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The Lemon Law Requirements and Arbitration Process

 Most people consider buying a car, especially the first one, a major milestone. The purchasing process can be confusing and, if mishandled, becomes costly and frustrating. The government sets measures to protect consumers against fraudulent deals and defective products. The Lemon Law protects consumers from defective car purchases.

Under the Magnuson-Moss Warranty Act, the Lemon Law, enacted in 1975, protects consumers if they purchase items, especially vehicles, that do not meet the purported use or quality. Lemon originally referred to defective vehicles, but the term has grown to cover a broad range of products and services depending on the state. The Lemon Law holds manufacturers liable and ensures warranty implementation.

Lemons are vehicles that repeatedly develop issues with minimum to zero respites after repairs. Most states automatically label a vehicle a lemon after four unsuccessful repair attempts or unused for a month during the first 12,000 miles after purchase. The application, definition, and requirements vary by state, but generally, it covers new car purchases. However, some states extend the term to purchases or leases.

To qualify for replacement, the car owner must prove beyond a reasonable doubt they purchased a lemon through detailed records highlighting dated mechanical failures, repairs, mileage at the time of breakdown, type of failure, and repair receipts.

Most states also share the requirement that the car must have a substantial defect covered under warranty to qualify as a lemon. A substantiated defect is a problem covered under an express warranty that impairs a car’s vital functionality, value, or safety. Common examples include faulty brakes or steering wheels, as they affect the crucial functionality of the vehicle, while a cracked radio knob does not qualify. Proving the substantial defect is difficult for issues that may fall between the given examples. Interpretation and qualification of such a part as a substantial defect ranges from state to state.

The next facet of the Lemon Law hinges on what constitutes a reasonable number of repairs for the substantial defect. The dealer or manufacturer is allowed a set number of repairs to address the issue before the car is labeled a lemon. Most states cap the number of repairs at four, but the number of allowed attempts can be as low as one for a substantial defect affecting car safety. Other than the number of attempts, some states consider the number of days the car is in the repair shop in a year, with varying numbers, to be declared a lemon.

The arbitration process for a Lemon Law case is free. An out-of-court process is where an arbitrator - an individual or a panel - decides the case instead of a jury. The selection of a consumer protection agency depends on the state, at best, and the choice of either the manufacturer or complainant.

While the decision is binding on the manufacturer, it remains open to appeal in a regular court for the consumer. If the consumer deems the arbitrator’s decision unfair, one can sue the manufacturer in court.

If the car meets the highlighted requirements, and the consumer wins at the arbitration stage, one qualifies for Lemon Law protection. The remedies include either a refund or a replacement vehicle. One should first notify the manufacturer of the substantial defect again and make the preferred claim. If the compensation seems unsubstantial, one should go to arbitration before suing the manufacturer in regular court.