Who doesn’t look forward to the day they can drive their new car off the lot and take it home? Sadly, some people leave the dealership with a “lemon” on their hands. It might be a faulty parking brake you weren’t aware of, bad seals that let water in on a rainy day, or a transmission that seizes up a week after you bought the car. Lemons come in all shapes and sizes but one thing is for certain – they are the last thing any car owner wants.
No driver buys a car knowing these issues will arise and thankfully there are protections for consumers who end up with a lemon. At both the federal and state level, laws exist to protect consumers who have unknowingly bought defective and unsafe vehicles, as well as to hold the manufacturers accountable. Below is all the information you’ll need to determine if your car is a lemon, and if so, what you should do.
What is a "Lemon" Car?
A lemon is a vehicle that has substantial mechanical or electrical problems, covered by warranty but still not fixed after a number of repairs. These problems must exist within a certain timeframe after the purchase of the car (timeframes vary by state). With the exception of a handful of states, lemon laws only apply to new vehicle purchases. A car that qualifies as a lemon is often subject to return and refund on the dealer or manufacturer’s behalf.
The legal definition of a “substantial” issue or defect can sometimes be confusing to drivers. Typically, these are defects that directly affect a car’s use and/or safety on the road – not things like broken air conditioning buttons or poor stitching on the seat fabric. In order for these defects to fall under lemon law protection, they must be a manufacturing defect, not a result of driver use or abuse of the car.
Federal and State Lemon Laws
Lemon laws exist at both the federal and state levels, and both can act quite different depending on the state that you live in. Federal lemon law is derived from the Magnuson-Moss Warranty Act of 1975. This law set the national standard for all consumer warranties, including cars as well as many other consumer goods. This act was designed to ensure warranties were easier for consumers to understand and enforce.
Federal laws ensure the honoring of warranties. That said, states really determine when a new car qualifies for lemon status and consumer payback. Below are the basic elements commonly seen across the states:
- Multiple repair attempts: Most states require written record of attempts to fix the issues with the car, covered by the existing warranty. There must be a record of repeat issues even after repair attempts
- Reported Problem Timeline: While each state varies, most repair reports must fall within the 1-2 years of ownership or within the first 12,000 – 24,000 miles driven. Typically the window for lemon law closes on whichever milestone is reached first
In some states, certain types of repairs carry more weight in a lemon law claim. For instance, repairs must fix issues with brakes or steering on the first attempt. Whereas other issues require a pattern of repair attempts, if the manufacturer cannot fix critical components like steering or braking the first time around then your car may be eligible for a replacement car sooner than you think.
If you have any questions about lemon laws in your particular state, check out the Better Business Bureaus’ AUTO LINE for further reference.
Used Car Lemon Laws
In most cases, lemon laws only apply to new car purchases. While some used cars do come with warranty plans, for the most part they primarily operate on an “as is” basis. To date, there are only six states with active and enforceable used car lemon laws. These states are Connecticut, Massachusetts, Minnesota, New Jersey, New Mexico and New York. If you live in those states, you may be able to take advantage of lemon laws for new and used cars.
All is not lost though for the millions of other used car owners in other states. Many states actively protect the rights of used car buyers. There are unfair and deceptive business practice laws a consumer can utilize if they feel the seller of their car was hiding anything about its history.
Another useful law for used car owners is the Federal Trade Commission’s Used Car Rule. This law ensures all used cars are sold with a Buyer’s Guide that indicates whether a car is being sold “as is” or with a warranty. It also mandates the percentage of cost the dealer will pay under that warranty.
Be aware that consumers can hold sellers and dealerships accountable only in used car lemon law states where the dealer or manufacturer are required to replace or refund the car itself.
Getting Rid of Your Lemon Car
Once the car is officially a lemon, a driver is entitled to either a refund or a new car from the manufacturer. In order to prevent just anyone from returning a car, there are a few steps you have to take before you can return your defective car.
Note that while it is not required to hire an attorney to deal with a lemon law claim, they can be extremely useful resources. A lawyer can help expedite the process and ensure you take the right steps so the manufacturer doesn’t deny your claim.
- Step 1 – Gather Records: You are about to enter into a legal process, so be prepared. Have documentation of repairs, dates of when issues with the car arose, and any correspondence with the manufacturer or dealer. As with any legal undertaking, the more information you have on file the better your chance of winning your case.
- Step 2- Notify the Manufacturer: The first official action you must take to get a refund is to alert the manufacturer that you believe your car is a lemon.
- Step 3 – Choose Arbitration Process: Each manufacturer has their own arbitration program used to settle lemon law claims. In some cases the company will choose, but sometimes you get to choose. If you have the option, it is often best to go with a state agency rather than the private arbitration program of the company’s selection.
- Step 4 – Present Case & Information: The arbitrator will review both sides of the dispute and come to a decision, typically within 60 days. If the arbitrator decides the information presented makes the vehicle in question a lemon, you will receive financial remuneration.
- Step 5 – Appeal if Necessary: If for some reason the arbitrator ruled against you but you feel there is still a case, you can appeal it to the courts. Be aware that the initial opinion does carry a lot of weight in the courts, so be sure you are ready to fight the assessment with an attorney on hand.
Be aware that this process can take some time to complete. During that time, you will still have a lemon parked in your garage. Be sure not to drive the car if it poses any serious risk to your safety and well-being. Often, it’s best not to drive during the arbitration and/or appeals process at all, as it can make it appear less likely that your car is, in fact, a lemon.
The steps above indicate the ideal lemon law process. Unfortunately, more often than not there will be some resistance from the manufacturer who may write off the repairs as routine or trivial. If that is the case, it is often in your best interest to look at hiring a lawyer with lemon law experience early in the process who can push through any resistance by the manufacturer.
Preventing a Lemon Car Purchase
While you often don’t know you have bought a faulty car before it’s too late, there are a few steps you can take to ensure you don’t get a lemon:
- Check vehicle recall reports: What may seem like an isolated problem with your lemon car could become a large scale recall. New cars are often subject to recall repairs automatically. But, make sure if you are buying a used car that it hasn’t missed any recalls in the past. Be sure to also check sites like Center for Auto Safety that have compiled detailed reports on vehicle defects
- Check the vehicle history: Each used car should have a vehicle history report available. This report illustrates any past problems that previous drivers may have had. Sites like CarFax have compiled reports for millions of cars and their history – so you can quickly uncover what, if anything, a dealer isn’t telling you with a car history request
Consumer satisfaction is the driving force behind lemon laws, so be sure to make your voice heard if you feel there is a problem with your car. So, make sure that if life hands you a lemon, you hand it right back.