The National Highway Traffic Safety Administration (NHTSA) estimates consumers inadvertently purchase 150,000 vehicles each year that contain repeating, unfixable defects. These “lemon” vehicles cost Americans thousands of dollars each year in unforeseen repair costs, alternate transportation fees, towing, out-of-town lodging, and much more. Consumers who lease their vehicles can suffer these problems just as much as those who buy outright or finance their vehicles. Unfortunately, many of these consumers could be out of luck depending on how their state views lemon laws and leases.
The defects that new cars suffer can vary in type and severity. Less severe but no less a defect are painting mistakes, inexplicable rattling noises or strange odors. Severe defects include brake failure, engine problems or transmission issues that could affect the driver’s safety. Whether major or minor, one thing remains the same: the manufacturer has a legal responsibility to make it up to the consumer in one way or another. When the manufacturer fails to uphold their end of their manufacturers written warranty, lemon laws empower consumers and their lemon law attorneys to seek just compensation in court.
Every state in America has some form of lemon law outlining a consumer’s rights when their vehicle fails to conform to its written manufacturer’s warranty. These laws vary from state to state insofar as the time they have to report problems, what problems are covered and other details. What each state law shares is how they protect consumers whose vehicles develop unrepairable, repetitive defects. These defects cause their vehicles to not conform with their warranty, which leads to laws refering to these problems as “noncomformities.”
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Each state lemon law requires a vehicle to undergo unsuccessful repairs a certain number of times within a given time frame to qualify as a lemon. For example, a vehicle in Texas must undergo repairs four times without success. Two of those attempts must occur within a year of the vehicle’s initial delivery or 12,000 miles driven, and the next two must occur within a year or 12,000 miles of the first repair attempt. However, if the problem in question is considered a “serious safety problem,” the number of required attempts falls to two. These requirements change from state to state, so be sure to check with a qualified lemon law attorney before making any major decisions.
The federal Magnuson Moss Warranty Act of 1975 adds an additional layer of protection when state laws fail. The Act protects all American consumers no matter what state in which they reside. The Act requires all companies use easily understood language when writing their warranties and empowers the Federal Trade Commission to enforce said warranties.
States vary in whether their lemon laws protect lessees. Arizona, for example, does not protect lessees under its lemon law. An Arizona Supreme Court decision in 2006 stated the leasing company technically owns the vehicle, effectively renting the vehicle to the end consumer. Therefore, under Arizona state law, the leasing company is protected by the lemon law and not the lessee. Other states, including Texas and New York, do indeed cover leased vehicles with their lemon laws.
The Magnuson-Moss Warranty Act protects consumers who lease their vehicles just as they protect those who buy or finance them. Andrew Ross, lemon law attorney with Allen Stewart P.C., said consumers who lease their vehicles can likely pursue a claim under Magnuson-Moss even if their state law fails them. The most important thing to do, in any case, is to reach out to a qualified and experienced lemon law attorney to see if they can help you with your case.
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Fewer people are leasing their vehicles than ever according to Jim Gorzelany of Forbes. He reported that while leases counted for a third of all automotive transactions as of January 2020, they account for roughly 17 percent of transactions now. Gorzelany said rising vehicle prices and rising interest rates are causing the drop in leasing rates. Many consumers, he said, are opting for longer-term loans to keep monthly payments lower. Another potential cause of dropping leasing rates is supply chain issues: as it gets harder to find new vehicles at dealerships, many consumers are wary of locking themselves into agreements that’ll have them coming back at the end of their lease no matter the condition of the vehicle.
The Texas lemon law requires any vehicle, purchased or leased, meet one of three tests before being considered a “lemon.” These are the “four times test,” the 30 days test, or the serious safety hazard test.
A vehicle passes the four times test if it’s been taken to a dealership for repairs two times for the same problem or defect within the first year or 12,000 miles, whichever comes first, and twice more during the first 12 months or 12,000 miles following the first repair attempt without the problem being fixed.
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A vehicle passes the 30-day test if it has been out of service for repair because of problems covered by the original factory warranty for a total of 30 days or more during the first two years or 24,000 miles of ownership without a comparable loaner vehicle offered, and there were two repair attempts during the first year or 12,000 without any success.
A vehicle passes the serious safety hazard test if the vehicle owner submits the vehicle for repair of a serious safety hazard once during the first 12 months of ownership or 12,000 miles, whichever comes first, and then once more during the 12 months or 12,000 miles following the first repair attempts without the problem being fixed.
Regardless of whether you leased your vehicle, are still making payments or bought your car outright, when your vehicle starts showing problems you should contact your dealership immediately. The next thing you should do is reach out to the lemon law attorneys of Allen Stewart P.C. They have the knowledge and experience needed to take on big car manufacturers on your behalf, and a history of successful claims and happy clients. The sooner you reach out, the better your chances of a successful resolution. Don’t wait; contact Allen Stewart P.C. today.