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Lemon Law Overview
Consumers looking to purchase a new vehicle may fear they will get a “lemon,” or a car that suffers from repeated, unfixable issues, leading to major costs, and leaving them without reliable transportation.
Vehicle buyers may not know that certain consumer protection laws, sometimes called lemon laws, can protect consumers from the unexpected costs that can come from purchasing a lemon.
Lemon laws are federal and state laws that protect consumers from defective vehicles. Some states, such as New York, have specific “lemon laws,” while others have laws related to warranties and contracts. There are two federal laws that cover lemons:
How Do I Know If I Have a Lemon?
A new vehicle is 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,” according to Consumer Affairs.
Approximately 1% of all new cars manufactured each year become lemons. Lemon law applies to most personal vehicles either purchased or leased. Some states may also cover used cars and even motorhomes or RVs.
There are two factors that come into play under most state laws when considering whether a car is a lemon.
First, the car has to suffer from a substantial defect covered by the warranty within a certain time or while the car is under a certain number of miles. To be considered substantial, the defect must compromise the vehicle’s use, value, or safety. This applies to a range of defects, from bad breaks to obnoxious smells. Additionally, the defect must not have been caused by mishandling the vehicle.
Second, the consumer must have attempted to have the defect repaired a reasonable number of times. What constitutes a reasonable number of attempts depends on the severity of the defect, particularly if the problem is a safety hazard; however, new cars that need repair within 30 days of purchase may qualify as a lemon.
Lemon Lawsuits
Lemon law can help protect consumers from the purchase of a new car that is defective. Under some states’ lemon laws, the car manufacturer must reimburse or even replace lemons with defects that pose a safety hazard.
How to go about pursuing a lemon lawsuit depends on the state where the car was purchased. According to Credit Karma, some lemon owners must report the defect to the dealership where they bought the car, while others report to the manufacturer.
Documentation of the number of repair attempts will need to be provided to either the dealer or the manufacturer. Further, some car purchase contracts require the car owner and seller to go to arbitration before filing a lemon lawsuit. It is important to have as many of the service records and repair receipts as possible.
Arbitration occurs outside of court and it can be an inexpensive resolution; however, arbitration proceedings can be appealed and it can be beneficial for the car owner to consult with an experienced lemon law attorney.
