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Home > Financial Resource Center Home > Auto Buying > Learn About Lemon Laws

Learn About Lemon Laws

You bought a brand-new car. That smell. The shiny paint. Peeling the protective plastic cover off the infotainment screen! It’s perfect. You’re excited. Your friends are jealous. And it’s stalling every time you stop at a light and the electrical system shuts off every ten minutes. Your car, your new baby—is a lemon.

You’re not alone, though. Around 150,000 cars a year are considered lemons, or about one percent of new car sales. That’s just a little higher than your chance of being audited by the IRS. Take your pick on which is worse.

What defines your vehicle as a lemon? That’s going to vary state to state. There are a few basic rules that form the core of most states’ lemon laws. DMV.org has an interactive map where you simply click your state and it gives you all the details. But before you get into the weeds, here are a few of the basics to keep in mind.

The basics:

  • Fewer than 18,000–24,000 miles
  • One to two years old
  • Three or four attempts to repair the same issue
  • 15–30 days in the shop

First off, lemon laws predominantly cover new cars. There are a few states that have legislation regarding used cars, but we will get more into that later. Being that your car is brand new, it’ll still be under the manufacturer’s warranty. Make sure you take your vehicle to the dealership.

Why the dealership? They just sold you a car that’s having a major malfunction! But remember, they only sell and service the cars, they don’t build them. The vehicle is still going to be under warranty, so taking it to the dealership simplifies that process. Also, some states require that a manufacturer-authorized dealership diagnose the defect. And it must be a substantial defect.

What counts as a “substantial defect?” It’s a vague term, but “greatly affecting the usability or value of the car,” is a good, basic definition. Constant stalling or an electrical fault are usability problems, peeling or flaking paint effect the value. If the dealer can repair the issue in one or two tries, it’s a hassle. If it goes beyond that, start looking to file a lemon claim.

There are exceptions in some states for issues that could be life threatening or cause injury. If there are brake issues or the windshield keeps falling out, it could speed up declaring your vehicle a lemon.

In some cases, it doesn’t have to be one issue. This is where the days in the shop are important. Maybe your window won’t roll down and they fix it. Two weeks later the dome light falls off. Now the blinker is stuck on. A series of small issues that are resolved but cause the vehicle to be in the shop for 15–30 days could qualify your vehicle as a lemon—depending on where you live.

Some states require the vehicle to have been purchased in that state to qualify under their laws. This doesn’t necessarily mean you have to take your vehicle to a different state to get the work done, but you might have to file the claim in the state where you bought the vehicle.

Some states do have lemon laws to protect used vehicles. They are all very restrictive, so it would benefit you to look them up before you buy a used car—most coverage periods are around a week or two and a few hundred miles at most. Also, there needs to be evidence that the issue was present when the car was sold.

In the end, you are taking on a multi-billion-dollar company when it comes to lemon laws. It is a daunting task. You are going to need a lawyer. Good news, however: the manufacturer is going to pay for your attorney. Choose a lawyer who has a background in lemon law, they’ll know to itemize their fees into what is asked from the manufacturer and not just a percentage. If your lawyer is willing to take the case “sight unseen” or encourages you to take a cash payment and keep the vehicle, find a new lawyer.

Dealing with a lemon can be difficult. Most people need their car to get to work, to cart kids around—even if you don’t, a vehicle is a major purchase that ties up a lot of money. Having it not work as expected can be rough. Document everything, research your state’s laws (even before you buy your next car), contact a few attorneys. The law is in your favor in most states—it’s a process, but worth it to get a working vehicle in the end.

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