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Automobile Lemon Laws in the United States
What can you do if the car you just bought is a real
"lemon"?
Introduction:
What if the car you
purchased is in the repair shop almost as much as in your garage? If you
purchased it in the United States, you probably have some relief available. While
each state has variations on the laws applicable, the article below
describes the usual legal structure of protection available. Consult an
attorney in the State in which you purchased the vehicle for more detailed
information as to the local State’s laws.
The Basic Legal Protection
To protect consumers
from such situations, most states have passed some form of “lemon
laws”, which is slang for cars which are prone to constant repair or
break down even though they are supposedly new. Such laws usually apply to
new cars purchased for personal, family, or household use. These laws
entitle you to a replacement car or a refund if your new car is so
defective that it is beyond satisfactory repair by the dealer.
You must, however,
give the dealer a reasonable opportunity to repair the car. A lemon
normally is a car that continues to have a defect that substantially
restricts its use, safety, or value, even after reasonable efforts to
repair it. This often means four repair attempts on the same problem or a
directly related problem within six months or one year (the time period
varies by state).
Or, it might mean the
car is out of commission for more than thirty nonconsecutive days during
either: (1) The year after the dealer sold it; or (2) the duration of any
express warranty, whichever is shorter.
To get the benefit of
your state's lemon law, you typically must do several things:
First, you must
notify the manufacturer, and, in some states, the dealer about the defect.
Second, you should
keep a copy of every repair or service receipt you are given. This serves
as your record that the required number of repair attempts has been made,
and is especially important if your car's defect had to be repaired at
another garage or in another city because it was physically impossible to
drive the car back to the seller's repair location.
Third, most states
require that you go through an arbitration procedure before you can get a
replacement or refund. Some states sponsor arbitration programs, while
other states require you to use a program run by manufacturers. Arbitration
is usually free, and results often are binding only on the manufacturer or
dealer; if you don't like the result, you can still take the manufacturer
to court.
Some states require
arbitration only if the manufacturer refuses to give you a satisfactory
replacement or a refund. You also may have the option of bypassing
arbitration and going directly to court.
Many consumer
advocates have serious misgivings about lemon laws. They say such laws are
often of little use because the requirements may be extreme (i.e., car out
of commission for 30 days in a year) and the statutes may build in
considerable risk to the consumer, often under the guise of "avoiding
a litigation explosion." In some states, for example, if the
manufacturer makes a settlement offer to the buyer that the buyer rejects,
and then at trial the buyer does not get at least 10% more than the offer,
the buyer must pay the manufacturer's legal fees and costs from the time of
the offer. For many consumers, this would lead to immediate bankruptcy. As
a result, not many suits may be brought under such laws.
If you do
successfully pursue a lemon-law claim, you may get a refund of what you
paid for the car, as well as reimbursement for things like taxes,
registration fees, and finance charges. If you choose, you may get a replacement
car. Be sure that it is of comparable value to the lemon it is replacing,
and that it satisfies you completely.
Used Cars?
Lemon laws cover used
cars in a growing number of states. In some places, the law applies both to
dealer and private seller purchases. The laws may have a connection with
the safety inspection-sticker requirement. These sticker laws usually
protect you if two conditions occur. First, the car must fail inspection
within a certain period from the date of sale. Second, the repair costs
must exceed a stated percentage of the purchase price. Then you are
permitted to cancel the deal within a certain period.
You probably will
have to notify the seller in writing of your intention to cancel, including
your reasons. You must return the car to the place of sale even if it
requires towing. If the seller offers to make repairs, you can decide
whether to accept the seller's offer or get your money back.
Keep in mind that the
car might pass the safety inspection and still be a lemon. And you may
drive the car (if it is drivable), but be aware that, if the car does
indeed turn out to be a lemon, the law usually allows the seller to deduct
a certain amount from your refund based on the miles you have driven. This
applies to both new and used car sales.
Other Laws That Might
Help
Other statutes
protect car buyers besides lemon laws:
the Federal Anti-Tampering Odometer Law
prohibits acts that falsify odometer
mileage readings;
the Federal Used Car Law
requires that dealers post Buyers Guides on used cars;
The Federal
Automobile Information Disclosure Act requires manufacturers and
importers of new cars to affix a sticker, called the "Monroney
label," on the windshield or side window of the car. The Monroney
label lists the base price of the car; the options installed by the
manufacturer, along with their suggested retail price, how much the
manufacturer has charged for transportation, and the car's fuel economy
(miles per gallon). Only the buyer is allowed to remove the Monroney label.
And various state
statutes providing the protection are the consumer fraud as well as
statutes prohibiting unfair and deceptive acts and practices, discussed
elsewhere on this website.
Recall also that the
standard causes of action predicated on
Fraud and Deceit
and Breach of Contract may also be available for relief.
Conclusion
A vital
aspect of all the various forms of relief available above is quick action
with excellent record keeping on the part of the consumer who has suffered
the travail of purchasing a poorly made automobile. The very fact that both
the States and Federal government has passed such substantial laws
protecting the consumer should indicate that this is a problem by no means
rare and the consumer who has been damaged should quickly determine the
precise statutes available in the particular state (in addition to the
Federal protections described above), obtain good legal advice, and
carefully follow the steps necessary to take advantage of the applicable
laws.
These Articles are
to give the reader a general description of certain areas of the law. Legal
advice is necessary to apply these legal concepts to your particular
situation. The Reader should obtain competent legal advice before
relying on the Articles.
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