Warranties & Lemon Laws  

Buying a motor vehicle is a large expense for most people. If the car is defective, or a “lemon,” it can cause considerable financial and personal hardship. There are federal and state laws to protect consumers who buy such lemons. These are Lemon Laws. To recover under the lemon law, you must meet certain requirements. You also must follow particular steps. It is important to know your rights under these laws before you buy a new car or certain used cars.  

All new cars come with a manufacturer’s express warranty included in the sales price. By law, the warranty must cover certain parts of the engine and transmission. It must also cover certain parts of the drive axle, brakes, steering, and ignition system. The dealer generally must repair any covered part during the warranty period. The dealer must give you a copy of the written warranty when you buy the car. If you buy a car from a private individual, the Lemon Laws will not apply. 

New York has a “Lemon Law” for new cars and one for used cars. In general, to be covered under either law, you must be able to meet the following conditions:  

• A manufacturer’s new car warranty covered the car at the time of original delivery;
  
• You purchased or leased the car either within the first 18,000 miles of its original delivery. Or, you purchased the car within two years, whichever is earlier;
  
• The car had a sale or lease price of at least $1,500;
  
• The car was either purchased or leased in New York or is currently registered in New York; and
  

• The car is primarily used for personal, family or household purposes.
  

The law applies to any defect or condition that substantially impairs the value. This is known as “nonconformity.” Whether the defect substantially impairs the value depends on the situation. In general, it must be a serious problem, but it also could be several small problems that add up to a serious problem. Lemon Laws do not cover defects and conditions from accidents. They also do not cover defects and conditions from abuse or neglect. If you make unauthorized changes to the vehicle the Lemon Laws may no longer cover it.  

If the car does not conform to the warranty, the manufacturer or its authorized dealer must repair it. They cannot charge you for the repairs. If they cannot repair the car within a reasonable number of attempts, you can request a full refund. You can also request a replacement car instead. 

If your new car has a problem that meets the above requirements, report it immediately to the dealer. The dealer is then required to report it to the manufacturer within seven days. Unless an attorney tells you otherwise, continue to make your monthly payments on the car. 

If the dealer refuses to repair the car within seven days, contact the manufacturer. Do this in writing and send the letter by certified mail, return-receipt requested. You should describe the problem with the car and state that the dealer has refused to make the repairs. The manufacturer then has 20 days from receipt of your notice to start repairs on the car.  

If the defect substantially impairs the value of the car, the manufacturer must refund your money or give you a replacement car. The replacement must be comparable in mileage, model year and value to yours. You get to choose which you would prefer. The manufacturer only has to refund or replace if the value of the car is not substantially impaired. The same is true if the problem is due to neglect or unauthorized alteration of the car.  

If the dealer does agree to repair the car, they must do so in a reasonable number of attempts. Less than three attempts to fix is usually considered reasonable. If the problem exists after three attempts to fix it the car may be a lemon.  If the car has been out of service for more than 15 days, it may be a lemon. If a part is unavailable, the days caused by that delay do not count toward the 15 days. But the dealer must use due diligence in trying to get the part. The warranty period gets extended for each day the car was out of service.  

After the dealer has made three or four attempts to repair the car and cannot, or if the car has been out of service for more than 15 days, the dealer must refund your money or give you a comparable replacement vehicle. If you financed the car, some of the refund may go to the bank to pay off the loan. If you leased the car, the dealer must terminate the lease if the car is a lemon. The dealer cannot collect early termination fees.  

It is very important that you are able to show the number of repair attempts. You also need to keep track of the number of days the car has been out of service. You should carefully document all repair attempts. Keep copies of all work orders, repair bills, and correspondence. Document all telephone calls and try to get as much information in writing as possible. Also, check all work orders and repair bills to see how the dealer describes the problem. A dealer could change the description so it looks like it is repairing a different problem. This could prevent you from getting to three repair attempts for the same problem. 

If the dealer refuses to refund or replace the car, you can file a lawsuit to enforce your rights under the lemon law. You must file your case within four years of the date of the car’s original delivery. If you win in court, you can recover your attorney’s fees.  

You can also choose to resolve the dispute using a state-sponsored arbitration program. The New York Attorney General’s Office has such a program. To use the program, you must first complete a “Request for Arbitration” form. You can get the form from the Attorney General’s website (https://ag.ny.gov/). You can also pick the form up at any of the Attorney General’s regional offices. Complete the form and return it to the Attorney General’s Office. The Used Car Lemon Law Arbitration Unit will decide if your case is eligible for arbitration.  If accepted, the form is forwarded to the Administrator for processing. The Administrator will appoint an arbitrator who hears your case within 35 days. If the Administrator rejects your claim, it notifies you and provides an explanation. 

There is also a federal law covering defective motor vehicles. This law is the Magnusson Moss Warranty Act. The Act covers other products besides motor vehicles. Also, the compensation you can receive is different from New York’s lemon laws. If you cannot meet the requirements of New York’s lemon laws, you may still be able to recover under federal law. An attorney can help you decide whether you should pursue a claim under the federal law, the state law, or both. 

Legal Editors: David Kassell, Esq. and Mark Grossman, Esq., May 2018