What is Lemon Law Compensation?
Lemon law compensation refers to the financial reimbursement—monetary damages—awarded to consumers who purchase a defective vehicle. A defective vehicle, or "lemon," is one that fails to meet standards of quality and performance. As such, lemon laws are regulations put in place in order to protect consumers from defective vehicles and to ensure they are compensated for their trouble.
For a vehicle to be considered a lemon, it must have a defect that is covered by the vehicle’s warranty and that cannot be repaired by the manufacturer or the dealer after a "reasonable number" of attempts. Oftentimes (and by a "reasonable number," it’s generally meant a minimum of three attempts that have not been successful), the vehicle is out of service for repairs for at least 30 calendar days before a final attempt at repair, in which case, the vehicle is considered a lemon and the consumer is eligible for lemon law compensation. A lemon law claim can be filed even if the defect in question is something unrelated to the vehicle’s safety and performance, such as a defect in the vehicle’s audio system, air-conditioning system, or even the ashtray.
Since lemon laws are really meant to protect consumers, lemon law compensation is provided to consumers because lemon laws require manufacturers and dealers to replace or refund defective vehicles and to reimburse consumers for other losses associated with owning a lemon. Consequently, in addition to a vehicle’s defects, consumers are also entitled to compensation for any consequential damages that resulted from their vehicle’s defects (i.e. driving a defective vehicle that breaks down and causes the consumer to be late to work or to become injured in a car accident). These damages can include the amount paid over for payments, insurance, taxes, title and registration fees, installation of aftermarket equipment, and loss of wages or earning power.
Note that though lemon law compensations are provided by lemon laws, lemon laws are state laws and, as such, are subject to limitations . For example, every state has its own statutes of limitations that can affect a consumer’s ability to take legal action under a lemon law: from the moment a consumer buys a vehicle, he or she has a certain amount of time in which a lemon law claim can be filed (Maryland lemon law claims, for instance, must be filed within one year from the date on which a manufacturer or dealer refuses to honor the terms of the vehicle’s warranty by failing to repair the vehicle). However, lemon laws provide a legal framework for pursuing lemon law compensation by providing consumers with remedies when their vehicles are defective and manufacturers and dealers fail to honor their warranty obligations. It’s not uncommon for manufacturers and dealers to attempt to deny some lemon law claims since they may wish to avoid their obligation to provide consumers with lemon law compensation, but lemon law claims are based in law and, as such, should always be taken seriously. Nonetheless, the lemon law’s remedy for a consumer is limited to return of the purchase price plus incidental damages and expenses, which is where lemon law compensation comes in. It’s important to note that lemon law compensation isn’t the same as getting a new vehicle. Rather, lemon law compensation is just one potential remedy available to a consumer whose defective vehicle is considered a lemon, and there are other remedies available to consumers as well. Additionally, lemon laws are only one method of compensation for consumers whose safety is put at risk by safety defects in their vehicles. The federal government also protects consumers from certain vehicle defects that pose a significant safety hazard through the National Traffic and Motor Vehicle Safety Act, which requires manufacturers to report to the National Highway Traffic Safety Administration any defects relating to motor vehicles or motorcycles that may affect both their safety and their performance. If the NHTSA determines that a vehicle poses a significant safety defect, they have the ability to recall the defective vehicles, ensure that manufacturers and dealers repair the defect, and award the consumer with compensation.
Forms of Compensation under Lemon Laws
Lemon law remedies vary from state to state, and there are typically several different forms of relief. Manufacturers may be required to repair or replace the defective vehicle, and on occasion even provide damages beyond the cost of repair. However, the precise form of compensation available will depend upon what the term "lemon" means where you live, and consequently how severe your vehicle’s defect(s) are under your jurisdiction’s lemon law statutes.
Parking in a dealership service department may not be the expected remedy for defectively defective vehicles, but under some jurisdictions it can be a distinct possibility.
If the dealer refuses to comply with the terms of an implied warranty, purchase or lease agreement, or an express warranty (one that is "written in stone", so to speak), you may hold the manufacturer liable for certain costs incurred as a result of a lemon automobile. These costs come in the form of damages as a measure of monetary compensation for their inability to fulfill a contractual obligation. Punitive damage awards, which are often paid rather than speculated upon by the jury, are determined by a number of factors. Some lemon law attorneys believe punitive damages to be the only type of damages that’s fair; however, compensatory damages are designed soley to compensate the consumer for any losses suffered as a direct result of the defect. A comprehensive list of compensatory damages is listed below:
In addition to compensatory damages, certain jurisdictions also allow for punitive damages. Generally, punitive damages are reserved for cases of intentional misconduct, malice, fraud, oppression, or grossly reckless conduct. A civil judgment sought against a lender must be punitive in nature if the jury finds the lender guilty of "grossly negligent, reckless or intentional violation" of state law, or grossly negligent, reckless or intentional conduct harmful to the consumer.
