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.
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.
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.