiedNonconformity to all applicable express warranties which significantly affects the use, market value, or safety of vehicleWarranty period within 2 years after date of original delivery to consumer or during first 18,000 miles of operation, whichever is earlier; however, if consumer notifies manufacturer in writing of nonconformity within warranty, manufacturer must fix regardless of expiration of warrantyManufacturers option: replace with new vehicle of same model and style and of equal value unless for reasons of lack of availability such replacement is impossible, in which case it shall be replaced with vehicle of comparable market value or accept return and refund full purchase price plus reasonable collateral and incidental damages, less a reasonable allowance for consumers use of vehicle
NEBRASKA60-2701, et seq. Not specifiedNonconformity to all applicable express warranties which significantly affects the use or market value of vehicleTerm of such express warranties or during period of 1 year following date of original delivery of new vehicle to consumer, whichever is earlierReplace with comparable vehicle or accept return and refund full purchase price including all sales tax, license fees, registration fees, and any similar government charges, less a reasonable allowance for consumers use
NEVADA597.600, et seq. Not specifiedNonconformity to all applicable express warranties which significantly affects the use or market value of vehicleBefore expiration of manufacturers express warranties or no later than 1 year after date of delivery to original buyer, whichever is earlierReplace with comparable vehicle of same model having same features; if vehicle cannot be delivered within reasonable time, then a comparable vehicle substantially similar to replaced vehicle or accept return and refund full purchase price including all sales tax, license fees, registration fees, and other similar governmental charges, less a reasonable allowance for consumers use
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
NEW HAMPSHIRE357-D:1, et seq. Not specifiedNonconformity to all applicable express warranties or implied warranties which significantly affects the use or market value of vehicleTerm of express/ implied warranty or within 1 year following date of original delivery, whichever is earlierWithin 30 days after an order by the New Hampshire new motor vehicle arbitration board, the manufacturer shall at consumers option replace the motor vehicle with a new motor vehicle or accept return and refund full purchase price and all credits and allowances for trade-in/down payment, license fees, finance charges, credit charges, registration fees and other similar charges and incidental and consequential damages less a reasonable allowance for use.
NEW JERSEY56:12-29, et seq. Not specifiedNonconformity to express warranties which significantly affects the use, market value, or safety of vehicleTerm of warranty or during period of 1 year following date of original delivery to consumer, or 12,000 miles of operation, whichever is earlierOption of consumer: accept return and refund full purchase price including any stated credit/allowance for consumers used motor vehicle, cost of any options/ other modifications arranged, installed/ made by manufacturer within 30 days after date of original delivery and sales tax, license and registration fees, finance charges and other incidental fees less a reasonable allowance for use
NEW MEXICO57-16A-1, et seq. Motor Vehicle Quality Assurance ActNonconformity to all applicable express warranties which significantly affects the use or market value of vehicleTerm of express warranties or 1 year following date of original delivery, whichever is earlierReplace with comparable vehicle or accept return and refund full purchase price including all collateral charges, less a reasonable allowance for consumers use of vehicle
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
NEW YORKGen. Bus. §198-aNew Car Lemon LawNonconformity to all express warrantiesFirst 18,000 miles or during period of 2 years following date of original delivery, whichever is earlier reporting of nonconformity by consumersConsumers option: replace vehicle with comparable motor vehicle or accept return and refund full purchase price, or if applicable, the lease price and any trade-in allowance plus fees and charges less reasonable allowance for consumers use in excess of first 12,000 miles pursuant to mileage deduction formula and a reasonable allowance for any damage not attributable to normal wear and improvements; vehicle must be sold and registered in New York
NORTH CAROLINA20-351, et seq. New Motor Vehicles Warranties ActNonconformity to all applicable express warranties which significantly affects the value of vehicleFor period of 1 year or term of express warranties, whichever is greater, following date of original delivery of vehicle to consumer; express warranties for a new motor vehicle shall remain in effect at least 1 year or 12,000 miles; can occur no later than 24 months or 24,000 miles following original deliveryConsumers option: replace with comparable new vehicle or accept return and refund full contract price, all collateral charges, all finance charges incurred since reporting nonconformity, and any incidental damages and monetary consequential damages, less reasonable allowance for consumers use
NORTH DAKOTA51-07-16, et seq. Not specifiedNonconformity to all applicable express warranties which significantly affects the use or market value of vehicleTerm of express warranties or during period of 1 year following date of original delivery to consumer, whichever is earlierReplace with comparable vehicle or accept return and refund full purchase price, including all collateral charges, less reasonable allowance for consumers use
OHIO1345.71, et seq. Nonconforming New Motor Vehicles LawNonconformity to express warranty of the manufacturer or distributor which substantially impairs the use, value, or safety of a motor vehicle1 year following date of original delivery or during first 18,000 miles, whichever is earlierConsumers option: replace with new vehicle acceptable to consumer or accept return of vehicle from consumer and refund full purchase price, all collateral charges, all finance charges, and all incidental damages
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
OKLAHOMA15 §901Not specifiedNonconformity to any applicable express warranties which significantly affects the use or market value of vehicleTerm of express warranties or during 1 year following date of original delivery to consumer, whichever is earlierReplace with new vehicle or accept return and refund full purchase price including all taxes, license, registration fees, and all similar governmental fees, excluding interest, less a reasonable allowance for consumers use
OREGON646.315, et seq. Not specifiedNonconformity to applicable manufacturers express warranties which significantly affects the use or market value of vehicleDuring period of 1 year following date of original delivery of motor vehicle to consumer or during period ending on date on which mileage reaches 12,000 miles, whichever is earlierReplace with new motor vehicle or accept return and refund full purchase/lease price paid, including taxes, license and registration fees, and any similar collateral charges, excluding interest, less a reasonable allowance for consumers use of vehicle