Certain jurisdictions also recognize a claim for wrongful repossession under lemon law. A wrongful repossession occurs when a lender repossesses a vehicle "without first having given proper notice and plaintiffs then seek a return of the property seized."
Are there fees for the lemon attorney to file a claim? Most lemon law firms charge no fees to file a lemon law claim. Our lemon law attorneys work on a contingency fee basis, meaning they work for you at no cost unless you win a lemon law case.
Who Can Get Lemon Law Compensation?
For a consumer to be eligible for lemon law compensation under the Lemon Law, certain requirements must be met. First, it is necessary that the purchased vehicle has defects or problems that impair the use, safety or value of the vehicle and that those problems are covered by the warranty given by the manufacturer or its agent. The warranty must cover the problems because the problem occurred within the warranty period. If the warranty period is still in effect when the consumer files the lemon law complaint, the consumer may be eligible for lemon law compensation.
Second, for the consumer to receive lemon law compensation, there must have been a reasonable number of unsuccessful attempts to repair the defects. What is a reasonable number of attempts? Most states provide that a consumer will not need to show a reasonable number of attempts when a vehicle is on the shop for 30 days or more. In Pennsylvania, the vehicle must be in the shop for 30 days. Florida provides 15 days. New Jersey is 20 days. Ohio is 30 days. In New York, the period is 30 days within the first 24 months.
Other factors that are usually present when a reasonable number of repair attempts are found to have occurred are: 1. the vehicle is less than 4 years old; 2. the vehicle has been with the dealer 30 or more days within the first 12 months; 3. the vehicle has less than 24,000 miles; 4. the repairs were performed at the dealer where the vehicle was purchased.
Third, the consumer must demonstrate the defect continues to exist after a reasonable number of repair attempts. What is a reasonable number? The Lemon Law statutes typically provide a presumption of a reasonable number of attempts when 3 unsuccessful attempts have been made. However, some states provide that there is no need to show reasonable number when the time and mileage requirements are met. The time and mileage requirements vary by state.
If you have a defective automobile and want to learn more about lemon law compensation, feel free to contact our office. You are under no obligation. This is the first step in determining whether you have a lemon law claim.
Ways to File a Lemon Law Claim
The first step in filing a lemon law claim is to notify the manufacturer of the defect. This is considered a BBB AUTO LINE request. The company then has 10 days to respond to the consumer’s complaint and address the problem. If the problem continues, the vehicle owner must work with the manufacturer to continue submitting requests for a resolution.
The manufacturer’s obligations
The manufacturer is obligated to make three attempts to repair the vehicle within the warranty term. If the manufacturer does not notify you of the need for another repair attempt and the problem continues after the third attempt, the manufacturer has failed to meet its obligations under the law and you may be eligible for a lemon law settlement.
The lemon law claim process
The next step in filing a lemon law claim is to send a letter requesting a buyback to the Manufacturer. Once the claim is filed, the Manufacturer is given 35 days to respond. After the company responds, a hearing date will be requested with the BBB AutoLine program or with the appropriate civil court. At the hearing, the judge or arbitrator will examine the facts and make a decision based on the particular circumstances of the case.
Details to submit with your lemon law claim
You will need to provide the following information for a lemon law claim: Make sure to keep all your documentation in order, as this is the core of your lemon law case. Keep good records of all vehicle repairs, the parties involved in the repairs, and all relevant communications between you and the manufacturer.
Tips for making a successful lemon law claim
There are several things you can do to increase the success rate of your lemon law claim: After submitting a lemon law claim, the manufacturer must respond within 35 days. If they do not, the company has automatically surrendered your right to a lemon law defense. If the manufacturer has attempted three repairs of the vehicle, they will most often be required ask the permit agency for an additional two repair attempts.
What to do if your lemon law claim is denied
Sometimes a lemon law claim may be denied. If this occurs, your lemon law attorney will submit the claim to court and continue the process. Keep in mind that an attorney specializing in lemon law will typically handle these claims for a flat fee. The process may involve: If you experience a lemon vehicle, contact a lemon law attorney immediately so that you can take steps to hold the manufacturer accountable.
