Given the cost of a new or even a used car, and the extreme inconvenience of repeatedly bringing a car in for repairs, lemon laws are one of the most important protections available to consumers. If a car has repeated problems that prevent normal operation, the car may eventually be dubbed a "lemon," entitling the purchaser to a replacement car or a full refund. There are specific criteria that determine whether a car is a lemon, and the remedies vary by state.
Federal Lemon Law
The Magnuson-Moss Warranty Act of 1975 is a federal consumer protection law that governs consumer product warranties. Although the law is not limited to vehicle purchases, it does include those purchases in its protections. Unless the car was specifically purchased "as is," an implied warranty applies under the Act.
The Uniform Commercial Code
The Uniform Commercial Code has been adopted in all 50 states and governs sale contracts, among other subjects. Under the provisions of the UCC, car buyers are entitled to reject a car that does not conform to advertised or commonly accepted standards. Buyers must be given a reasonable length of time to determine that a defect exists.
State Lemon Laws
Every state has its own lemon laws. Many of these laws reinforce or expand the rights afforded by the federal law. However, state laws vary widely, so those who are involved in a possible lemon situation are strongly urged to seek qualified legal advice in their state.
What is a Lemon?
The exact definition of a lemon varies from state to state. In general, however, a new car may be defined as a lemon if there is a serious mechanical defect that was not disclosed at the time of purchase. Some states require multiple repair attempts to be made before judging the car a lemon. Other states consider a car with multiple minor defects to be a lemon.
A used car may be considered a lemon if a breach of warranty exists. If there is no warranty, a car may fall under the scope of consumer protection laws if the car had an undisclosed prior history of mechanical problems; was previously totaled or salvaged; had been stolen and rebuilt; was previously used as rental car, taxi or police car; or had been involved in a flood. The problem of reselling flooded cars after Hurricane Katrina was so prevalent that a new term was coined: "Katrina Cars."
What Remedies Do Consumers Have?
If a consumer believes that he or she has purchased a "lemon," what happens next depends on state laws. In most states, the customer is required to give the seller an opportunity to correct the problem. If the defect cannot be resolved, in some states the customer can simply file an official complaint with the relevant consumer protection agency. In other states, the customer will need to retain an attorney. Under the federal Magnuson-Moss Warranty Act, the customer is entitled to recover attorney fees if he or she prevails. Many state laws also provide this remedy. However, some states require the consumer to pay the manufacturer's attorney fees if he or she loses the case.
Remedies are generally limited to replacement of the vehicle or a refund of the money paid. Normally no punitive or other damages are awarded.
Questions & Answers: Lemon Laws