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YOUR RIGHTS UNDER After marriage, the birth of a child, and the purchase of a home, the next biggest financial obligation for most people is the purchase of a new passenger vehicle. Considering the price of new cars and trucks today, we have come to expect perfection from our new motor vehicles. Realistically we know that perfection in the automobile manufacturing industry is an unattainable standard. However, we do demand that "our" car or truck be perfect. Since manufacturers sometimes make Lemons, the 50 states have passed Lemon Laws. Lemon Laws apply to any consumer who buys, leases or registers a new passenger vehicle. A Lemon is any new motor vehicle under a certain gross weight (generally under 10,000 pounds) that has a defect or condition, which substantially impairs the use, market value, or safety of the vehicle to the consumer and cannot be repaired after reasonable attempts. A consumer is 1) any individual (except someone who purchases for resale) who purchases a motor vehicle to be used primarily for personal, family, household, or business purposes, 2) any person to whom that vehicle is transferred for the same purposes during the period that the vehicle's express warranty is in effect, and 3) any other person, who under the terms of the warranty, is entitled to enforce the obligations of the warranty. All 50 states have Lemon Laws that establish procedures designed to resolve consumer's complaints with passenger vehicles that have chronic mechanical and safety problems. (Click here for more information about the lemon laws in your state). These Lemon Laws allow the consumer to obtain a purchase price refund or replacement vehicle when his or her original vehicle has a substantial problem that has not been repaired within a reasonable number of attempts, or has been out of service for a specified number of days. The state Lemon Laws are not uniform. However, there are certain basic characteristics that are common to all the various state Lemon Law statutes. In general, Lemon Law Statutes Define what constitutes a Lemon and require that the manufacturer (not the dealer) correct the defect in the vehicle. Generally, the statutes define a "Lemon" as a motor vehicle that continues to have a defect that substantially impairs the use, market value, or safety of the vehicle after a reasonable number of attempts to repair the vehicle or after the vehicle has been out of service for a specified number of days. Establish a warranty rights period generally 12 to 24 months or 12,000 to 24,000 miles (generally, whichever occurs last). The defect and the initial repair attempt must occur sometime during this period. Define when a manufacturer has had a sufficient opportunity (number of repair attempts) to correct the problem with the vehicle, thus triggering the consumer's right to a refund or a replacement vehicle. A motor vehicle may be classified a Lemon under the following conditions: For serious safety defects, such as brake failure or locked steering, after one attempt by the manufacturer or its dealer to repair the safety problem. For other defects, after the manufacturer or its dealer has been granted three or four opportunities to correct a problem that substantially impairs the use, market value, or safety of the vehicle to the consumer. After the manufacturer or its dealer has made five or more attempts to repair several different problems, that together constitute a substantial impairment to the use, market value, or safety of the vehicle to the consumer. If a vehicle has been "out-of-service" for a total of 30 days in a one-year period. If your vehicle's repair history meets one of these four Lemon tests, you may have a Lemon, in which case, you are granted the right to require the repurchase or replacement of your vehicle. Most Lemon Laws give the manufacturer an "offset" or "credit" for the consumer's use of the vehicle. Think of the offset as rental charges for the actual use of the vehicle. The intent is for the manufacturer to get a reasonable credit for the vehicle's use. The manufacturer's credit is used to reduce the amount of the reimbursement of the consumer's purchase price. The reduction is generally a factor of the miles the vehicle has been driven. Some states (approximately 50%) allow consumers to recover their attorney's fees. There is a difference between the states that do not provide for attorney's fees and those states that do allow for recover of attorney's fees. In the states that provide for attorney's fees 1) More consumers are likely to be represented in their warranty disputes with their vehicle manufacturer, and 2) Those consumers are much more likely to be successful in their claim against the manufacturer. HOW THE LEMON LAW PROCESS WORKS Repairing Your Vehicle It is very important that you 1) Immediately notify the manufacturer or its dealer of any defect that substantially impairs the use, market value, or safety of your vehicle (a nonconforming condition under the Warranty), 2) Keep a copy of all repair receipts for your records, and 3) Keep a "memo-style" record of each and every contact you have with the manufacturer and its dealer. You have the right to receive a detailed statement each time you bring your vehicle in to an approved dealer for repair. The repair statement should indicate the date you brought your vehicle in for repair and the odometer reading at the time you brought your vehicle in for repair, contain a general description of each problem with your vehicle, provide a detailed list of all work performed on your vehicle, list all charges for parts