The lemon law - A guide to state and federal consumer protection laws

By Stephanie Moore

You scrimped and saved, read on How to Buy A Car, found your car, got a great deal, and just attempted to drive it home. Halfway down the street it stalled. You got it started again, but two blocks later it stalled again. Did you just get a lemon?

The (somewhat) technical definition of what constitutes a vehicle that is a "lemon" is: any new vehicle that has a substantial problem that isn't fixed within a reasonable number of attempts, or that has had a certain number of days out of service.

But how do you define the meaning of "substantial problem," "reasonable number of attempts," and "certain number of days" when it comes to dealing with a problem car?

There are general federal and state lemon laws that you can turn to, to see if your lemon fits the bill and, if it does, what you can do about it. Three sets of laws apply to defective vehicles and products in the United States.

1. The Magnuson-Moss Warranty Act
Magnuson-Moss is a federal law that protects the buyer of any product that costs more than $25 and comes with a written warranty. The act prevents manufacturers from drafting grossly unfair warranties. It also makes it economically viable to bring warranty suits by providing the award of attorney's fees.

2. The Uniform Commercial Code
The UCC applies to all 50 states (and D.C., Puerto Rico, etc.) and covers contracts dealing with the sale of products. The UCC gives the consumer the right to a refund or replacement of a lemon. The UCC, however, does not define a Lemon, so it's up to a court to decide if an auto company must give you a refund or a new car. The Magnuson-Moss act and many state lemon laws also provide for attorney fees under the UCC.

3. State-Specific Lemon Laws
Most state lemon laws specify that a manufacturer must provide a refund or replacement for a defective new vehicle when a substantial defect cannot be fixed in four attempts, a safety defect within two attempts or if the vehicle is out of service for 30 days within the first 12,000 to 18,000 miles or 12 to 24 months.

Success in using state lemon laws depends upon three things: keeping good records, providing the right notice, and using arbitration programs where required. As with all cases involving two or more parties, it is important to document the transaction. When it comes to dealing with auto manufacturers and dealers, it's even more important. The car business is the big leagues -- you're dealing with professionals who will do just about whatever it takes to win.

Next: Essential steps

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