Variations Among States in Lemon Law Compensation
Lemon Law compensation is not a "one size fits all" affair. Each state has its own Lemon Law, some states have more than one, and some still don’t have a Lemon Law at all. For example, the Tennessee Lemon Law only provides relief for cars that they purchased from a manufacturer or dealer and are less than 50,000 miles. Georgia’s law doesn’t even go so far as to require a new car, it is only for new vehicles "that have been delivered to the ultimate purchaser." Some must be entered into within one year of original purchase or lease; others require you to file a petition in a certain time frame after the "final repair attempt." Then there are those that state you have until the statute of limitations runs out, just like about any other contract. Yet, on the other hand, if your statute of limitations is four years, then you should have the same time period to file your Lemon Law claim. Otherwise, your rights would seem to be diminished. Some Lemon Laws provide for pre-sale damages, which vary from state to state and some provide for attorney’s fees and costs for bringing the lawsuit . Other states have statutes providing for compulsory arbitration, those that don’t may have an informal method for resolving disputes. Still, there are others that have no lemons registered with the Lemon Law for the last year or so. Keep in mind that some states Lemon Laws are discretionary, meaning that you will have to contact the Lemon Law program or agency within a specified number of days and ask them to consider your complaint, while others require mandatory participation by the manufacturer or dealer. To compound these differences and the consumer’s confusion, there is the proper forum in which to file your Lemon Law suit. Some states allow you to file in the local county, while others require you to file in the county in which the car was purchased. And still others require that you file directly with the Federal Trade Commission (FTC.) So that you don’t choose the wrong forum and possibly forfeit any rights to proceed, you should contact an experienced lemon law attorney who knows the rules for your state and locality.
Difficulties in Obtaining Lemon Law Compensation
While the lemon law provides for compensation in the form of refunds and/or damages, there can be hurdles that need to be cleared before a consumer can recover any such compensation. One challenge faced by many consumers is the inability of the dealership or manufacturer to pay a restitution amount voluntarily that the consumer or his/her attorney believes should be paid. The consumer may need to pursue court action against the manufacturer or their dealers to recover compensation, which usually takes longer and cost more than would be incurred if the matter was resolved by way of a settlement offer. Another hurdle may arise if the manufacturer or their dealer fail to promptly carry out the terms of the settlement agreement. In either event, enforcement proceeding may be necessary.
The Importance of Legal Guidance in Lemon Law Claims
The nuances of lemon law cases can make them relatively simple to navigate, but as is often the case with consumer protection law, the assistance of a qualified attorney is recommended. Not only can a lemon law lawyer help you navigate any potential pitfalls, they can ensure your claim is handled with the professionalism of a proven legal expert. With their knowledge of applicable state lemon laws, along with their comfort within the legal system, litigation becomes less of a challenging endeavor.
A good lemon law attorney can serve multiple purposes, most notably guiding you through the process from start to finish. As discussed here, the first step involves notifying the manufacturer or dealer, which can sometimes be performed on your own. After this initial notification of the defect, it often becomes necessary that you avail yourself of the assistance of a lemon law attorney. If your manufacturer has not provided you an acceptable solution, this does not necessarily mean your case is not worthy of a legal remedy. It simply signals the first time you will benefit from the experience of a lemon law lawyer.
Lemon law representation is available at no charge, meaning that no out-of-pocket expenses should ever be necessary. In fact, lemon law cases usually reward the prevailing party with their attorney fees, which is just one more reason to enlist the services of an experienced lawyer. This means that you typically incur no risk you might otherwise encounter if pursuing legal action within some other context. A lemon law lawyer will always serve as your strongest advocate, working diligently toward your best possible outcome.
Lemon Law Success Stories
While not all lemon law compensation cases go as planned, there are plenty of examples where consumers successfully receive compensation under lemon laws. Success depends on various factors, including the type of vehicle, the nature of the defect, and the actions taken by the consumer. Below are a handful of examples of lemon law compensation cases and how they were successful. A company called Mission Motorcycles produced an electric motorcycle that could go from 0 to 60 miles per hour in under four seconds. Unfortunately for the owner, the motorcycles had issues with the electronics and would spontaneously shut off. The company repeatedly tried to fix the problem but to no avail. The owner was able to receive a full refund for the motorcycle once she proved to the court that the motorcycle spent more time in the shop for repairs than on the road. A woman bought a new truck with a number of problems, including the seatbelt recoiling instead of extending while she was driving. After visiting the dealership multiple times without a satisfactory resolution, she filed a lemon law claim. The manufacturer of the seatbelt system even sent an investigator to her home to inspect the seatbelt once she filed her claim . She was able to obtain an outright buyback of the vehicle. One of the most infamous cases in the history of lemon law compensation involves a young boy who knew that his 1999 Oldsmobile Cutlass would break down if he drove it because the "CD stupid player" wouldn’t stop vibrating funny. He took it to the dealership once, but it wouldn’t replicate the problem, so he couldn’t get it repaired. The car broke down a few days later, but wasn’t repaired again until after the warranty had expired. He ended up with $1,400 in repairs that were never addressed, but he did get a full refund on the vehicle once he took the manufacturer to court. Another example involves a product that protects a vehicle from the elements of weather. The owner of a Nissan Titan decided to install a Road Armor protection system on the truck but noticed that the system started to rust. When he took the truck back to the dealership, they told him to go to a nearby store to have the issue addressed. Unfortunately, the store’s repair process lasted longer than expected, and the truck broke down while it was being repaired. It ended up costing them $5,000 to have a new engine installed in the vehicle. The owner was able to obtain a buyback when he filed his lemon claim.