Are You Driving a Lemon???
These Lemons Aren’t for Eating: Your Options With a Defective Car
For anyone buying a car, the biggest fear is that they’ll end with a lemon – a car subject to seemingly endless defects and problems that significantly lower its safety, value, and drivability. Anyone who has ever owned a lemon knows they are unsafe, costly, and a big hassle. Fortunately, laws exist that protect consumers who unwillingly purchase a lemon vehicle, whether it’s a new or used car, truck, or motorcycle.
Lemon laws vary from state to state, but in general a vehicle is considered a lemon if after four or more repairs within the warranty period it still has a defect. When that happens, the lemon law kicks in and the consumer qualifies for a refund from the vehicle’s manufacturer.
In many cases, mediation can be handled by the state if the consumer is unable to make headway with the dealership. However, due to government backlog many people prefer to handle the issue through professional mediation services. Regardless of whether a new or used vehicle was purchased, both government and private legal services can assist with resolution.
Snags in the System
The laws related to defective cars, or lemons, are more clear-cut for new cars than they are for used cars. However, for both new and used car owners, there are a few hurdles in place that often leave consumers feeling as if they are without recourse. Three of the primary issues include the following:
● Payments: Even if a car is inoperable, the consumer must continue to make car payments. This ensures that the consumer is honoring his side of the contract, and it protects the buyer’s credit as it prevents the car from being repossessed while the purchase is in dispute.
● One-sided arbitration clause: Part of many dealer contracts, a one-sided arbitration clause prevents many buyers from taking the dealership to court. The validity of these types of clauses differs between states.
● Burden of Proof: This is a bigger issue for used car buyers since if the defective car is a new car it is easier for the consumer to prove that the problem was preexisting. However, regardless of whether the car is new or used, the best chance a consumer has of meeting the burden of proof is to document every issue, call, correspondence, repair, and response. Keep copies of all letters, receipts and invoices, too.
These snags don’t mean that a consumer is stuck with a useless vehicle. If the consumer continues to make payments in good faith, and documents and keeps all related paperwork, then arbitration is more likely to go their way.
About 1% of all new cars end up being lemons, which amounts to about 150,000 cars. Each state has different procedures for how to move forward, but every state requires that the consumer attempt to negotiate a settlement with the vehicle manufacturer first. If a settlement can’t be reached, the consumer is generally then required to go to arbitration.
If given the opportunity to choose an arbitrator, it’s in the buyer’s best interests to choose a consumer protection agency program instead of an arbitration program through the manufacturer. However, sometimes the manufacturer does not give the consumer an option.
Someone who enters arbitration with significant documentation will fare better than someone who doesn’t. Documentation that can best assist a consumer during arbitration includes:
● Vehicle service records
● Proof of contact with the dealer, including personal logs
● Vehicle-specific ads and literature printed by the manufacturer
If you purchase a lemon, it’s important that you understand your rights. Every state has lemon laws designed to protect the consumer but, as mentioned, each set of laws is different. By informing yourself of the laws in your state and keeping good records, you will be successful in your efforts to hold the vehicle manufacturer accountable.