PENNSYLVANIATit. 73 §§1951, et seq. Automobile Lemon LawNonconformity to warranties which significantly affects the use, market value, or safety of vehicle1 year following date of actual delivery to consumer, within first 12,000 miles of use or during time of the warranty, whichever may first occurPurchasers option: replace with comparable vehicle of equal value or accept return and refund full purchase price, including all collateral charges, less a reasonable allowance for purchasers use not exceeding 10¢ per mile or 10% of purchase price, whichever is less
RHODE ISLAND31-5.2-1, et seq. Not specifiedNonconformity to applicable express warranties or implied warranties that substantially impairs use, value, or safetyTerm of protection equals 1 year or 15,000 miles from date of original delivery, whichever comes firstConsumers option: replace with comparable new vehicle in good working condition or accept return and refund full contract price of vehicle including all credits and allowances for any trade-in vehicle, less a reasonable allowance for use
SOUTH CAROLINA56-28-10, et seq. Not specifiedNonconformity to all applicable express warranties which significantly affects the use, safety, or market value of vehicleWithin 1 year of purchase or first 12,000 miles of operation, whichever occurs first and if it is reported during terms of express warrantyManufacturers option: replace with comparable vehicle or accept return and refund full purchase price as delivered including applicable finance charges, sales taxes, license fees, registration fees, and any other similar governmental charges, less a reasonable allowance for consumers use of vehicle
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
SOUTH DAKOTA32-6D-1, et seq. Not specifiedNonconformity to any express warranty which significantly impairs the use, value, or safety of vehicleReported within lemon law rights pd.one year after date of original delivery of vehicle or first 12,000 miles whichever occurs earlier; however, obligation to repair does not extend beyond period of two years following delivery or 24,000 miles whichever occurs firstConsumers option: replace with comparable vehicle or accept return and refund full contract price including all incidental charges and fees
TENNESSEE55-24-201, et seq. Not specifiedNonconformity to all applicable express warrantiesTerm of applicable warranties or 1 year following date of original delivery of vehicle to consumer, whichever comes firstReplace with comparable vehicle or accept return and refund full purchase price (cost paid by consumer including all collateral charges, less a reasonable allowance for use)
TEXASOcc. Code §2301.601, et seq. Not specifiedNonconformity to all applicable express warranties which significantly affects the use or market value of vehicleTerm of such express warranties within one year of purchase or first 12,000 miles whichever occurs firstReplace with comparable motor vehicle or accept return and refund full purchase price less a reasonable allowance for owners use and any other allowances or refunds payable to owner
UTAH13-20-1, et seq. New Motor Vehicles Warranties ActNonconformity to all applicable express warranties which significantly affects the use, safety, or market value of vehicleTerm of express warranties or 1 year following date of original delivery of vehicle to consumer, whichever is earlierReplace with comparable new vehicle or accept return and refund full purchase price, including all collateral charges, less a reasonable allowance for consumers use
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
VERMONTTit. 9 §4171, et seq. Not specifiedNonconformity to applicable manufacturers express warranties which significantly affects the use, safety, or market value of vehicleTerm of warrantyConsumers option: replace with new vehicle from same manufacturer of comparable worth to the same make and model with all the options and accessories and with appropriate adjustments being allowed for any model year differences or accept return and refund full purchase price as indicated in purchase contract and all credits and allowances for any trade-in or down payment, licensing fees, finance charges, credit charges, registration fees and any similar charges, and incidental and consequential damages, less reasonable allowance for use
VIRGINIA59.1-207.9, et seq. Virginia Motor Vehicle Warranty Enforcement ActNonconformity to all warranties which significantly affects the use, safety, or market value of vehicleManufacturers warranty period or lemon law rights period ending 18 months after date of original delivery to consumer of new motor vehicleReplace with comparable vehicle acceptable to consumer or accept return and refund full purchase price, including all collateral charges, and incidental damages, less a reasonable allowance for consumers use of vehicle up to first notice of nonconformity given
WASHINGTON19.118.005, et seq. Not specifiedNonconformity to the Warranty which significantly affects the use, value, or safety of the vehicleTerm of the warranty period (period ending 2 years after date of original delivery or first 24,000 miles, whichever is first) or period of coverage of applicable manufacturers written warranty, whichever is lessConsumers option: replace with identical or reasonably equivalent vehicle including any service contract, undercoating, rustproofing, and factory or dealer installed options. Manufacturer responsible for sales tax, license and registration fees. Compensation for reasonable offset for use to be paid by consumer to manufacturer; or repurchase vehicle, manufacturer shall refund to consumer the purchase price, all collateral charges and incidental costs, less a reasonable offset for use
StateCode SectionTitle of ActDefinition of DefectsTime Limit for Manufacturer RepairRemedies
WEST VIRGINIA46A-6A-1, et seq. Not specifiedNonconformity to all applicable express warranties which significantly affects the use or market value of vehicleTerm of express warranties or during 1 year following date of original delivery of vehicle to consumer, whichever is later dateRepair or replace with comparable new vehicle which does conform to the warranties
WISCONSIN218.0171Not specifiedNonconformity to applicable express warranties which significantly affects the use, safety, or market value of vehicleTerm of warranty or 1 year after first delivery of motor vehicle to consumer, whichever is soonerConsumers option: accept return and replace with comparable new vehicle and refund any collateral costs or accept return and refund full purchase price plus any sales tax, finance charge, amount paid by the consumer at point of sale, and collateral costs, less a reasonable allowance for use
WYOMING40-17-101Not specifiedNonconformity to applicable express warranties which significantly affects the use or market value of vehicle1 year following original delivery of vehicle to consumer; if reports within 1 year, the repairs shall be made even if the 1 year period has expiredReplace with new or comparable vehicle of same type and similarly equipped or accept return and refund full purchase price including all collateral charges less a reasonable allowance for consumers use

