Lemon law
Lemon law refers to consumer protection legislation designed to assist individuals who purchase vehicles—commonly cars, trucks, or motorcycles—that have significant defects making them unsafe or unreliable. These laws are applicable to both new and some used or leased vehicles, depending on the state. While all fifty states in the U.S. provide protections for buyers of new cars, only a few extend these protections to used or leased vehicles. For a vehicle to qualify as a "lemon," it must exhibit a substantial defect, be covered by an active warranty, and fail to be repaired after a reasonable number of attempts, which usually ranges from three to four repair attempts for many states.
The Magnuson-Moss Warranty Act of 1975 is a key federal law that supports lemon law claims by setting standards for warranties and consumer rights. If consumers find themselves with a lemon, they can seek a refund or replacement by first notifying the manufacturer and, if necessary, engaging in arbitration or legal action if a resolution cannot be reached. The lemon law process can be complex and often requires documentation of the vehicle's issues to support claims, making it essential for consumers to be informed about their rights and the specific laws in their state.
On this Page
Subject Terms
Lemon law
A lemon law is a consumer protection law that safeguards an individual who purchases a lemon, which is a vehicle—car, truck, or motorcycle—with numerous defects that make it unsafe to drive. These laws apply to both new and used cars. In the United States, each state has its own version of lemon laws. All fifty states protect consumers who purchase new cars that are lemons, but only a handful of states protect people who buy used cars or leased vehicles that have defects. While these laws are in place to protect the consumer, it is generally difficult to prove that a vehicle is a lemon and get the manufacturer to fix or replace the vehicle. Sometimes individuals have to sue the car manufacturer.
Background
In the United States, laws protect consumers from defective products; however, these types of laws did not always exist. The first consumer protection law was the Pure Food and Drug Act of 1906. This law mandated regulations for businesses related to the food and drug industries. After this time, several other laws were enacted to set standards for other industries and protect consumers.
In 1975, the US Congress passed the Magnuson-Moss Warranty Act. This federal law pertained to warranties and protected consumers from so-called lemon vehicles. For a vehicle to be considered a lemon, it must meet certain requirements. Lemons can be new, used, or leased vehicles.
The Magnuson-Moss Warranty Act covers consumer product warranties. It only applies to products that cost consumers more than $15 and does not include services. It requires manufacturers and sellers who offer warranties for their products to provide clearly written and detailed information about exactly what the warranty covers and its terms. Warranties cannot include any misleading or deceptive information.
The Federal Trade Commission (FTC) set rules for the Magnuson-Moss Warranty Act. These three requirements apply to both warrantors and sellers. The first is that warrantors must label a warranty as either full or limited. A full warranty generally covers the full repair or replacement of a defective product within a specified period. A limited warranty usually only covers certain parts, defects, or conditions and typically does not include the cost of repairs. The second is that warrantors must provide the exact language of the warranty in a clear, easy-to-read format. The last pertains to both warrantors and sellers. It states that warrantors must provide a copy of the warranty to consumers so they can read it before they purchase a product.
The Magnuson-Moss Warranty Act bars sellers from modifying implied warranties. An implied warranty is a guarantee that a product will work as claimed. The act also prohibits tie-in sales provisions, which require a consumer to buy additional items or services from a particular company for the warranted product in order for the product to be covered under the terms of the warranty.
The Magnuson-Moss Warranty Act also aids consumers who sue for breach of warranty. In addition to a settlement, it allows them to ask for court costs, other expenses, and attorney fees. However, the act allows warrantors to include a provision in the warranty to require consumers to use informal dispute resolution before filing a lawsuit. The FTC set the terms and requirements of the dispute resolution process.
Overview
For a vehicle to be considered a lemon, it has to have a "substantial defect" that makes it unsafe to operate. The vehicle must be covered by an active warranty that covers these defects within a specified amount of time or number of miles after the purchase. These issues must also be unable to be repaired after a "reasonable number" of attempts. Each state defines what substantial defect and reasonable number mean.
A substantial defect is an issue that a vehicle is having that affects its use, function, and safety and is not caused by the driver. A warranty must cover these defects. An example of a substantial defect includes brake issues since faulty brakes impact the function and safety of a vehicle. However, a loose sun visor would not be considered a substantial defect since it does not affect the significant function or expectation of the car. However, each state has differing opinions on what constitutes a substantial defect or a minor defect.
A reasonable number is harder to define. Many states have their own provisions as to what constitutes a reasonable number. Generally, most states consider three or four attempts to resolve a problem reasonable. For serious safety issues, one attempt may satisfy as reasonable. A state may declare a vehicle a lemon if it has spent a specific number of days per year being repaired.
Lemons can be new, used, or leased vehicles. The Magnuson-Moss Warranty Act and state laws cover new lemon vehicles, but only a few states have laws that apply to used or leased lemon vehicles. If consumers believe that they have purchased a vehicle that meets the criteria for a lemon, they may qualify for a refund or a replacement. First, they should notify the manufacturer of the vehicle's defect. If they cannot negotiate a resolution with the manufacturer, they may be forced to go through an arbitration process, which is free.
During lemon law arbitration, consumers should bring documentation of their claims, such as receipts of service, to prove the vehicle's defect. A panel of people or a single person decides the solution to the disagreement. A manufacturer cannot appeal the decision, but consumers can file a lawsuit against a manufacturer if they are not satisfied with the decision. Unlike arbitration, consumers are responsible for court costs.
Bibliography
Helperin, Joanne. "Used-Car Lemon Laws." Edmunds, 5 Mar. 2013, www.edmunds.com/auto-warranty/my-used-cars-a-lemon-am-i-stuck-with-it.html. Accessed 21 Jan. 2025.
"How to Avoid Buying a Lemon Car." Consumer Reports, 19 July 2021, www.consumerreports.org/used-cars/how-to-avoid-buying-a-lemon-car. Accessed 21 Jan. 2025.
"How the New Car Lemon Law Can Help You." FindLaw, 29 Apr. 2024, consumer.findlaw.com/lemon-law/how-the-new-car-lemon-law-can-help-you.html. Accessed 21 Jan. 2025.
"Lemon Law for New Cars." NOLO, 27 Mar. 2024, www.nolo.com/legal-encyclopedia/lemon-law-used-cars-30107.html. Accessed 21 Jan. 2025.
"Lemons Have Car Buyers Seeing Red." ABC News, 25 Apr. 2021, abcnews.go.com/GMA/story?id=126960&page=1. Accessed 21 Jan. 2025.
Moore, Stephanie. "The Lemon Law—A Guide to State and Federal Consumer Protection Laws." ConsumerAffairs, www.consumeraffairs.com/lemon-law. Accessed 21 Jan. 2025.
"Warranty Laws and the Magnuson-Moss Warranty Act." FindLaw, 21 Mar. 2024, consumer.findlaw.com/consumer-transactions/warranty-laws-and-the-magnuson-moss-warranty-act-.html. Accessed 21 Jan. 2025.
"What to Do if You Buy a Lemon from an Auto Dealer." DMV.org, 6 Aug. 2012, www.dmv.org/articles/what-to-do-if-you-buy-a-lemon-from-an-auto-dealer. Accessed 21 Jan. 2025.