For many Americans, it is hard to imagine life without a car or truck. Other than a house, it is probably the personal possession upon which people spend the most amount of money. And just like houses, cars require upkeep. But even with proper care and maintenance, vehicles still occasionally break down, which can leave you stranded on the side of the road waiting for a tow truck. And repairs don’t come cheap.
The easiest way to protect yourself against exorbitant repair costs is to purchase a new or used vehicle covered under a manufacturer’s warranty. A bumper-to-bumper, or basic warranty, will generally cover most vehicle defects that arise within 3 years, or 36,000 miles, whichever comes first. Vehicles will often have additional warranties, i.e., a powertrain warranty, which covers components related to the transmission for a period of 5 years/60,000 miles. Some manufacturers have even begun offering powertrain warranties for 10 years/100,000 miles for particular engine components.
For defects which arise during the warranty period, you can return your vehicle to an authorized dealership, and they will perform the necessary repairs at no charge to you. It is extraordinarily comforting to know that if something goes wrong with your car, you don’t have to worry about the cost of repairs. But what happens when the dealership performs warranty repairs, and the repairs fail to fix the problem? Luckily, hard-working state legislators have lobbied for laws that protect consumers in situations like that. Collectively, they are known as “lemon laws.”
What is the Lemon Law?
A “lemon law” refers to a group of state statutes that provide a remedy to consumers against manufacturers of products, including automobiles, which repeatedly fail to meet certain standards of quality and performance. As of 1993, all fifty states have passed lemon laws. Each state has different standards and procedures, but all have similar coverage.
Most people have heard of vehicles described as “lemons,” but probably haven’t thought about what that actually means. Although every state is different, most lemon laws define a lemon as a vehicle that does not conform to its warranty or cannot be repaired within a “reasonable” number of attempts. The term “reasonable” is generally defined as 3-4 times for a particular vehicle system or component.
The precise language varies by state, but generally, the defect in question must substantially impair the use, value or safety of the vehicle for it to be considered a lemon. This is a tricky concept because “substantial impairment” means different things to different people. Safety issues like engine stalls, or underpowered brakes are clear impairments of use, but it gets murkier when discussing minor issues like dashboard vibrations, or persistent bluetooth disconnections. For issues such as this, you should consult a qualified lemon law attorney in your state to find out whether your vehicle qualifies.
Lemon Law Remedies
Regardless of the product in question, all warranties work the same way. If the manufacturer, or its authorized representative, cannot fix a product the consumer purchased, it will refund the consumer’s money or replace the product. Logically, the same principle should apply to vehicle purchases. Oddly enough, however, many people don’t think about vehicle warranties in the same way, and are unaware that lemon laws exist for their protection. Not surprisingly, dealerships and manufacturers rarely inform people of their rights under the laws, and most claims by consumers involving a request for repurchase or replacement without a lawyer’s involvement are usually rejected.
Lemon laws were enacted to combat the manufacturer’s reluctance to repurchase or replace defective vehicles. Under most lemon laws, if the manufacturer is unable to conform a vehicle to its warranty, consumers are entitled to receive back their down payment, their previous loan payments (including interest), vehicle registration fees, related repair, towing, or rental costs, as well as having any outstanding loan balance paid off after turning the vehicle back in to the manufacturer. In the alternative, the consumer can choose a comparable replacement vehicle.
Because cars are usually driven a number of miles before breaking down, the manufacturer is entitled to reduce the consumer’s refund by a certain amount using a calculation based on the miles driven before the first problem occurred.
Each State Law is Different
Each state has its own sets of laws, or statutes, which govern the rights consumers have should they purchase a defective vehicle. An individual state’s law will usually apply only to vehicles purchased in that state. So, if you bought your vehicle in California, you are protected under California’s lemon law, even if you live in Colorado. Additionally, there is a federal lemon law, known as the Magnuson-Moss Act.
Although most state’s lemon laws are similar, there are crucial differences, which drastically impact the law’s effectiveness for consumers. Some states, like California and Ohio, have remarkably consumer friendly lemon law statutes. Unfortunately, many other states, including Colorado, offer consumers very little protection. In next week’s post, we will examine an example from each side of the spectrum: California’s lemon law, also known as the Song-Beverly Act, and Colorado’s lemon law.
PART TWO TO FOLLOW….