Lemon Laws Provide Remedy for Defective Cars

Have you ever bought a new car hoping to be repair worry free for sometime and found that you have frequented the dealer repair shop for the same problem more times than you care to have?  You may have a "lemon" and yes, there is recourse. 

A "lemon" is American slang for a car which turns out to be defective after it is purchased.  In 1970 Nobel prize economist, George Akerloff published a paper: The Market for Lemons: Quality Uncertainty and the Market Mechanism.  It discussed lemon cars in the used car business and asymmetry of information meaning that the seller may have had information that the buyer did not have at the time of purchase, making the quality of the product uncertain.  Five years later, the US Congress enacted the Lemon Law also known as the Magnuson-Moss Waranty Act to protect new car buyers in all states.  Different states may have different additions to the law. State laws provide the new car owner, remedy when the car repeatedly fails to meet average standards of quality.  Although enacted for new car buyers, there are also some provisions for used car purchases in most states.  When faced with a lemon complaint, it may be helpful to consult a lawyer such as Lemon Law attorneys in California or other states.

The premise of  "Lemon Law" is a breach of warranty by the manufacturer.  Some requisites for a car to be considered a lemon (such as in the California Consumer Warranty Law) include:

• The manufacturer or its agents have made four or more attempts to repair the same problem and/or the car has been out of service for 30 or more days, not necessarily consecutive.
• The car problem is covered by the warranty, has caused decrease in use or value and is not due to owner abuse or negligence.
• The four repair attempts occurred within 18 months of purchase or 18,000 miles whichever comes first.
• The owner has directly notified the manufacturer of the problem as required by law or by the warranty.

In California, consult California Lemon Law attorneys for other provisions of the law.  Consult your state lemon law attorneys for provisions in your particular state.

Essentially you have the responsibility to:

• Notify the manufacturer of the defect within the warranty period.  Be sure to read your warranty declarations and be aware of the time or mileage limits.
• You must give the manufacturer or its agents the opportunity to repair the defect.  It is customary to allow the manufacturer four attempts.  Be sure to keep a record of the problem, repairs done and the results and the time period that the car was not able to be in service due to the defect. Keep receipts.
• Be sure to service your car at recommended intervals, keep records of the service and repairs performed regardless of who performs it, and again, keep receipts.
• In states like California, you may be required to submit to arbitration.

Warranty Laws may also apply in certain instances to used cars which still fall under warranty.  It pays to be a responsible and aware consumer.  For more information, contact the Federal Trade Commission at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt192.shtm.

Watch this video on how to file a consumer complaint with the FTC.