and labor, and indicate the date you picked up the vehicle and the odometer reading when you picked up your vehicle at the service center. Also, be sure that you receive your detailed repair statements (it's the law in most states) and that you keep this information for your records. Contacts with Manufacturer and its Dealer It is important to keep a record or log of every communication you have with the manufacturer or its dealer. Create a memo-style log in which you record the name of the speaker, the date and time of the statement, and as nearly as possible the exact words of the representative especially if the speaker makes a statement similar to: "We can't find the problem", or "We can't guarantee that it's fixed", or "I wouldn't accept a vehicle with that problem". Such "admissions" can be used against the manufacturer at an arbitration hearing or in court. 2. Every letter you send to the manufacturer or its dealer should be sent by Certified Mail with Return Receipt Requested so that you can prove that the manufacturer or its dealer received your letter and you can verify the date your letter was delivered to the manufacturer or its dealer. Who Pays for the Cost of Repairs? Generally the manufacturerr's warranty on a new vehicle covers the cost of repairs for at least one year following your vehiclee's original delivery date or the first 12,000 miles, whichever comes first. Check your Warranty Book or Owner's Manual for the details of the coverage on your vehicle. Repair costs to correct defects that occurred while your vehicle was under warranty are generally covered by your warranty. Nevertheless, you may be required to pay for the cost of repairs, for example, if repairs are needed after your warranty has ended. If for any reason a defect is not covered under your warranty and your vehicle is later determined to be a "Lemon" under your statee's Lemon Law you may be entitled to be reimbursed for those expenses. For this reason, it is important to keep a copy of your receipts. If you are leasing your vehicle, check your lease agreement to determine who is responsible for the cost of repairs on your vehicle after the warranty period. How Long Should It Take the Manufacturer to Repair My Car? The Lemon Law allows the manufacturer a "reasonable number of attempts" to repair or correct the defect. In some states a "reasonable number" means three repair attempts and in other states it means four attempts for the same defect or a total of 30 cumulative days out of service because of a series of defects or repairs. Also, a "reasonable number of attempts" to repair may consist of five (5) or more attempts, on separate occasions, to repair varying nonconformities that together substantially impairs the use, market value, or safety of your vehicle. Final Repair Attempt Before a claim can be filed under the Lemon Law, you must give the manufacturer one final opportunity to repair the defect. A manufacturer must be given a final opportunity to cure the nonconforming condition (the defect that substantially impairs the use, market value, or safety of your vehicle). The Lemon Law requires that you send a letter to the manufacturer (not to the dealer) i) by Certified Mail, ii) with Return Receipt Requested stating 1) that you may have a claim under the Lemon Law, and 2) that you are giving the manufacturer one final opportunity to repair the defect in your vehicle. (Click here for a Sample Letter) What information should be included in your written notice? Be sure to include your name, address, phone number, and email address. Also, it is important to provide an accurate description of the nonconforming condition (the defect that substantially impairs the use, market value, or safety of your vehicle); the year, make, model of your vehicle, and the vehicle identification number (VIN) of your vehicle. (Click here for a Sample Letter) If your state grants three opportunities to make the necessary repairs, your letter should be mailed after the "second" unsuccessful repair attempt. If your state grants four opportunities to make the necessary repairs, your letter should be mailed after the "third" unsuccessful repair attempt. Consult your Warranty Book or Owner's Manual for your vehicle manufacturer's address information. Keep a copy of the letter for your records. Also, keep the Certified Mail Return Receipt as proof that the manufacturer received your letter. (Click here for a Sample Letter) Within a specified period of time (generally, seven to fourteen days) after receiving your written notice, the manufacturer must notify you of a reasonably accessible repair facility (service center). After receiving your letter, the manufacturer has specified period of time (generally, seven to fourteen days) within which to schedule the final repair attempt. Within a specified period of time (generally, seven to fourteen days), the manufacturer must conform the vehicle to the express warranty. If the manufacturer does not schedule the final repair attempt timely, or if the defect is not repaired within a specified time (generally, seven to fourteen days) after the scheduled repair attempt, you have a right to demand a replacement vehicle or a refund. A manufacturer who is unable to conform a vehicle to the express warranty must, at the option of the consumer, replace the motor vehicle with a comparable new motor vehicle or accept return of the vehicle and refund the consumer the full contract price, including all collateral charges, finance charges and the reasonable cost of alternative transportation during the period the consumer is without transportation, less a reasonable