Understanding the lemon law

The lemon law is a consumer protection law designed to provide respite for consumers who buy a car with a defect that can’t be repaired. Buyers who suspect they bought a defective car can potentially utilize the protections provided by the lemon law to get the seller to repair or refund their purchase.

You may be wondering what lemons have to do with cars. Defective cars are sometimes called lemons because they're "goods gone sour." The term lemon can and has been applied to other goods that didn’t deliver on their promise, but these days it’s most famously applied to cars.

What is the lemon law?

Lemon laws exist at both the state and federal levels to hold carmakers accountable and protect consumers. Lemon laws at the state level typically only apply to cars sold under warranty, but the federal lemon law (known as the Magnusson-Moss Warranty Act) also applies to other goods sold under warranty as well.

In essence, the lemon law requires cars under warranty that are found to be defective or unsafe to be fully repaired by the manufacturer. If the car is deemed irreparable after a “reasonable” number of repair attempts, it must be refunded or replaced.

It’s helpful to remember that the definition of what constitutes a “reasonable” number of attempts varies greatly from one state to another. The level of restitution that manufacturers are legally mandated to provide may also vary. Some states may mandate a full refund while others may allow deductions for mileage and depreciation. Additionally, the number of repair attempts required is subject to the severity of the defect. Something urgent like faulty brakes, for instance, is likely to require fewer attempts before a refund.

Some states may also have limits on vehicle class or usage, such as limiting coverage only to personal vehicles. It’s always best practice to consult with local authorities and find out what’s covered under your state’s laws.

What's covered under the lemon law?

Although the exact scope of what’s covered by lemon laws can vary, they typically cover defects that would significantly impact the functionality, safety or value of the car. The defect in question must also fall under the car’s original warranty coverage, such as the brakes or powertrain. Something minor like a defective radio dial probably wouldn’t apply.

Does the lemon law apply to used cars?

In most states, lemon laws only apply to new cars sold under warranty. There are a few states, however, that have limited regulations in place for used car sales, as does the federal Magnusson-Moss Act. Private sales are not covered by most lemon laws. To find out more about lemon laws in your state, consult your local consumer protection office or Better Business Bureau.

What to do if you’ve bought a lemon

If you suspect you’ve bought a lemon, you may need to file an official claim, typically with your local consumer protection or state attorney’s office. Here are a few tips that could help your claim get processed more efficiently:

• Know the law: It helps to read through your car’s warranty and your state’s lemon laws carefully. This helps you understand exactly what’s covered and what might void your claim. For instance, using an unauthorized third-party repair shop may be grounds to dismiss your claim.
• Keep excellent records: A solid paper trail can often be your best friend. Do your best to keep detailed written records of all repairs and servicing. Get the technician to note down any concerns you may have, even if they aren’t working on that at the time. Finally, keep records of any communication regarding servicing from the dealer or manufacturer. These records will help strengthen your claim.
• Research your car: Sometimes, doing a little digging into the make and model of your vehicle could potentially reveal that it’s a widespread issue. Though this isn’t common, it could help substantiate your claim even further.
• Get expert opinions: Since there is so much variance in lemon laws by state, it may be helpful to consult with a reputable attorney who specializes in these matters. Some attorneys will offer free consultations or work on a contingency basis, which could be helpful if you can’t afford their legal fees upfront.

When filing a claim, you’ll need to submit a formal letter to your dealer and the vehicle manufacturer. This letter should outline the situation and provide your documentation of the issue and your attempts to have it rectified. Since this is a formal communication about a legal matter, it may be helpful to have it delivered via certified mail to ensure receipt.

In summary

The lemon law protects car buyers in the event that their purchase goes sour. If a car is found to have a major defect (covered under its warranty), the lemon law requires manufacturers to make it right at no cost to the customer. While the exact specifics can vary state-to-state, manufacturers are given a set number of attempts to repair the vehicle before they are required to refund or replace the vehicle. If you suspect you’ve bought a lemon, it’s good practice to keep thorough documentation of any servicing the car receives. By knowing your rights and how the law applies to them, you can potentially turn that lemon into lemonade.