Lemon Law

You know you've got a problem when you spend as much time in you car dealer's loaner as you do in the new convertible you just dropped big bucks on. Get a half-dozen people in one room and talk cars, and it's almost a certainty that one of them―or more―will have an automotive horror story.

And while the dictionary defines a "lemon" as an automobile that is unsatisfactory or defective, for consumers the operative word is "headache."

But there are alternatives to bonding with that loaner or spending your evenings calling all your friends to bum a ride to work.

Michigan's 20-year-old Lemon Law offers consumers protection from being stuck with a defective vehicle, whether they've purchased it or leased it.

What's "defective"? In Michigan, the law defines a problem vehicle as one that has been out of service for more than 30 days for repair, or one that has been in the shop for the same repair unsuccessfully four or more times.

You also need to report the defect within the first year of your ownership, even if you're the second or third or fourth owner―as long as the vehicle is under warranty. And it doesn't necessarily have to be a mechanical defect. Under the Michigan law, you have recourse for a persistent water leak, noxious odor, or paint problem.

You'll have a good chance to successfully use the Lemon Law if you make sure you've documented the issues you have.

Then report the problem in writing to the manufacturer―not the dealer. While you might first be asked to submit to arbitration, it's not binding on you, only the manufacturer. If you prevail, you could be entitled to a replacement vehicle or a refund of your lease payments or purchase price.

If you get a refund, it should include the actual price on the buyer's order, any cash payment, any trade-in allowance, the sales tax, license and registration fees, and other government charges. Discounts, rebates, incentives, and debts from other transactions aren't included.

Since it was first passed, the Lemon Law has proved a boon to consumers, and has also provided a wealth of business for attorneys. And frankly, lawyers often are your best bet.

While the Secretary of State and the Michigan Attorney General have set up some of the framework, they really can't do much to help. An experienced Lemon Law attorney can help you explore the possibility of using other remedies, like the Michigan Consumer Protection Act, the Michigan Uniform Commercial Code, the Federal Magnuson-Moss Warranty Act, and other contract remedies. If you do sue, the courts are authorized to award reasonable attorney fees to a car buyer who wins in court.

Do Your Homework

It's all about the documentation, so make sure your records are accurate and complete, and that you can prepare a solid paper trail tracing the problems you've had. A good place to start is to make sure you have a copy of the purchase agreement, all repair orders, and the vehicle's warranty.

Make sure you keep notes about the discussions you've had with your dealer about your vehicle. Also keep records of any written correspondence you've had with your dealer or the manufacturer.

Not sure if there have been recalls or service bulletins put out on your vehicle? Ask the dealership, and take note of what you're told.