Lemon Law FAQ
by Dani K. Liblang of Liblang & Associates, P.C.
When you purchase or lease a new car or truck, you have the right to receive the peace of mind and convenience of a vehicle that performs without serious mechanical problems or repeated repairs. If your new vehicle is not performing up to these standards, you have a number of options under state and federal law. We hope the following information will help you resolve any problems you might be having.
Michigan law provides that the manufacturer of a new vehicle must repair your vehicle under warranty within a "reasonable time." A "reasonable time" is four times for the same problem or thirty days in the shop for the same or different problems that occur during the first year of ownership.
Q. What if the first repair occurs under warranty, but the problem continues to exist after the warranty expires?
A. As long as the problem and the first repair attempt occur during the first year of ownership, all repairs for the same problem count toward the four times, even if the subsequent repairs take place after the first year or after the warranty expires.
Q. What if the vehicle spends 30 days in the shop, but not all at once and not all for the same problem?
A. Each day or part of a day that the vehicle spends in the shop during the first year of ownership counts toward the 30 day limit. For example, the vehicle could spend 7 days in the shop for a transmission problem, 3 days for an engine problem, 1 day for an electrical problem, 4 days for brake problems, 5 days for air conditioning or heating problems, and 10 days for miscellaneous driveability problems (e.g., running rough, stalling, hesitation, etc.) Since the total time equals 30 days, the vehicle qualifies as a "lemon."
Q. What do I need to do to protect my rights under the "Lemon Law"?
A. Once your vehicle has required repairs three times for the same thing, or has spent 25 days in the shop, you need to send a letter, by certified mail, return receipt requested, to the manufacturer advising them of the problems and that you want to give them their "last chance" to repair the vehicle under MCLA 257.1403(3) (the Lemon Law). The law requires that the manufacturer give you the proper address in your owner's manual or warranty booklet that comes with the vehicle. The manufacturer must then notify you within a reasonable time of a repair facility that is "reasonably accessible" where you must take the vehicle. After you deliver the vehicle to the designated repair facility, they have five business days to fix your vehicle. Lack of parts is no excuse. If the problems are not fixed within five days, or the problems occur again, then you have a right to a refund or replacement of the vehicle.
Q. Do I need a lawyer to enforce my rights under the Lemon Law?
A. Not always. You can write and send the "last chance" letter yourself. If you have questions about the proper wording of the letter, or how to send certified mail, you can call or e-mail our office and we will provide a sample letter and answer your questions at no charge. You should keep your original records, sending only copies through the mail. You should also keep a copy of every letter that you send.
Q. What if the "last chance" repair doesn't work and the dealer and manufacturer refuse to give me a refund or replacement vehicle?
A. The Lemon Law provides that if you have to hire a lawyer in order to enforce your rights, you may recover costs and attorney fees as part of your damages. In order to protect the right to recover costs and attorney fees, you must first go through the manufacturer's "alternative dispute resolution" process (arbitration) if the process complies with federal regulations. Information on this process should be in your owner's manual or warranty booklet that came with the vehicle. Some examples of arbitration programs are the Better Business Bureau, Chrysler Customer Satisfaction Board, AutoCap, and the Ford Consumer Appeals Board. This arbitration result is NOT binding on you, but it IS binding on the manufacturer. Thus, if you are satisfied with the result, you can accept the award and the manufacturer MUST abide by it. On the other hand, if you are not satisfied, you can reject and pursue your remedies in court. If you have questions about arbitration proceedings, or whether a particular manufacturer's process qualifies, please feel free to call us or e-mail us for a free consultation.
Q. What can I get if I have to go to Court?
A. If your vehicle is a "lemon" under the law, you are entitled to a refund or a comparable replacement vehicle. A refund under the Lemon Law includes your purchase price and the price of manufacturer's options installed by the dealer, less an offset for your use of the vehicle. The formula for determining the offset is set forth in the Lemon Law and is a fraction, the numerator of which is the number of miles at the first complaint, with the denominator being 100,000 miles, multiplied by the purchase or lease price, plus (in most cases) all miles after 25,000 miles:
(miles at first complaint)/100,000 x (purchase/lease price) + (miles over 25,000) = offset
You are also entitled to recover your costs and attorney fees from the manufacturer if you win your case.
Michigan's "Lemon Law" is only one of many other consumer-oriented laws. State laws include the Uniform Commercial Code, the Consumer Protection Act, the Motor Vehicle Service and Repair Act, and the Motor Vehicle Finance Act. There is also a federal law called the Magnuson-Moss Warranty Act.