Lemon Law

Buying a car is typically a stressful, yet exciting experience for most people. That sense of excitement can quickly turn to frustration when the vehicle purchased begins having mechanical trouble. Frustration can devolve into anger when the dealer repeatedly makes ineffective repairs, sometimes delaying action or denying responsibility all together.

Each state and the federal government have enacted “lemon laws” to provide redress where a purchaser is saddled with a vehicle that doesn’t meet quality and performance standards. Unfortunately, not all situations are covered by a lemon law; moreover, every state’s, as well as the federal, version of the law is different.

Generally, lemon laws protect purchasers of new motor vehicles from defects or conditions that substantially impair the value of the vehicle and where the manufacturer has failed to resolve the problem after been given a reasonable opportunity to perform repairs. However, various jurisdictions define “new motor vehicles,” “substantial impairment,” and “reasonable opportunity to repair” in a number of ways. There are also a number of variations in the scope and breadth of relief available.

Under the federal lemon law, which is formally titled the Magnuson-Moss Warranty Act, a successful claim entitles the purchaser to restitution in the amount of the difference between the purchase price and the actual value of the vehicle given the defect in question. The federal law is quite broad in terms of what vehicles are covered. Since the act is broadly meant to enforce warranties (not exclusive to motor vehicles), coverage extends to any vehicle under most types of warranty (e.g., a manufacturers’ express warranty or a dealers’ express warranty, implied warranty, or service contract); however, the owner must bring a claim within the first two years he or she owns the vehicle. Finally, the purchaser must have been unable to use the car for a total of 30 days (not necessarily consecutive) while the manufacturer is given a reasonable opportunity to repair—courts generally find three or four attempts to be a “reasonable opportunity.”

The federal law is fairly unique in one regard—it affords protection to purchasers of used vehicles, so long as a warranty, limited or otherwise, covers the defect in question. Nearly every state lemon law limits relief to defects covered by the manufacturers’ warranties, which typically expire two years after the vehicle is purchased new. To date, there are only six states with car lemon laws covering used vehicles: Connecticut, Massachusetts, Minnesota, New Jersey, New Mexico and New York.

Although narrower in scope, state laws can provide for more complete relief. A significant number of states award restitution in the amount of the full purchase price of the vehicle, unlike federal law, which only provides for diminution of value restitution. For instance, under Michigan law, a successful claim requires the manufacturer replace the vehicle or repurchase it at the full sale’s price. However, the law only applies to vehicles still covered by a manufacturer’s express warranty. This definitional exclusion forecloses claims for vehicles sold under a dealers limited warranty.

California law adds additional complexity to the calculation of restitution. Advancing the interests of the purchaser, California’s lemon law permits a purchaser to recoup incidental damages as part of a claim. Incidental damages include expenses reasonably incurred because of a defect or condition covered by warranty. Qualified expenses include towing costs, rental car expense, and even attorney fees. On the other hand, a manufacturer may petition to reduce total restitution to account for the purchaser’s use of the vehicle. A statutory formula divides the number of miles on the vehicle by 120,000, then multiplies that figure by the vehicle’s purchase price to determine the reduction. In essence, the law contemplates that a vehicle has 120,000 miles of use—the amount of restitution is calculated as a function of what percentage of those miles remain on the vehicle.

The diversity and complexity of different jurisdiction’s lemon laws can lead to highly variable outcomes. Experienced legal counsel can help you navigate the various state and federal statutes. If owning a lemon is causing you unnecessary frustration, contact one of the experienced lemon law attorneys at Neumann Law Group for an evaluation of your lemon law matter.