What is a lemon law?
Learn about consumer-protection resources for car buyers.
Several years before enactment of the Federal Magnuson-Moss Warranty Act of 1975, I complimented a neighbor on her handsome new car. But she thought it was a lemon. She listed a number of problems that had emerged in her first year of ownership: faulty brakes, transmission problems and a wealth of minor electrical issues that never seemed to get fixed right. The car had spent more time in the repair shop than her driveway, and she wondered if she needed to go to take the dealer to court. What she definitely needed is today labeled a lemon law.
Uniform Commercial Code
The first major step in nationwide consumer-protection was creation of the Uniform Commercial Code in 1952. The code was created by the National Conference of Commissioners on Uniform State Laws, was adopted by all 50 states except Louisiana and recognized that state laws protecting a consumer might conflict with laws protecting a manufacturer in another state, making redress of consumer problems nearly impossible. The Code required clearly stated terms of sale for all consumer goods valued at $25 or more, asserted the consumer's good faith in purchasing goods and provided for court definition of a reasonable time for consumer complaints and manufacturer's response.
Because a car is often a consumer's largest purchase, the UCC is often invoked if the provisions of a state lemon law do not address a consumer's problem. The UCC also provides that, should a consumer seek legal recourse for a problem and win, legal costs must be paid by the manufacturer, thus pressing manufacturers to seek solutions.
The Magnuson-Moss Warranty Act
The Magnuson-Moss Warranty Act of 1975 focused even more specifically on terms of sale, requiring clear and understandable disclosure of warranties on consumer products. The Act provided a list of elements warranties should contain, including terms of repair, refund, or replacement, procedures to be followed by consumers to meet express warranty terms, and consumer protections implied by warranty. An interesting provision of the Act is that, while the cost of parts needed to repair an item are subject to financial coverage by manufacturers, the costs of repair service are not covered. The Magnuson-Moss Warranty Act formed the basis for lemon laws enacted individually by all 50 states.
State Lemon Laws
State lemon laws are customarily administered by a state's Office of the Attorney General and often the state Department of Consumer Affairs. In Texas, lemon laws are the provenance of the Department of Transportation. While federal laws assert consumer rights, seeking redress begins at the state level; and not all laws are the same.
For example, lemon laws in North Carolina cover motorcycles as well as cars; in South Carolina motorcycles are not covered. Texas lemon law covers used cars with manufacturer's warranties but specifies that coverage is for repairs only. In New Mexico, used cars with or without manufacturer's warranty receive full lemon-law coverage; in neighboring Arizona, warranty must be in force. A critical question, therefore, to be explored by an aggrieved consumer is: What is the lemon law in my state?
Using a state lemon law can be frustrating for consumers in another way. Often, car problems do not emerge immediately, and it is hard to foresee the growth of a seemingly one-time problem into a lemon-flavored sequence of related disasters. Manufacturers therefore advise that purchasers read and follow all the terms of their warranties. Most important, car buyers should make it a practice to journal all car repairs and service, saving receipts that can prove the consumer has adhered to warranty terms.
A lemon law suit may founder on such descriptions as 'a gas station I've only been to once' or 'a few weeks before the twins birthday, I think.' Even if a car runs perfectly for many years, responsible record-keeping is an important, and sometimes critical, element of consumer confidence. Whatever the color of your car, lemon laws exist to protect you and your family's safety on the road.