Lemon Law for Cars
How One Man's Lemon Car Took Him for a Ride
Many people use the word "lemon" when referring to defective products, especially houses, cars and major appliances. But few understand exactly how federal and state "lemon laws" can help them out of a jam -- for example, after they buy a new car that breaks down minutes after leaving the dealer's lot.
The Magnuson-Moss Warranty Act is a federal (lemon) law that protects buyers of products worth more than $25, as long as the products come with an express written warranty. (In other words, you need a specific written guarantee, not just your assumption -- however reasonable -- that the product will actually work as advertised.)
Regarding "lemon cars," the Magnuson-Moss law guarantees that if any part of the vehicle (or the entire vehicle) is considered defective, the warrantor must either refund your money or give you a replacement product.
The Uniform Commercial Code (UCC), which applies to all 50 states, also contains "lemon law" provisions, as do laws passed by the individual states. Although there's a great deal of similarity -- and overlap -- between federal and state laws, we recommend that you check with your state's attorney general's office before filing an action against the maker of a "lemon" that refuses to give you a refund or replacement.
Although lemon laws usually convince manufacturers to settle cases outside the legal system, there are plenty of exceptions. This story is about one such case.
In 2005, a Brooklyn resident and auto enthusiast named Bob bought a new car from a dealership in Queens, NY. Over the next six months, Bob learned -- the hard way -- what it means to own a lemon and how frustrating it can be to resolve the situation. We talked with Bob about his ordeal, and asked for his advice on what consumers should do if they get stuck with a lemon.
Audri: What kind of car did you buy?
Bob: It was a "sport" model that was only available with a 5-speed manual transmission. I would have preferred a hatchback design, but I bought the sedan specifically for the 2.3 liter engine and manual transmission.
Audri: How soon did you encounter problems?
Bob: Within a month. The odometer reading was only 700 miles.
Audri: Tell us what happened.
Bob: After visiting my father in Pennsylvania, I left for New York around 3:00. After exiting the Lincoln Tunnel around 6:30, I shifted from first to second, but discovered I couldn't put the car in gear. The stick felt like it wasn't connected to anything.
I called the manufacturer's roadside assistance service, but it took two hours and a few follow-up calls before someone arrived to tow the vehicle to my dealership.
Audri: What kind of service did you get from the dealership?
Bob: In a word, "terrible." And that goes for most of the customer service reps that I called later, with one notable exception.
It took days before a mechanic even examined the car, then a few more days waiting for a part to be delivered, and then the mechanic realized that the part he'd ordered didn't fix the problem.
So, more parts had to be ordered, more time spent installing them, and then the additional parts didn't solve the problem either. After two weeks, I spoke with another customer service person, and was told my problem was being "escalated" to their research department.
While I was waiting for the problem to get fixed, I needed a replacement car (I had a vacation coming up and planned on going out of town). I asked the dealership for a loaner, but was told they no longer did that because of "insurance issues." So I called customer service again, and asked about getting reimbursed for renting a car myself.
Basically, I got the runaround from customer service and the dealership on this issue. Customer service dithered, never called me back, and then when I followed up, they told me to contact the dealership, which in turn told me to call customer service.
For a short vacation, I rented a car myself, and hoped for the best. The total cost was $270.
When I got back, I finally reached someone at customer service who actually seemed to care about what I was going through. But suddenly, my car was "repaired," so I wasn't quite as concerned about the rental car reimbursement.
Audri: You used a sarcastic tone when you said the word "repaired."
Bob: That's because the car was not repaired -- far from it. Not that the mechanics didn't try their best. As it turned out, the problem was due to a manufacturer's design flaw.
Audri: Can you summarize what happened next?
Bob: Less than three weeks after the car was "fixed," it broke down again. This time, I was trying to parallel park in my neighborhood when the car refused to shift out of reverse. Oh, and by this point, there was also a problem with the trunk-locking mechanism. When you hit the unlock lever, it would instantly re-lock the trunk.