allowance for use. (Click here for a Sample Letter) It is "important" for you to keep a copy of your letter and the Return Receipt Verification before you can file a claim under the Lemon Law. Enforcing Your Rights If your vehicle'ss manufacturer denies your written Lemon Law claim and will not refund the purchase price or replace your vehicle, you must request a hearing through the manufacturer's Informal Dispute Settlement Program (Click here for a list of manufacturer Informal Dispute Settlement Programs). The manufacturer must provide you with notice that it has an available program and that the program is approved by your state. Under the Lemon Law statutes you must first exhaust the remedies provided under the manufacturer's Informal Dispute Settlement Program before you can file a Lemon Law claim in court. However, a court action brought under the Lemon Law statute must commence within a specified time (in many states, three years) following the date of original delivery of the motor vehicle to the consumer. Most manufacturers have developed an informal dispute resolution process, which is triggered by the written notice from you, the consumer. Under the rules and regulations, the manufacturer has 40 days respond to the written complaint and render a decision. The manufacturer's representative may meet with you by telephone or in person, if you and the representative agree to do so before the Informal Dispute Settlement Program issues its decision. The manufacturer may delay a decision if you have not provided all the necessary information in your written notice. If you and the manufacturer settle the dispute or reach an agreement that provides for a specified reasonable time for performing the agreement, your claim has been successfully resolved. You will not have to pay any fee to use the Informal Dispute Settlement Program. Usually, you submit your complaint in writing to the program and keep a copy for your records. Generally, your case must be decided within 40 days after the time your complaint is received. You may accept or reject the program's decision. If you accept, the manufacturer must also accept and has 30 days to comply. There is no appeal process for the manufacturer. If you do not agree with the program's decision, you can reject it and go to court to pursue your right for a refund or replacement vehicle, or any other claim you may have against the manufacturer. However, the judge may consider the program's decision in deciding your case. It is an affirmative defense to any claim brought under the Lemon Law that the nonconformity you allege does not substantially impair the use, market value, or safety of your vehicle. It is also an affirmative defense that the nonconformity is the result of abuse or neglect; or that the nonconformity is a modification or alteration of your vehicle that is not authorized by the manufacturer. If there is no agreement or settlement, or if the manufacturer has no Informal Dispute Settlement Program, you may sue the manufacturer of the vehicle in a state court for a refund or a replacement vehicle. If you want legal representation, you must hire a private attorney to represent you in your lawsuit. If you prove in court that your vehicle is a "Lemon", a judge may order the manufacturer to refund the full purchase price including sales tax, license and registration fees, less a reasonable allowance for your use of the vehicle. If you win, you may also be awarded reasonable attorney's fees by the court. You are required to use the Informal Dispute Settlement Program only if you want to use the Lemon Law's standard of "reasonable attempts to repair". You may have another cause of action or other rights which are independent of the Lemon Law. Thus, it is a good idea to consult an attorney regarding your options. If you win in the Manufacturer's Informal Dispute Settlement Program or if your win in court, you can recover the following: The vehicle'ss purchase price or leasing costs, including sales tax Manufacturer or dealer installed accessories Finance charges (if any) Reasonable attorney's fees Reasonable costs of a rental vehicle while your vehicle is out of service because of the defect If You Have a "Lemon", You Can Contact the Manufacturer as follows: The following manufacturers have agreed to be bound by an Informal Dispute Settlement Program (arbitration). If your vehicle manufacturer is not listed, there may not be Informal Dispute Settlement Program for that manufacturer at the time this article was written. Remember, you must follow the settlement procedure before you can take a manufacturer to court. You can contact a specific manufacturer's Informal Dispute Settlement Program as follows: (Click here for your vehicle's Informal Dispute Settlement Program) Refund Or Replacement Replacement: If your car or truck meets one of the Lemon tests, the manufacturer may offer to replace your original vehicle with a new vehicle. However, you do not have to accept the offer of a replacement vehicle. You are entitled to demand a refund. What to do if you elect to accept a replacement vehicle: If the manufacturer, its subsidiary or agent, financed the original vehicle, the manufacturer must insure that you do not enter into a new or different financing agreement that creates additional financial obligations which exceed the terms of your original financing agreement. However, you are responsible for having the title and registration transferred to your new vehicle. Refund: If you choose to receive a refund of your vehicle's purchase price, you are entitled to receive the full purchase price of your original motor