Understanding Arkansas Lemon Law
Car manufacturers sell on average 150,000 cars per year in the United States classified as lemons: cars with repeated, unfixable problems. Lemons can come from any manufacturer: Chevrolet, Dodge, Ford and almost every other manufacturer has built lemon vehicles over the years. Many of those vehicles are sold in Arkansas.
“Lemon laws” enacted across the United States help protect consumers who purchase defective vehicles and provide a legal procedure to 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 and have an unexpired manufacturer’s warranty.
The Arkansas lemon law, also known as the New Motor Vehicle Quality Assurance Act, provides relief to consumers making one of the largest purchases they will ever make.
The law protects consumers who unknowingly purchase defective vehicles. The law covers consumers who purchase or lease new vehicles, provided the motor vehicle is titled and registered by law. The law further covers any other person entitled to enforce the obligations of the lemon law.
The lemon law covers “nonconformities.” A nonconformity is any specific or generic defect that substantially impairs the use, market value or safety of a vehicle. This by definition renders a vehicle “nonconforming” to the terms of an applicable manufacturer’s express warranty or implied warranty of merchantability.
The Arkansas lemon law does not cover nonconformities that don’t substantially impair the use, value or safety of the vehicle. For example, a radio problem or slight rattle would not be considered nonconformities, while a faulty starter or malfunctioning brake system would be. The lemon law also does not cover any nonconformity the manufacturer can prove was caused by accident, abuse, neglect or unauthorized modification of the vehicle by the consumer.
The Arkansas lemon law establishes a “Motor Vehicle Quality Assurance period.” The MVQA period begins when the vehicle is first delivered to the customer and ends 24 months later or after the first 24,000 miles of operation, whichever is later. The lemon law compels manufacturers to repair all nonconformities reported within this period, even if repairs are made after the period expires.
The lemon law provides manufacturers three attempts to repair any nonconformity reported within the MVQA period, or one attempt for any problem likely to cause death or serious bodily injury. If the manufacturer is thusly unsuccessful, the consumer must notify the manufacturer by certified or registered mail of the need to repair the nonconformity. The manufacturer then has one final try to fix the problem.
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Within 10 days of receiving this notice, the manufacturer must provide the consumer with the opportunity to have the vehicle repaired at a reasonably accessible facility. The repair must be completed within 10 days of the vehicle’s arrival at the facility.
The requirement that the manufacturer be allowed a final attempt does not apply if the manufacturer fails to notify and provide the consumer with the opportunity to have the vehicle fixed at an accessible facility. It also does not apply if the manufacturer fails to perform the repairs within 10 days of the vehicles arrival at said facility.
The Arkansas lemon law provides a rebuttable presumption that the manufacturer was given a reasonable number of repair attempts if certain criteria are met. If the manufacturer is given three opportunities to fix the nonconformity plus one additional attempt and is unsuccessful, the presumption arises. The presumption also counts if a particularly dangerous nonconformity goes unrepaired following one attempt and a final attempt following notification by the consumer. Finally the presumption goes into effect if the vehicle is out of service for a cumulative total of 30 calendar days, or if there have been five total attempts to repair any number of nonconformities.
The presumption of a reasonable number of attempts becomes nonrebuttable if the manufacturer fails to perform the repairs within 10 days after the vehicle is delivered.
The Arkansas lemon law requires manufacturers to provide a written repair order each time the vehicle is brought in for repairs. The order must include reference to each defect, nonconformity or complaint brought to the attention of the manufacturer.
If the manufacturer is unable to repair the nonconformity, they must replace or repurchase the vehicle. A manufacturer repurchasing the vehicle must repay the vehicle’s purchase price, including any net allowance given for a trade in vehicle. The manufacturer must also pay collateral charges including sales taxes, title charges, finance charges, etc. They further must repay incidental charges including charges for towing and the costs of obtaining alternative transportation.
Arkansas’ lemon law allows manufacturers to withhold a reasonable offset for physical damage to the vehicle.
The manufacturer must pay lessors 105% of their purchase costs, minus the total of all deposit and rental payments paid by the consumer leasing the vehicle. The manufacturer must also pay collateral charges, any fee paid to obtain the lease, insurance costs and applicable taxes. The manufacturer must repay deposit and rental payments to consumers who leased the nonconforming vehicle. They further must pay those consumers’ incidental charges, while withholding a reasonable offset for use of and damage to the vehicle.
The Arkansas lemon law requires manufacturers replacing a vehicle to provide one that is identical or reasonably equivalent to the vehicle being replaced. The manufacturer must also pay all collateral and incidental damages. The consumer is responsible for paying a reasonable offset for use of the replaced vehicle. The offset is calculated using the number of miles traveled on the vehicle prior to the first time the consumer delivered it for repair of a nonconformity.
The Arkansas lemon law’s provisions covering refund or replacement don’t apply until the consumer as first resorted to an “informal dispute settlement procedure,” i.e. arbitration. In some instances, arbitration can allow for a faster resolution of conflicts between consumers and manufacturers. Arbitration hearings usually last only one day, and take place in a much less formal setting than a court. Consumers should bring 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.
However, arbitration often ends with an outcome unfavorable to the consumer. The third party arbitrator may award the consumer with additional repair attempts, which doesn’t provide any remedy they didn’t have before. They may also decide to dismiss the claim, siding with the manufacturer. The law makes no mention of the ability to recoup attorney’s fees during arbitration. Fortunately, the federal Magnuson-Moss Warranty Act allows for consumers to sue for attorney’s fees alongside damage awards in court.
The manufacturer must abide by the decision of the arbitrator, while the consumer does not. If dissatisfied with the outcome, a consumer can bring civil action in court. By filing a claim under the Magnuson-Moss Warranty Act, Arkansas 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. Lemonlawusa.org encourages vehicle owners with a lemon to obtain legal counsel. You can bet the car manufacturers have legal counsel at the ready to help defend against lemon law claims both in arbitration and in court.