Lemon Law Overview
Lemon Law Resources
What is Lemon Law?
Lemon law refers to state laws that protect consumers who have purchased a defective motor vehicle, also known as a "lemon." In general, the defect must be serious, such as one that causes a safety hazard, substantially impairs use, or significantly impacts the market value of the car. Typically, if such a defect is not fixed within a reasonable number of attempts, its owner may be entitled to a remedy, such as a refund or a replacement car.
Since lemon laws are not uniform, the specific protections extended to a consumer depends on the law of each state:
- Transaction. Some states only protect new car purchases, while other extend protection to car leases as well as used car purchases.
- Vehicle Type. In addition to cars, some state lemon laws also protect the purchase of boats, SUVs, trucks and RVs.
- Duration. The duration of coverage varies with each state and usually includes a time and mileage component; e.g., 12 months or 12,000 miles. If a defect causes a vehicle to be out of service for a certain period of time, such as 30 days, during the coverage period, the consumer may be entitled to a refund or replacemnt vehicle.
- Consumer Goods. Some states have enacted "quality of products" legislation that applies to a wider range of consumer goods, including computers and mechanical products.
- Reasonable Number of Attempts. Under most lemon laws, four attempts to fix the same defect is a reasonable number of repair attempts.
What Happens If a Dealer Cannot Fix a Defect After a Reasonable Number of Attempts?
A consumer may initiate a lawsuit in court to enforce rights protected by lemon laws. However, sometimes the consumer must submit the dispute to an arbitration process, depending on applicable law. In some states, the state itself will arbitrate the lemon law case. In other states, the Better Business Bureau, National Automobile Dealers Association, or individual manufacturer is responsible for providing the forum and the arbitrator. Federal lemon law encourages, but does not require, alternative methods of dispute resolution.
What If A Car Was Purchased "As Is"?
If a consumer purchases a product "as is," lemon protection is waived because an "as is" agreement binds the consumer to accept the product in its current condition. Unless an exception exists (for example, the purchase agreement is not legally enforceable due to a legal problem with the contract), the otherwise applicable lemon laws do not apply to "as is" transactions.
What Federal Lemon Laws Exist?
In the United States, federal and state statutes regulate defective products or "lemons," although the laws do not always use this term. The relevant federal law is a statute called the Magnuson-Moss Warranty Act ("the Act"). (15 U.S.C. § 2301 et seq). It sets forth rules regarding the application of warranties to tangible consumer products. Additionally, it creates a minimum standard for warranties on covered products and contains rules governing the disclosure of warranties. The Act authorizes the Department of Justice and the Federal Trade Commission to enforce its provisions. Like most states' laws regarding lemons, federal law provides that an aggrieved consumer (a plaintiff) who successfully sues under the Act may recover litigation costs.