vehicle, minus a "reasonable allowance for vehicle use". A full refund includes: Any allowance for your trade-in vehicle, The cost of any options and other modifications included by the manufacturer or its authorized dealer, All sales tax, license and registration fees, and finance charges, All charges for renting a replacement vehicle while your vehicle was out of service for repair of the defect, Fees charged by your "expert", and The charges for any extended warranty coverage provided by the manufacturer, its subsidiary or agent. A "full" refund is not limited to these fees and charges. You may have additional expenses for which you are entitled to a refund. What is a Reasonable Allowance? To calculate the "reasonable" allowance for vehicle use under most Lemon Laws: 1) Multiply your vehicle's purchase price times the mileage on your vehicle at the time you "first" brought it to the manufacturer or dealer for repair of the defect, and 2) Divide your answer by 120,000 miles (a commonly used vehicle life expectancy factor). For example, the reasonable allowance for a $12,000 vehicle with 10,000 miles would be calculated as: First, $12,000 X 10,000 = 120,000,000, then รท 120,000 = $1,000 In this example, the reasonable manufacturer credit for vehicle use is $1,000. It is important to note that you may also be charged for any physical damage to the vehicle. Damage that is not normal wear and tear, such as nicks and scratches in the paint, body dents, torn seats, etc. If your vehicle is leased, you can receive a full refund for all leasing fees minus a reasonable allowance for vehicle use. Under the Lemon Law, your lease agreement ends when you return the vehicle. You cannot be charged any penalties for ending the lease early. A Review of the Lemon Law: Do You Have a Lemon? You may have a lemon if: The manufacturer or its dealer has made two (or three) or more attempts at repairing a defect that substantially impairs the use, market value, or safety of your vehicle; The manufacturer or its dealer has made one unsuccessful attempt at repairing a defect that is likely to cause death or serious injury; The manufacturer or its dealer has made five or more attempts at repairing different problems that, together, substantially impair the use or market value of your vehicle; or Your car has been out of service for a total of thirty days. If You Think You May File a Lemon Law Claim: Keep all repair records. Be sure to follow the provisions of your state's lemon Law, check to see if your state has a Consumer'ss Guide to the Lemon Law or contact your state's Consumer Protection Division. If you have a potential Lemon Law claim, you must give the manufacturer written notice of the defect and allow the manufacturer one final opportunity to repair the defect before requesting arbitration of your claim for a refund or replacement. (Click here for a Sample Letter) If your vehicle is defective: Give your dealer an opportunity to repair your vehicle Keep all repair receipts and a complete record of all contacts with the manufacturer or its dealer. If substantial defects continue after two or three (see your state's Lemon Law) repair attempts, give the Manufacturer written notice of its last chance to repair the defect. If the substantial defect is not scheduled for repairs within the specified time after the manufacturer receives your written notice, or if repairs are not completed within the specified time after delivery for the final repair attempt, demand a refund or a new vehicle. If the Manufacturer does not agree that you are entitled to a refund under the Lemon Law, file for dispute resolution through the manufacturer's Informal Dispute Settlement Program. If you are still dissatisfied, contact an attorney regarding civil action in court. You may also have other rights under other state and federal laws, such as the following: the Federal Magnuson-Moss Warranty Act; the Uniform Commercial Code (UCC); your Service Contract or Extended Warranty; Secret Warranties; Implied Warranties; Express Warranties; Unfair and Deceptive Acts and Practices (UDAP); and Strict Liability and Negligence. Consult an attorney, your state's Consumer Affairs Department, or the Center for Auto Safety (CAS) to determine which remedy is best for you. Center for Auto Safety (CAS) 2001 S Street NW Washington DC 20009-1160 202.328.7700 The Center for Auto Safety is a non-profit consumer group specializing in auto issues. CAS can help you find out about safety recalls, Lemon Laws, secret warranties, and other general information. National Highway Traffic Safety Administration (NHTSA) 400 Seventh Street SW Washington DC 20590 800.424.9393 Auto Safety Hotline NHTSA can give you information on the safety recall history of your vehicle. David Danda is an attorney, comedian and national marketing coach and columnist who helps businesses market more effectively by leveraging technology. He can be reached at 770.938.0977, or through his website at www.daviddanda.com. You may reproduce and distribute this copyrighted© material provided the author is appropriately identified. Author PERSONAL INJURY FAQ | CONTACT US | RESOURCES | ARTICLES Any information you may obtain from this site is not, nor is it intended to be legal advice. You should consult an attorney for individual, specific advice regarding your own situation. You may reproduce any of the materials available on this site for your own personal use and for non-commercial distribution. All copies must include the following copyright notice. COPYRIGHT 2005 © David E. Danda, P.C. • Atlanta, GA 31141 |
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