Auto Dealers: Get Under the Hood of Lemon Laws

Date posted: 08/06/2012

by Kat Saks on
in Buying & Selling

3193 Auto Dealers: Get Under the Hood of Lemon LawsIf life gives you lemons, hit it back with lemon laws.

Auto dealers shouldn’t take lemons lightly. A lemon is a vehicle that isn’t quite up to snuff. When a customer returns a vehicle to the car dealership and claims the car is a lemon, he believes the car to be defective.

Auto dealers and other auto industry professionals, such as manufacturers, must uphold federal and state lemon law when handling the return of potentially defective vehicles.

What Makes a Vehicle a “Lemon”

Criteria for qualifying an automobile as a lemon varies from state to state.

Some states require the car be a new car before it qualifies as a lemon; meaning, the customer must have purchased it new. Some states have lemon laws for a used car, though.

While each state’s lemon law requirements differ, most states require the vehicle in question to be purchased under a warranty in order for the lemon law to apply. Cars purchased “as-is” or with defects do not usually qualify as lemons.

Typically, a car qualifies as a lemon when it fails to meet standards of quality and performance while under the manufacturer’s warranty.

In some states, before a vehicle can qualify, the consumer must provide the auto dealership a reasonable number of attempts to repair any automotive defects that affect the car’s use, value, or safety.

Other states simply require consumers to provide the auto dealership a reasonable opportunity to repair the car under the manufacturer’s warranty.

Some states determine a car to be a lemon by the number of days the car remained out of service for repairs under the time or mileage covered by the warranty.

As you can see, lemon laws vary widely by state. Consult your state’s specific lemon law so you know your state’s definition of a lemon, inside and out.

Handling a Lemon

If a customer’s vehicle does indeed qualify as a lemon, what’s next?

Under the federal lemon law, also known as the Magnuson-Moss Warranty Act, the auto dealer or manufacturer must cover the cost of any mechanical defects with the vehicle. Also, the federal lemon law requires car dealers to pay the customer’s attorney should the customer prevail in a lemon law suit. Many state lemon laws uphold this ruling as well.

Under state lemon laws, an auto dealer might be required to:

  • Partially or fully refund the purchase of a vehicle.
  • Replace the customer’s vehicle with another car of comparable value.

If a customer comes to you with a lemon law suit, consult with a qualified attorney who can help you with everything from lemon law paperwork to settling with the customer. When you rely upon sound legal advice, you will be more likely to comply with federal and state laws with greater ease and confidence.

Auto dealers: Have you ever dealt with a lemon law suit? Tell us about your experience in the comments section below.

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About Kat Saks

Kat Saks is a Denver-based writer and yoga teacher. She is also Firefly Partners' Client Solutions Manager. She blogs for and shouts safe-driving tips to teens while driving the city streets. More articles by Kat Saks

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