The Magnuson-Moss Warranty Act and state lemon laws provide buyers the choice of a replacement car or a full purchase price refund. Manufacturers and sellers are obligated to stand by their written warranties. Lemon laws ensure they do so. They require manufacturers to repair defects, replace a defective vehicle or compensate a consumer for time and money lost.
Lemon law originally referred to defective automobiles, but state and federal laws cover various consumer goods with warranties. Depending on the jurisdiction, these laws protect consumers from defective products, fraudulent sales, and unfair business practices like odometer tampering. Most new car lemon laws require manufacturers to give a replacement vehicle or a refund to buyers if they cannot resolve a major problem with a newly purchased vehicle within a reasonable number of attempts. These laws also prohibit retailers from attempting to waive lemon law rights in the fine print of contracts or other documents.
Consumers should read the manufacturer’s warranty carefully when they buy a new vehicle, report all problems to the dealer, and keep a copy of all repair orders. They should never agree to waive their legal rights in exchange for a price reduction or other deal, as doing so can jeopardize future arbitration hearings and possible court proceedings.
State and federal laws known as lemon law (named after the slang term for defective vehicles) protect consumers who purchase cars, trucks, motorcycles, boats, and other products that have recurring problems. These laws provide a mechanism for consumers to get compensation from the manufacturer, typically a refund or replacement vehicle. For instance, the NJ lemon law (and the federal Magnuson Moss Warranty Act) apply to new and used vehicles and other consumer goods subject to warranties.
A vehicle is a lemon under the law if it has a major problem that significantly impairs its use, value, or safety. A vehicle may also be a lemon if it has several small problems that add up to a major one. However, the law does not cover problems that result from accidents, unauthorized modifications to the car, abuse, or neglect. Depending on the jurisdiction, the lemon law requires manufacturers to make a reasonable number of repair attempts, usually three or more, within a specific period, often set by the statute. Manufacturers must also allow the consumer to test drive a comparable model during these repairs.
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Lemon law protects consumers from the high cost of purchasing a defective product. These laws require sellers to provide a written warranty, offer reasonable repairs, and allow consumers to return the vehicle or goods if they do not meet certain criteria. These laws differ between states and sometimes even at the federal level.
If you have questions about a specific state law or how to apply a national statute, contact an experienced lemon law attorney. You should report the problem to the manufacturer or authorized dealer if you believe you purchased a lemon. This is generally done by sending a letter by certified or registered mail and maintaining a copy of the letter and receipt. Most states have an arbitration program that you can go through. The department will typically assign an arbitrator to hear your case and render a decision within 60 days from when you file your claim.
The decision will usually require the manufacturer to replace your car or grant you a refund, but this is only sometimes the case. You may be able to take your manufacturer to court if they do not agree to these terms. If you go through the arbitration process, the decisions are binding on both parties, so having an attorney with you is important throughout this time.
Some states allow consumers to participate in manufacturer-sponsored arbitration programs, where decisions are binding on both parties. Others allow consumers to file a lemon law lawsuit directly in state courts. A lawyer can help you determine the best option for your situation. Many manufacturers include forced arbitration clauses in the fine print of the sales contract, which prevent consumers from bringing lemon lawsuits in court. These clauses are easy to overlook and can create roadblocks in obtaining justice for a vehicle defect.
To file a lemon law claim, consumers must notify the dealer and the manufacturer in writing that their vehicle is a lemon and they want a refund or replacement. Then, the manufacturer must give consumers one final attempt to fix the car. Arbitration is when a neutral party weighs both sides of a dispute and renders a judgment.
It is common for arbitrators to have financial ties to the automobile industry, which can potentially bias their decision in favor of the manufacturer. For this reason, some consumers prefer to use a neutral state consumer protection agency program or a private arbitration company not affiliated with the auto manufacturer.
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