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A Thumbnail Sketch of the Lemon Law

08/01/2011 03:12 pm ET | Updated Oct 01, 2011

Ever have a car that just couldn't be fixed? It seems we've all owned a bum car at one time or another. The mysterious engine hesitation or surge the dealer couldn't pinpoint; the weird noise everyone can hear but no one can silence. Or, the car which breaks down repeatedly -- to the point where the mechanic shakes in fear when he sees the car being towed back in. These cars are "Lemons" and are the subject of "Lemon Laws" in all fifty states. While everyone is familiar with the concept of the lemon automobile, not everyone is so clear on the law. Most people don't worry all that much about it until they find themselves with one.

I am an attorney and have spent 20 years dealing almost exclusively with lemon laws, representing consumers who have defective automobiles. I'll give you the brief version of what everyone should know about lemon laws. First, all fifty states now have Lemon Laws. While they vary slightly from state to state, they all have common themes. In a nutshell, the typical lemon law says that your new car is a lemon if it has been subjected to a certain number of repairs for the same substantial problem or if it has spent a certain number of days in the shop being repaired within the first year of ownership. Seems simple but you need to note a few things.

First, most lemon laws only apply to new cars. While this can get tricky - some states consider demonstrator cars "new," for example - you cannot assume these laws will protect you on a used car purchase. Your car is New? The next step is to find out if the problem you are having is "substantial"? The laws don't always define what this is so you will have to ask yourself if the defect would impair the car's use or value (and in some states, the safety). Obviously, if the car won't start or catches fire, then it is a substantial problem. Wind noise? The sunroof leaks during monsoons? These may not be so clear.

Assuming you have a substantial problem, then you need the requisite number of repair attempts or days in the shop. And, some states say that the repair attempts must fall within a certain time frame. For example, in Michigan, the first repair must occur within the first year and all four must fall within the first two years. This will vary by state. If your car has been in the shop four or five times, consult a local lawyer and know the answer to those two questions: When did you first bring it in and how many times did you bring it in?

Some vehicles suffer problems that cannot be repaired or diagnosed quickly and spend some of their early lives sitting at dealerships, unrepaired. If your vehicle has been in the shop more than 20 days, consult an attorney. In some states, the threshold is 25 days and in some it's 30. When you hit the magic number, your vehicle is a lemon.

Some states will ask you to notify the manufacturer that you believe your vehicle is a lemon and offer them a "last chance" to repair it. This demand letter is important because up until you send it, the manufacturer may be unaware of the problems you are having with your car. The manufacturer may or may not follow up on the letter but you still need to send it since the law probably requires it.
The reason the manufacturer is notified is that it is not the dealer who is on the hook for the lemon law; it is the manufacturer. If your vehicle is a lemon and you prevail under the lemon law, the manufacturer must do one of two things. They will have to either replace the vehicle for you with one of equal value or refund your money to you, in essence, buying the vehicle back from you for what you paid for it.

You may be required to give up a mileage offset, based upon how many miles you drove the vehicle before the first repair attempt. These were the trouble free miles - in theory - you put on the vehicle so this makes sense on some level.

Here's the really good news: Most lemon laws require the manufacturer to pay your attorney's fees and court costs for you if you prevail in one of these cases. This means that in most states, you can find attorneys who will handle your case and not charge you anything for attorney's fees.

You should also keep in mind that while I refer to "cars" above, the lemon laws in most states also cover pickup trucks and SUVs. They may cover RVs and boats, but that will vary wildly by state. The good news here is a Federal law called the Magnuson-Moss Warranty Act which offers protection to a consumer who has bought any consumer product that came with a warranty. It is not limited to cars or trucks and also offers attorney's fees and costs paid by the manufacturer of the defective product.

And always, consult a local attorney if you think your car or truck (or consumer product) is a lemon.

Steve Lehto is an attorney in Michigan and has taught Consumer Protection as an adjunct professor at the University of Detroit-Mercy School of Law. He is the author of The New Lemon Law Bible: Everything the Smart Consumer Needs to Know About Automobile Law.

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