Federal Lemon Law
Before deciding to file a suit, you should determine if your state law Lemon Law qualifies your vehicle as a "lemon." If your vehicle does not qualify as a "lemon," you may still have recourse under the federal Lemon Law ( Magnuson-Moss Warranty Act) or other federal statutes. This Act generally covers sales (not leases) of "consumer goods" such as new cars, used cars, boats, RVs, computers, appliances and other new consumer products that include written warranties.
Magnuson-Moss is a federal law that governs consumer product warranties, protecting buyers of any product that costs more than $25 and comes with a written warranty. The act requires manufacturers and sellers of consumer products to provide consumers with detailed information about warranty coverage and ensures consumers get an opportunity to compare warranty coverage before buying. Some limitations apply where the act does not apply to warranties on services, only on goods, unless the warranty covers both the parts provided for a repair and the workmanship in making that repair. Magnuson-Moss also makes it less difficult for consumers to pursue a remedy for breach of warranty.
Basically, if a consumer has a warranty on their vehicle and their defective vehicle has not been fixed after numerous repair attempts, the warranty has questionably been breached. A benefit that federal Lemon Law most often comes into play is when a used car complaint comes into our firm. Breach of Warranty laws back those consumers with vehicles that start to have problems outside of the lemon law period, as well as consumers who have purchased used vehicles.
The federal lemon law also does not place mileage restrictions on motor vehicles, unlike most state lemon laws. To qualify under the federal Lemon law, you must generally have a defective product that suffered multiple repair attempts under the manufacturer's warranty. Under the federal Lemon Law, lemon owners receive a cash award and can keep their vehicle, but cannot receive a free replacement vehicle. This restitution is the difference between the Kelly blue book value of the car in excellent conditions vs. the value of the car in good or poor condition.
The federal law acknowledges two types of warranties:
- Express Warranties
- Implied Warranties
An express warranty is anything that a seller represents to a buyer about the vehicle and primarily become part of the sales contract. They usually include statements or declarations in writing such as those provided by the manufacturers in Owner's Manuals and other written sales or advertising materials.
Dealers are held responsible if vehicles they sell do not meet reasonable quality standards. These obligations are called implied warranties which are unspoken, unwritten promises to the buyer that the vehicle will function in the way it was intended. There are two types of implied warranties.
The most common type, an implied warranty of merchantability, is a Seller's basic promise that the goods sold will do what they are supposed to do and that there is nothing significantly wrong with them.
An implied warranty of fitness for a particular purpose refers to purchasing a vehicle based on the dealer's advice that it is suitable for a particular use; a dealer suggesting you buy a certain car that is capable of hauling a trailer is promising that the vehicle will be suitable for that purpose.
The exception of implied warranties are used consumer products being sold "as is." Therefore, it is important to be extra cautious in purchasing anything being sold "as is." Eleven states, including Maryland, Massachusetts, and New Hampshire prohibit consumer products from being sold "as is."
The Uniform Commercial Code (UCC) is a comprehensive set of laws governing the sale of products which have been adopted by all 50 states with slight variations. Under the UCC, the consumer has the right to a refund or replacement of a lemon but the UCC does not define what a "lemon" is. It is up to the court to decide if a manufacturer must give you a refund or a replacement vehicle. The Magnuson-Moss Act and many state Lemon Laws also provide for attorney fees under the UCC.
For used vehicle sales, the UCC states the sale automatically includes an implied warranty that the vehicle is fit for transportation. However, many used car dealers typically deny or disclaim the implied warranty by selling the vehicle "as is." In the few states that prohibit dealers from disclaiming the implied warranty (such as the District of Columbia, Maryland, Massachusetts and New Hampshire), the UCC can be more effective than a used car Lemon Law would be.
The Federal Trade Commission's Used Car Rule requires dealers who sell five or more cars per year to post a Buyers Guide in every used car that is put up for sale. This guide must show whether the vehicle is being sold "as is" or with a used car warranty, what percentage of repair costs, if any, is covered by the dealer under the warranty and a list of the major defects that can occur in used vehicles.