Lemon Law

Lemon law: Know your rights

What is the “lemon law?

In California, the “lemon law” is called the Song-Beverly Consumer Warranty Act, and it is found at California Civil Code Sections 1790 through 1797. In general terms, it permits consumers to seek a replacement or a reimbursement of purchase price for major consumer products which are defective and which cannot be repaired within a reasonable number of repair attempts.

There is also a federal “lemon law”, called the Magnuson-Moss Warranty Act, which is found at 15 United States Code Section 2301 through Section 2310. It is very similar to the California law. In most cases, either law can apply. However, in most instances the Song-Beverly Act provides more protection than the Magnuson-Moss Act.

How does the “lemon law” work for a consumer?

The ‘lemon law’ permits a consumer to seek replacement or reimbursement of purchase price of a vehicle (or major consumer product) if the manufacturer or dealer cannot repair a defect or defects within a reasonable number of repair attempts.

The manufacturer is entitled to an offset for use of a vehicle, but only up until the first time the consumer brings the vehicle back to the manufacturer for the unrepairable defect. Manufacturers often try to negotiate much larger offsets with consumers, but this actually violates the law. The law on offsets under Song-Beverly is as follows: the manufacturer is only entitled to an offset calculated by multiplying the purchase price times a fraction, having its numerator as the number of miles at the time of the consumer’s first repair attempt upon the unrepairable defect, and the denominator being 120,000, a figure chosen by the California legislature as representing the average life of a passenger car.

As an example, let’s say that John buys a car for $20,000.00. He has major brake problems for which he seeks repairs at 1,000 miles, 5,000 miles, 10,000 miles and 20,000 miles. The manufacturer, in negotiating with John, will often try to convince him that it is entitled to an offset for 20,000 miles of use. This is incorrect. The Song-Beverly offset calculates the offset at 1,000 miles, the number of miles for the first repair attempt. Civil Code Section 1793.2 (d) (2) (C). In John’s case, the $20,000.00 purchase price is multiplied by 1,000 over 120,000, or 1/120th, and the offset is about $167.00 dollars. Thus, John properly claims in settlement of his claim $19,833.00.

Does the “lemon law” apply to minor defects, or only significant defects?

The Song-Beverly Act applies to defects which constitute a substantial impairment to the use, value or safety of the vehicle to the owner or lessee. Thus, minor inconveniences (static in the radio, for instance) normally do not make a lemon law claim. Serious problems with brakes, transmission, engine function, inoperable air conditioning, persistent water leaking, to name a few, are examples of cases where juries have awarded damages to the plaintiff.

What are the legal requirements of the lemon law? Is there a requirement that a lemon law claim involve four repair attempts for the same defect within the first year?

Manufacturers have for years been putting out false propaganda that a consumer does not have a lemon law claim unless he or she has four repair attempts for the same defect within the first 18,000 miles. This is simply incorrect. It is an effort by car manufacturers to discourage otherwise worthy consumers from pursuing claims for defective products.

The correct standard is whether the consumer has given the manufacturer a reasonable opportunity to repair the vehicle within the warranty period. A reasonable opportunity usually involves more than one repair attempt; I have seen few cases succeed with only two repair attempts, and juries and judges generally expect at least three repair attempts. “Within the warranty period” means exactly what it says: if your car has a drive train warranty for 70,000 miles and the drive train is defective, then you have 70,000 miles to have the manufacturer make the necessary repairs effectively. If they don’t fix the drive train, and if you have given the manufacturer a reasonable number of repair attempts, then you have a lemon law claim.

Also, if the manufacturer cannot fix the problem within the warranty period, and you notify the manufacturer or its dealership representative in writing within 60 days after the last failure to repair the problem, then the warranty does not expire as to that defect. Thus, if the consumer above had notified the manufacturer of its failure to repair the vehicle within 60 days after the last unsuccessful repair attempt, then the warranty does not expire as to that drive train defect.

There is something called the “lemon law presumption”, and this is the only part of the lemon law where there is a requirement of 4 repair attempts within the first 18,000 miles. This is a legal presumption affecting the burden of proof in a lemon law lawsuit. Normally, the plaintiff bears the burden of proving that he or she has given the manufacturer a reasonable number of repair attempts to fix the vehicle. If, however, the consumer proves that he or she brought the vehicle in for repairs for the same defect four times within the first 18,000 miles, or if he or she proves that the vehicle was out of service 30 or more days within the first 18,000 miles, then the law shifts the burden of proof to the manufacturer to prove that it was not given a reasonable opportunity to fix the vehicle.

Also, if the car has a defect “likely to cause death or serious bodily injury if the vehicle is driven,” and the consumer has had two or more repair attempts within 18,000 miles and has directly notified the manufacturer of the need of repair of the defect, the lemon law presumption applies to shift the burden of proof over to the manufacturer.

As a practical matter, plenty of lemon law cases go forward without the lemon law presumption. The only requirement upon the consumer is that he or she give the manufacturer a reasonable number of repair attempts within the warranty period. If this is done, and the vehicle still is not repaired, the consumer has a lemon law case.

Do I have to pay a lot of money to enforce my “lemon law” rights as a consumer?

Positively not. The Law Offices of Robert F. Brennan handle almost all of our lemon law cases on a contingency basis, or sometimes with the client merely advancing some of the case costs. Lemon law claims are generally very affordable to consumers. The lemon law provides that a prevailing consumer in a lemon law claim can collect his or her attorney’s fees and costs from the manufacturer. Lemon law settlements almost always include money to cover the consumer’s attorney’s fees and costs.

