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Lemon Law Overview
Consumers hear horror stories about “lemons” — vehicles that continually break down, cost major money, and leave them without a ride, despite purchasing a new or used car. Lemon laws can provide some degree of protection for consumers who find themselves with a lemon.
Lemon law actually refers to both federal and state laws that protect consumers from defective vehicles in one way or another. Some states simply have laws that relate to warranties and contracts, but other states have passed a lemon law that applies to lemon vehicles specifically. In addition, two federal laws cover lemon vehicles: the Magnuson-Moss Warranty Act and the Uniform Commercial Code.
Lemon law applies to most personal vehicles either purchased or leased. Some states may also cover used cars and even motorhomes or RVs. The lemon law that applies to the vehicle is determined by where the vehicle is purchased.
How Do Lemon Laws Vary Between States?
Lemon laws vary from state to state. Some states, like New Jersey, have strong lemon laws that hold car dealers accountable, while others have weak laws that do little to protect consumers, per the New York Times. Other differences include the vehicles covered by the law and what consumers can recover.
The Center for Auto Safety ranked state lemon laws based on how much or how little they protect a consumer who has purchased a lemon. According to the Center, its researchers looked at 10 factors to rank each state’s lemon laws. These factors included the following:
- the number of repair attempts required before the vehicle is eligible for a lemon law claim
- how long the dealer is allowed to have the vehicle for repair
- how the state law treats non-conformities in the vehicle that cause safety problems
- how the law treats general non-conformities
- deductions taken from lemon law awards for vehicle use
- penalties for car dealers that sell a lemon
- the types of vehicles covered by state lemon laws
- state-run arbitration programs
- how attorney fees are handled
According to the state rankings, while New Jersey, Washington, and Rhode Island secured the top spots for lemon laws that best protect consumers; North Dakota, Colorado, and Illinois ranked last. The Center concluded that Illinois lemon laws allow the car dealer to extend the process in the hopes the consumer will give up. In addition, under Illinois lemon law, consumers only have one year or up to 12,000, whichever comes first, to make a lemon law claim.
How Do I Know If I Have a Lemon?
A new vehicle is generally considered a lemon when it “has a substantial problem that isn’t fixed within a reasonable number of attempts, or that has had a certain number of days out of service,” notes Consumer Affairs. In addition, some states extend lemon laws to used vehicles.
Credit Karma says that as many as one percent of all new cars manufactured each year are lemons.
Under most state laws, the owner must also demonstrate the vehicle has a substantial defect covered by the warranty. Additionally, the defect must occur within a certain timeframe or while the car is under a certain number of miles.
“Substantial” defects include those that affect the vehicle’s use, value, or safety. There is a range of defects, from bad breaks to obnoxious smells, that have been considered substantial under state lemon laws. Owners must also be able to show that the defect was not caused by mishandling the vehicle.
Further, the owner must show that they tried to have the defect repaired a certain number of times depending on the state’s lemon law.
Lemon Law Legal Issues
Starting a lawsuit over a lemon is different depending on the state and how to go about pursuing a lemon law claim depends on where the vehicle was purchased.
As noted above, prior to initiating legal action, owners will likely need to report the defect to the dealership where they bought the car or to the manufacturer. Additionally, the owner will need to show that they attempted to repair the vehicle a certain number of times. Usually, a minimum of three attempts to repair the vehicle must be made. The dealer or manufacturer will need this information as well when the owner reports that they sold a lemon.
Credit Karma points out that some car purchase contracts require arbitration before the vehicle owner can file a lemon lawsuit. In addition, some states provide voluntary arbitration programs. These programs can be run by the state or by the car dealer, depending on the state’s laws.
The arbitration process is generally cheaper than a lawsuit. It occurs outside of court and the arbitrator’s decision can be appealed. It can be beneficial for the car owner to consult with an experienced lemon law attorney prior to beginning a lemon law claim. Additionally, under certain state lemon laws, consumers who are successful will be awarded attorney fees.
