What to Know About the Texas Lemon Law

Mar 10, 2022 by Juan Herrera, Vice President, Dispute Resolution Programs, BBB National Programs

A “lemon” is a vehicle that turns out to have one or more manufacturing defects that affect its safety, value, or use. If you feel that your vehicle fits this description, all is not lost. The good news is there are “lemon laws” that protect consumers whose purchases go sour.

In addition to the federal lemon law, called the Magnuson-Moss Warranty Act, states have their own lemon laws that help vehicle owners get defective vehicles repurchased, replaced, or repaired. 

Since each state’s lemon law is different, our website provides an overview of lemon laws by state. For our larger states, we are providing a more in-depth review of the laws and how BBB AUTO LINE can support consumers in lemon law disputes. Previously, we looked at Florida and California. Now let’s take a look at the Texas lemon law.  

 

What is the Texas lemon law?

The Texas lemon law is a state law administered by the Texas Department of Motor Vehicles that helps consumers who buy or lease new motor vehicles and have repeated problems getting their vehicles properly repaired (Tex. Occ. Code Ann. §§ 2301.001 et seq.).

 

What vehicles are covered?

The law covers new vehicles, purchased from a Texas dealer or lease company, that develop problems covered by a manufacturer’s written warranty. Specifically: 

  • Cars, trucks, vans, motorcycles, motor homes, towable recreational vehicles, all-terrain vehicles, neighborhood electric vehicles, and demonstrator vehicles that have been previously titled.
  • Note: There are some cases in which a used vehicle is covered (for example, if it is still under the original warranty). However, the relief is limited to repairs only. 

 

Who is covered under the Texas lemon law? 

The Texas lemon law covers a motor vehicle owner who is one of the following: 

  • A purchaser of a motor vehicle at retail from a Texas dealer; 
  • A lessor or lessee (other than a sublessee) who purchased or leased a motor vehicle from a Texas dealer or lessor;
  • A person who is a resident of Texas and has registered the vehicle in Texas;
  • An active member of the U.S. armed forces who purchased or leased the vehicle at retail and is stationed in Texas at the time a claim is filed; or
  • A transferee or assignee of a retail purchaser, lessor or lessee, as long as the transferee or assignee is a resident of Texas and registered the vehicle in Texas.

 

How do I know if my vehicle is considered a lemon under Texas lemon law requirements?  

The consumer must prove all the following conditions:

  • The defect or condition creates a serious safety hazard (a life-threatening malfunction or nonconformity that substantially impedes a person’s ability to control or operate a motor vehicle or causes a risk of fire or explosion) OR substantially impairs the vehicle’s use or market value. 
  • The serious defect or abnormal condition is not the result of abuse, neglect, or unauthorized modifications or alterations of the vehicle.
  • The defect or condition is covered by a manufacturer’s written warranty.
  • The dealer has been given a reasonable number of attempts to repair the defect or condition.

 

The consumer must also report the defect or condition to the dealer or manufacturer within the warranty term and do so via written notice.  

 

What is considered a “reasonable” number of repair attempts?

The TX lemon law presumes that the manufacturer, distributor, or any of their agents or franchised dealers has been given a reasonable number of attempts to fix the defect if one of the following tests are passed: 

  • Four-times test: The defect continues to exist after being subject to repair four times for the same defect within the first 24 months or 24,000 miles (whichever comes first). 
  • Serious safety-hazard test: The defect poses a serious safety hazard that is not repaired after the vehicle has been taken for repair twice during the first 24 months or 24,000 miles, whichever comes first.
  • 30-day test: The defect covered by the original factory warranty still exists after the vehicle has been out of service for repair for 30 days or more - not necessarily all at one time - during the first 24 months or 24,000 miles. Note: if a comparable loaner vehicle was provided while the vehicle was being repaired, that time does not count toward the 30 days.

 

What is the manufacturer’s duty to repurchase or replace a vehicle?

If, indeed, your motor vehicle is a “lemon” that can’t be repaired under the conditions described, the manufacturer or distributor must either replace or repurchase the vehicle.

  • Replacement: The defective vehicle must be replaced with one that is comparable to the original vehicle and acceptable to the consumer, minus the mileage used. 
  • Refund: The vehicle must be bought back for the purchase price minus an amount charged for vehicle use, which is calculated according to a formula that considers the number of miles on the vehicle and other factors.

 

The law requires that, before bringing an action in court to enforce your rights, a consumer must first make use of the Texas state-operated arbitration program.

 

How can BBB AUTO LINE help?

In Texas, a lemon law complaint must be filed within six months following either the (1) expiration of the express warranty term or (2) 24 months or 24,000 miles following the date of the vehicle’s original delivery to a consumer, whichever comes first.

BBB AUTO LINE is a certified out-of-court mediation and arbitration dispute resolution program under the Texas lemon law and may be able to assist you

To be eligible for BBB AUTO LINE support, your claim must involve one of our participating manufacturers and fall within the eligibility guidelines set forth by that manufacturer’s program. 

To learn more about BBB AUTO LINE, or to open a claim, go to bbbautoline.org, select “FOR CONSUMERS” and submit the form, or call us at 1-800-955-5100. 

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