Does the “lemon law” apply to leased vehicles?

Yes. The only major difference is that the plaintiff’s damages are calculated according to his or her obligations under the lease, as opposed to his or her obligations under a purchase contract.

Does the “lemon law” apply to used cars?

Yes, if the used car is covered by a warranty. If the used car is covered by a manufacturer’s warranty, then the consumer can bring a lemon law claim against the manufacturer just as if the vehicle were new. If a consumer buys a used vehicle from a dealership without a manufacturer’s warranty, but with a dealer’s warranty, the consumer can pursue the dealer for a lemon law claim.

Again, this is an area where manufacturers have filled the world wide web with false information that the lemon law does not apply to used cars. This is simply incorrect.

Does the “lemon law” apply to cars bought “as-is”?

No. For a lemon law claim, there has to be a warranty. When a consumer buys a car “as-is”, he or she is expressly disclaiming any warranty. However, the consumer may yet have a fraud claim, because fraud claims are not invalidated by an “as-is” purchase provision. Further, if the dealer or manufacturer does not comply with the law of clearly and conspicuously disclosing the “as-is” terms, then the consumer may have a lemon claim.

Does the “lemon law” apply to cars past their warranty period?

Generally, no. The exception is where the defect arises within the warranty period, and is not fixed within the warranty period, and the consumer gives the manufacturer and dealer written notice within 60 days of the last unsuccessful repair attempt for the defect. In such a case, the warranty is extended as to that defect until it is repaired.

Does the “lemon law” apply to cars bought with a service contract only?

Yes. As of 1998, the California Court of Appeals ruled that a service contract gives a consumer lemon law rights. If a consumer buys a car with a service contract, there is at the very least an implied warranty for up to a year’s time after purchase. A purchase with a service contract cannot be an “as-is” purchase. The consumer would have lemon law rights against the selling dealer and also the service contract provider.

Does the “lemon law” apply to other major consumer products, such as boats, planes, RV’s or motorcycles?

Yes. My office has successfully handled several such cases involving boats, motorcycles and RV’s.

What are some common examples of “lemon law” situations?

Some common examples would include faulty brakes, ABS brake failures, transmission failures and “hard-shift” or “no-shift” situations, engine dying complaints, major electrical difficulties with the vehicle, on-board computer malfunctions, repeated no-start situations, and others. Any defect which substantially impairs use, value or safety of the vehicle can be the subject of a lemon law lawsuit.

What can I expect if I file a “lemon law” lawsuit?

This is a very broad question. In general, the sale or leasing of cars without a proper disclosure of known defects or dangerous conditions with the vehicle constitutes auto fraud.

What is automotive fraud?

The general remedy is a refund of purchase price, less a use offset, or a replacement vehicle. Out-of-pocket expenses connected with the defective vehicle or product can also be reimbursed. In some instances, the jury or judge can award a civil penalty of up to two times plaintiff’s damages. Also, the prevailing plaintiff has his or her attorney’s fees paid by the losing party.

What are some common examples of auto fraud?

Frequent examples which my office handles include sales or leases of cars with undisclosed collision damage, sales or leases of cars with rolled-back odometers, sales or leases of cars with undisclosed “lemon law” histories (i.e. the car was repurchased from a prior owner as a “lemon”, and this was not disclosed to the subsequent buyer), fraudulently putting a consumer into a lease where he or she thought they were purchasing the vehicle, non-disclosure of warranty restrictions and limitations, charging consumers for accessories not actually sold with the vehicle (e.g. airbags), fraudulent car repair situations and others. Automotive fraud is a very broad area. There are lots of different types of fraud, and the defendants include insurance companies, car dealers, car manufacturers, extended warranty companies, service contract companies and car finance companies. My office has also handled fraud cases against boat manufacturers and boat dealers.

What is lease fraud and why would a dealer cheat a consumer on a lease?

Dealers can often make more money on a lease, sometimes above the table and sometimes not. All leases are financed, and dealers often get kickbacks on lease finance agreements which are larger than the kickbacks they receive on sales. Dealers often put the large “lease inception payments” in their pockets as well; in a sale, this would be a down payment and would ultimately represent the owner’s equity in the car. Further, leases give dealers the opportunity at lease-end penalties, such as mileage or condition penalties, which are not present for sales. For instance, when you lease a car, the lease normally specifies how many miles you can drive under the lease. In many leases, it adds up to somewhere around 12,000 miles per year. If you drive more than that, the dealer and/or the leasing company can impose a mileage penalty on you, which can involve a whole lot of money if you’ve driven quite a bit over the limit. Also, the dealer may attempt to charge high retail prices for dents, scratches, any accident damage or wear & tear items on the vehicle when you turn it in on a lease, and you would owe the money to the dealer and/or the finance company. Leases frequently involve less favorable finance terms for consumers with good credit. For these, and other, reasons, many dealers try to steer consumers into leases even if purchases would make more sense for the consumers financially. Some dealers use fraud to do this. This is where you need to consult with our firm.

What can I expect if I file an automotive fraud lawsuit?

Auto fraud cases tend to be more lucrative for both consumer and attorney, if they can be proved. Juries and judges alike do not take kindly to fraudulent concealments of serious defects with vehicles or other major consumer items. Such defects can also pose grave dangers to the vehicle owners, since the vehicles are now not as safe as designed by the manufacturer.