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Lemon Laws

LEMON LAWS

Laws governing the rights of purchasers of new and used motor vehicles that do not function properly and which have to be returned repeatedly to the dealer for repairs.

Laws in all 50 states and the District of Columbia provide remedies to purchasers of defective new vehicles, often called lemons. These so-called lemon laws protect consumers from substantial defects occurring within a specified period after purchase and provide that a manufacturer must either replace the lemon with a new, comparable car or refund the full purchase price. According to the consumer advocate group Consumers for Auto Reliability and Safety, automakers repurchase 50,000 vehicles a year, about .33 percent of the 15 million vehicles sold annually.

California and Connecticut passed the first lemon laws in 1982, in response to dissatisfaction with remedies in state sales laws and the 1975 federal magnuson-moss warranty act (15 U.S.C.A. § 2301 et seq.). Magnuson-Moss and other laws previously in effect provided remedies for the breach of full warranties, but the automobile industry typically provided only limited warranties. Other states quickly followed California and Connecticut in an effort to provide relief to new-car buyers under limited warranties.

Lemon laws typically provide consumer protection for owners of new cars, trucks, and vans. A significant minority of states also provide coverage for leased vehicles. Many states specify coverage for one year from delivery or for the written warranty period, whichever is shorter; a handful of states mandate coverage for the shorter of two years or 24,000 miles.

Lemon laws cover only substantial defects, meaning defects that substantially impair the use, value, or safety of the vehicle. If a defect is safety related, the manufacturer is usually allowed just one chance to fix it before the owner may invoke the lemon law; if a defect impairs the use or value of a vehicle, the manufacturer is usually permitted three or four attempts to repair it. A consumer may also invoke the law if a vehicle is out of service for a certain number of days because of any combination of substantial defects. The time out of service is cumulative, not consecutive, and ranges from 15 to 40 days. Paint defects, rattles, cosmetic flaws, jumpy suspensions, premature wear of the tires, and the like are not normally considered substantial defects.

