Understanding Alabama Lemon Law
Auto manufacturers sell 150,000 cars in America every year classified as lemons: cars with repeated, unfixable problems. Lemons can come from any manufacturer: Honda, Chevrolet, Ford and every other manufacturer has built lemon vehicles over the years.
“Lemon laws” enacted across the United States help protect consumers who purchase defective vehicles and compensate them for their losses. Additionally, a powerful federal law known as the Magnuson-Moss Warranty Act provides protection for consumers who purchase cars that are having problems under the manufacturer’s warranty. Some lemons may eventually be recalled by the manufacturer, if the problems are systemic.
Alabama’s lemon law protects consumers falling into one of two categories: purchasers of a new or previously untitled vehicle used in substantial part for personal or household purposes, or any other person entitled to enforce the vehicle’s warranty.
Alabama’s lemon law does not cover consumers who lease vehicles.
The lemon law covers vehicles intended primarily for use and operation on public highways. The law covers used vehicles as well. Alabama’s lemon law does not cover motorhomes or any vehicle with a gross vehicle weight rating of 5 tons or more.
The Alabama lemon law covers nonconforming conditions. The law defines a “nonconforming condition” as a vehicle condition that significantly impairs the use, value or safety of a vehicle. It must also occur in the course of the ordinary use of the vehicle, and not occur as a result of abuse, neglect, modification or alteration of the vehicle not authorized by the manufacturer. The nonconforming condition must also not occur as a result of any accident or other damage to the vehicle happening after the delivery of the vehicle to the consumer.
The lemon law requires the manufacturer to repair the nonconforming vehicle so it conforms to the vehicle’s warranty. The consumer must deliver the vehicle to the manufacturer or its authorized agent and give the manufacturer notice of the nonconforming condition during the lemon law coverage period.
Alabama’s lemon law defines the “lemon law coverage period” as one year after the date of the vehicle’s original delivery to a consumer or the first 12,000 miles of operation, whichever comes first.
The Alabama lemon law allows manufacturers a “reasonable attempt to repair” the nonconformity before the law’s provisions for repurchase or replacement take effect. The law defines a “reasonable attempt to repair” as three attempts to fix the same problem without success.
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After this, if the nonconformity remains, or if the vehicle is out of service for more than 30 working days, the manufacturer must repurchase or replace the vehicle.
Before pursuing a claim in civil court, the consumer must give notice of a nonconforming condition by certified mail to the manufacturer and demand repair of the condition. If the consumer has already allowed three or more previous attempts, the manufacturer is given a final opportunity to fix the problem. Within seven calendar days of receiving the certified notice, the manufacturer must notify the consumer of a reasonably accessible repair facility. After the consumer delivers the vehicle to said facility, the manufacturer has 14 calendar days to fix the problem.
A manufacturer repurchasing a vehicle per the strictures of the Alabama lemon law must pay the vehicle’s full contract price. This includes charges for undercoating, dealer preparation and transportation charges. They must also pay the nonrefundable portions of extended warranties and service contracts. The manufacturer must further pay all collateral charges, including sales tax, license and registration fees, and similar government charges. Additionally, they must pay all finance charges incurred by the consumer after the first report of the nonconforming condition, and any incidental damages including reasonable costs for alternative transportation.
The Alabama lemon law says the manufacturer can withhold a reasonable allowance for the consumer’s use of the vehicle, calculated from the number of miles traveled before the first report of a nonconforming condition.
When replacing a vehicle under the Alabama lemon law, the manufacturer must provide a new vehicle that is comparable to the vehicle that is being replaced. The reasonable allowance for use does not apply to a replacement.
Alabama’s lemon law requires consumers to resort first to a manufacturer’s informal dispute settlement procedure, i.e. arbitration, before seeking to file a lemon law claim in civil court.
In an arbitration, a neutral third party (the arbitrator) decides whether a reasonable number of repair attempts have been made and what award, if any, should be granted to the consumer. If the consumer accepts the arbitrator’s decision, the manufacturer agrees to comply with it. A manufacturer’s arbitration process must comply with the Code of Federal Regulations.
There are downsides to the arbitration process. Firstly, attorneys are not required for either side in arbitration. However, the manufacturer will certainly either send an attorney or someone advised by an attorney. Consumers can bring legal representation, though legal fees may not be awarded by the arbitrator unless the manufacturer has chosen to include them as an award in their arbitration application. Any consumer looking to pursue the arbitration process in Alabama is advised to speak with a law firm beforehand.
Arbitration programs allegedly assist both consumer and manufacturer in collecting evidence to be presented from each side, so that it may be shared with both sides prior to the hearing. Unfortunately, in arbitration both sides have fewer rights to discovery: the legal process by which litigants can obtain evidence. In a lemon law case this puts consumers at a disadvantage, as they need discovery to gather evidence to prove their cases, and much of the evidence is held by the manufacturer and dealership.
Before the arbitration begins, the owner should collect all documents relating to the vehicle and the repair process, including the letters exchanged with the manufacturer. They should also arrange for witnesses to appear at the hearing, including friends who have witnessed the vehicle’s problems. The vehicle in question should also be ready for inspection and test drive at the hearing.
Alabama consumers with warrantied vehicle problems would be well served to contact a law firm for a consultation on what their next step should be, whether it be going through with arbitration or proceeding to trial. In court, consumers are guaranteed the ability to gather evidence under the state’s civil discovery rules, and to be represented by a qualified lawyer who can guide them through the often complex legal process.
By pursuing a claim under the Magnuson-Moss Warranty Act, Alabama consumers can hire lawyers who will represent them without the vehicle owner having to pay any attorneys’ fees directly out of their pocket. This is because the federal Act provides that the vehicle manufacturer shall pay the claimants’ reasonable attorneys’ fees if the claimant prevails against the manufacturer.