Lemon Law 101: Understanding the Law and Your Rights

Aug 12, 2021 by Abby Adams, Senior Counsel, Dispute Resolution Programs, BBB AUTO LINE

We are all familiar with the old proverb, “When life gives you lemons, make lemonade.” But what happens when you buy a lemon? In the automotive world, a “lemon” is a vehicle with a defect(s) that substantially impairs its safety, use, or value. A lemon law protects you in this scenario.  

If your vehicle is under warranty, lemon laws require your vehicle manufacturer to repair your vehicle and, if they cannot do so after a reasonable number of attempts, they must either replace or refund your vehicle. There is a federal lemon law, known as the Magnuson-Moss Warranty Act (“Mag-Moss”), as well as state lemon laws, in place to protect consumers from getting stuck with “lemons.”  

What should you do if your car is under warranty and you think you have a lemon? To start, review your warranty to see if there is a dispute resolution provider listed, such as our BBB AUTO LINE program. We provide a free service to vehicle owners to quickly and easily address vehicle defects covered under warranty. You can find a full list of manufacturers who voluntarily participate with us here

 

Federal vs. State Lemon Laws 

While the process of working with us is simple, there is a bit of complexity behind what we do. For instance, let’s break down the differences between Mag-Moss and state lemon laws. It is important to know that each state’s lemon law is different. On our website, we break down lemon laws by state.  

One of the biggest differences between Mag-Moss and state lemon laws is that the federal law covers all products that come with a written warranty, not just vehicles, whereas state lemon laws apply only to vehicles.  

Another key difference is that, even for vehicles, in general, the federal lemon law is broader than state lemon laws, which makes it a good alternative for consumers who do not qualify for their state’s particular lemon law. Here are some examples: 

  • Most state lemon laws only cover new vehicles, whereas Mag-Moss covers used cars that came with a written warranty.  
  • Most state lemon laws only cover cars, light trucks, and SUVs. The federal lemon law covers a much wider variety of vehicles, including ATVs, motorhomes, and boats. 
  • Most state lemon laws are limited to “personal use” vehicles. Mag-Moss does not include that limitation, meaning you can file a claim for a vehicle that is used for business purposes as well. 

 

While the federal lemon law's broader scope provides many benefits to consumers, its monetary remedies are more limited than state lemon laws'. If you prevail under the state lemon law, you are eligible to receive the full purchase price of the vehicle. Under the federal lemon law, you are only eligible for the difference between what you actually paid for your vehicle and what you would have paid at the time of purchase, had you known about your vehicle’s defects. 

Just as the federal lemon law differs from state lemon laws, state lemon laws vary from state to state. The biggest differences are usually in: 

  • The type of vehicles a state’s lemon law will cover as well as whether the state will cover new or used vehicles, or both, 
  • The time in which a consumer must report a defect (known as the lemon law rights period), and 
  • The number of reasonable repair attempts (the number of times the manufacturer has to repair your car before it is deemed a lemon).   

 

If you are looking for more information on what to do if you discover your vehicle has a defect, read my blog: How to Navigate a Vehicle Warranty Claim During the Pandemic. 

If you have questions about your state’s lemon law, BBB AUTO LINE is here to help. You can check the BBB AUTO LINE lemon laws by state webpage to find out the details on your state lemon law or contact us directly at 1-800-955-5100 to find out if your vehicle is eligible for a lemon law claim under either the federal lemon law or your state’s lemon law. If you think you need to submit a claim for a vehicle defect, get started here.  

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