But within a few days, the dealership "fixed" both problems, and I was on my way to my next disaster, which occurred as I was driving east on Route 80. As I tried to shift from fourth to fifth, the car wouldn't shift into any gear, and I had to glide onto the shoulder. From there, I called my friends at customer service, but they couldn't help. Fortunately, I have AAA coverage, and I arranged for a tow to the nearest dealership in Pennsylvania.
The tow truck driver recommended a rental agency next to the dealership that offered 24-hour service. I called the owner, who agreed to meet me in 45 minutes at his office. This was a Sunday, so it's people like this who make you appreciate the value of customer service. Of course, once again, I had to foot the bill for the rental, which was about $266.
The mechanics at the Pennsylvania dealership tried to compensate for the engineering flaw in the transmission, but the cable became detached from the stick shift less than a week later -- this time as I was approaching the Williamsburg Bridge to Brooklyn.
And here's where the "hilarity" really ensues. My original dealership refused to let the towing service bring the car there, because they were about to go out of business. Instead, the towing service had to bring it to a dealership in Manhattan.
Just before this latest incident, I was told by the Queens dealership that, yes, they'd agreed to reimburse me for my rental cars, and they'd already mailed a check. Problem was: they'd misspelled my name. The address was correct, except for the zip Code, which they also got wrong.
Then, while my car was being serviced in Manhattan, I learned that somebody else had cashed the reimbursement check issued by the Queens dealership!
The dealership refused to issue a replacement check -- even though I was told by the president of the bank branch (where the check was cashed) that the signature was clearly not mine. But, to put it diplomatically, the folks at the dealership no longer cared.
Audri: How did you finally resolve the situation?
I tried to arrange with the manufacturer to get a replacement for the car or a refund, but once again, I got the runaround. Customer service said I had to work with the new dealer. The new dealer said that, since he didn't sell me the car, I had to deal with Customer service. And, of course, the original dealer had gone out of business.
So when the car was "fixed" again, I drove it to Brooklyn without incident, and carefully parked it. Then, after doing some research, I filed a claim under New York State's lemon law to force the company to either replace my vehicle or give me my money back.
In the end, I succeeded in convincing an arbitrator that the car had no value to me. This is the standard required under New York law, which entitled me to a replacement vehicle or my money back. I chose the latter, minus the interest I'd paid on the car loan (which isn't covered under the law).
Audri: Any advice for new car buyers when it comes to getting rid of a lemon?
First of all, carefully research your state's laws on this subject. And then:
-- Follow the process as outlined by the state law.
-- DOCUMENT EVERYTHING. Write down everything that occurred -- when, where and how much it cost.
Also, take notes whenever you call someone from the dealership or manufacturer. Make sure you know whom you spoke to, and what action was promised.
If you speak to someone at the manufacturer's helpline, the person usually has a unique ID number. Write it down.
-- Demand documentation whenever work is done on your car, especially if the work has been performed by the dealership.
Make them spell out in writing what was done and why.
-- Visit chat rooms for your car to see what sort of experiences others are going through.
This can be a useful source of info on specific problems that other people are experiencing, and how the problems were (or weren't) resolved.
-- Don't expect resolution overnight.
I initiated my claim in August 2005.
The hearing was held in October; I received notice that I had won in November; I finally got my money and returned the car in December.
-- Remember: even after you initiate proceedings under a Lemon Law, you may still have the option to work out an agreement with your local dealer.
If mine had not gone out of business and been willing to provide a replacement vehicle, I would have seriously considered it.
Audri: Thanks, Bob.
Bob: Any time.
Final thoughts: As a consumer, you can pursue a lemon law action in any court of general jurisdiction throughout the U.S. Attorney's fees based on actual time spent will be covered if you prevail in the case. But as Bob suggests, do your homework before filing any action, and if possible, try to resolve your differences with the manufacturer or dealer before taking the case to court. You can find the lemon law for your state here.