Understanding Delaware 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: Toyota, Dodge, Ford and almost 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.
Delaware’s lemon law protects buyers of vehicles for purposes other than resale.
The lemon law also covers anyone to whom the vehicle is transferred during the terms of the vehicle’s express warranty, and anyone else entitled by the warranty to enforce its obligations.
The Delaware lemon law covers new passenger vehicles bought or leased in the state. The lemon law does not cover motorcycles or the living quarters parts of motor homes. The law does not cover used vehicles of any type.
Delaware’s lemon law covers any defect or condition that substantially impairs the use and value, or safety of the motor vehicle to the consumer. The lemon law defines these issues as “nonconformities.” Delaware’s lemon law does not cover nonconformities resulting from abuse, neglect or unauthorized modifications or alterations by the purchaser.
The Delaware lemon law compels manufacturers to repair eligible nonconformities as long as the consumer reports the problem within the term of the warranty or within a period of one year after the vehicle’s delivery to the consumer, whichever is earlier. Once notified, the manufacturer must make the necessary repairs within a reasonable amount of time.
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The consumer must allow the manufacturer a reasonable number of repair attempts to bring the vehicle into compliance with the warranty. The lemon law defines a “reasonable number of attempts” as four attempts to fix the same problem without success. After this, if the nonconformity remains, or if the vehicle is out of service for more than 30 calendar days, the manufacturer must repurchase or replace the vehicle.
The Delaware lemon law requires manufacturers to repay the full purchase price when repurchasing a vehicle, including credit for any trade-in vehicles. They must also repay any related purchase costs, including sales taxes, registration fees and dealer preparation fees. The manufacturer may withhold a reasonable allowance for use, calculated using the number of miles driven before the first report of nonconformity.
Delaware’s lemon law compels manufacturers replacing a vehicle to provide a new vehicle comparable to the one being replaced. They must also reimburse the consumer for any incidental costs, including dealer preparation fees, registration fees, sales taxes or other charges. The reasonable allowance for use provision does not apply in cases of replacement.
If the manufacturer has established an informal dispute settlement procedure, i.e. arbitration, the consumer must first resort to it before pursuing repurchase or replacement. The procedure must be certified or approved by the Delaware Division of Consumer Protection.
In an arbitration, a neutral third party (an 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 Delaware 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.
Delaware 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, Delaware 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.