The purchaser of a new car typically returns to the dealership to have repair work done. Therefore, the dealer knows that a defect exists. However, lemon laws generally require that the purchaser give the manufacturer written notification of a problem within a specific time frame. The manufacturer then has a final opportunity to repair the vehicle before a lawsuit may be commenced. It has been argued that this notice requirement is unduly burdensome for consumers, who are often unaware of it. Consumer advocates have also argued that such notice is redundant. A substantial defect means that the defect would be covered by the automobile's warranty. If a car requires repair for an item covered by warranty, it is done at no cost to the consumer. The manufacturer reimburses the dealer for the warranty repair; the manufacturer would have notice of the defect when the dealer requests reimbursement from the manufacturer for the repair.

After a consumer invokes the lemon law, the parties arbitrate the matter in an attempt to resolve it. Some statutes provide for a state-run arbitration process. Others provide for arbitration provided by private groups such as the Better Business Bureau or even a manufacturersponsored panel. Arbitration is an informal trial with a panel or individual deciding the matter. Each side tells its story. Mechanics might testify on behalf of either side. Lawyers are not required but may increase a consumer's likelihood of prevailing or settling prior to the arbitration hearing.

According to one report, fewer than 10 percent of the cases handled by a manufacturersponsored panel are decided in the consumer's favor. Consumers tend to fare slightly better in cases handled by the Better Business Bureau and fare best of all under state-run arbitration procedures. An early 1990s survey of three states with state-run arbitration found that consumers were awarded a full refund or replacement car in at least half of the cases. Many states make the arbitrator's decision binding on the manufacturer but not on the consumer.

During arbitration automakers frequently argue that the consumer abused the car or failed to service the vehicle properly or that the defect does not substantially affect the car's safety or value. For this reason consumers should save all documentation about a vehicle and should keep meticulous records of all service problems. One owner of a top-of-the-line luxury car succeeded in arbitration for a whining noise in the air conditioner because an advertising brochure promised that the car would be a soothing and calming haven.

States vary on whether the manufacturer or the consumer chooses the remedy. A lemon owner is entitled to a refund of the vehicle's purchase price, including sales tax, license, and fees, or a new, comparable car—minus a deduction for the value of the owner's use of the lemon. Some states also provide that the manufacturer reimburse the owner's attorney's fees and costs for bringing the lawsuit.

Used-car purchasers must also be wary of lemons. Once a lemon has been repurchased by the manufacturer, either voluntarily or pursuant to an arbitrator's or judge's decision, scant protections prevent its resale elsewhere. States vary greatly on how much information must be disclosed to subsequent purchasers. Some states require the title of a lemon to carry a notation reflecting the lemon status. The notation varies from "nonconforming vehicle" to "defect substantially impairs use, value, or safety." A handful of states require that buyback stickers be placed on the vehicle. However, enforcement of such requirements is often a low priority for state governments, and enforcement of lemon laws effectively ends at a state's border. In response to complaints about resold lemons, in 1996 the federal trade commission (FTC) began investigating the possibility of imposing a national standard for the resale of lemons. However, the FTC did not take action after completing its inquiry.

further readings

Clark, Barkley, and Christopher Smith. 1984. Cumm. Supp. 1995. The Law of Product Warranties. Boston: Warren, Gorham, and Lamont.

Fisk, Alan. 2002. "Lemon Lawsuits: Litigation over Bad Cars, Including Class Actions, is on the Rise Across the U.S." The National Law Journal 24 (January 14): A1.

Gillis, Jack. 1996. The Car Book. 16th ed. New York: Harper-Perennial.

Kaye, Richard L. 1991. Lemon Aid: Exercising Your Rights Under the Automobile Lemon Laws. Northbrook, Ill: TeleTravel Network.

Nader, Ralph, Lowell Dodge, and Ralf Hotchkiss. 1970. What to Do with Your Bad Car: An Action Manual for Lemon Owners. New York: Grossman.

Reitz, Curtis R. 1987. Consumer Product Warranties under Federal and State Laws. 2d ed. Philadelphia: American Law Institute–American Bar Association Committee on Continuing Professional Education.

Winder, Donald J., and John Warren May. 2002. "Recent Developments in Automobile Law." Tort & Insurance Law Journal 37 (winter): 295–322.

cross-references

Automobiles.

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