Posts Tagged ‘lemon law compensation’
Lemon Laws for Cars: Compensation and the State and Federal Level
Next to buying a home, buying a vehicle is the most significant purchase that most people make; and just as some homes present a persistent defect that wasn’t apparent when they were purchased, so do some vehicles. Under state and federal lemon laws for cars, these vehicles are considered lemons, and entitle their owners to receive compensation. However, the definition of a lemon vehicle is different at the state level than it is at the federal level, and so is the compensation that consumers receive for owning a lemon vehicle.
Under state lemon laws, a vehicle is considered a lemon if it undergoes a certain number of repair attempts (usually about three) within a certain number of miles (usually less than 18,000) after its original delivery date. Therefore, even if a vehicle is still under warranty, it cannot qualify as a lemon if the repairs do not fall within the state mileage requirements. It is also important to note that most states do not cover alternative vehicles, such as motorcycles, ATVs and boats. If a vehicle qualifies as a lemon under state law, its owner can choose between two forms of compensation: receiving a free replacement vehicle or receiving a refund of the vehicle’s purchase price minus a mileage based allowance.
Under the federal lemon law, a vehicle is considered a lemon if it is still under the manufacturer’s warranty and experiences a defect that cannot be resolved within a reasonable number of repair attempts, regardless of mileage. Unlike most states, the federal lemon law covers alternative vehicles; with the key being that a vehicle qualifies as personal vehicle (e.g. dump trucks are not personal vehicles). When a vehicle qualifies as a lemon under federal law, its owner receives a cash award and can keep the vehicle. Most state lemon laws and the federal lemon law also allow consumers to recover attorney fees if their case is successful, as well as collateral costs associated with a lemon vehicle, such as licensing and registration, towing and rental car fees.
