Understanding Kentucky Lemon Law
Roughly 150,000 cars sold in America every year are classified as lemons: cars with repeated, unfixable problems. Lemons can come from any manufacturer: Honda, Chrysler, Chevrolet 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.
Kentucky’s lemon law protects Kentuckians who buy or contract to buy new vehicles in the state. The lemon law also covers state residents who lease a new vehicle in Kentucky after July 15, 1998. The lemon law does not cover subsequent purchasers or lessees.
The Kentucky lemon law applies to vehicles intended primarily for use on public highways that are also required to be registered or licensed in Kentucky. The vehicles covered must be new, completely assembled and sold by a manufacturer, factory branch, distributor, wholesaler or authorized dealer.
Kentucky’s lemon law does not cover motorhomes, motorcycles, mopeds, vehicles with more than two axles, farm machinery or vehicles substantially altered after the initial sale from dealer to an individual.
The lemon law covers vehicle “nonconformities,” which it defines as conditions or defects that substantially impairs the vehicle’s use, value or safety. The lemon law does not cover nonconformities caused as a result of abuse, neglect, or unauthorized modifications or alterations by the consumer.
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Consumers must report problems or defects in writing to the manufacturer to use Kentucky’s lemon law provisions. If the consumer does so within one year of receiving the vehicle or within the first 12,000 miles of operation, the manufacturer must fix the nonconformity.
Kentucky’s lemon law presumes the manufacturer has been allowed a “reasonable number of repair attempts” to fix the nonconformity. The law defines this number as four or more repair attempts by the manufacturer or their authorized agents. 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 Kentucky lemon law requires manufacturers to pay the full purchase price paid for the vehicle when repurchasing. They must also repay finance charges, applicable taxes, fees and governmental charges. Manufacturers may withhold a reasonable allowance for use of the vehicle, calculated from the amount the consumer used the vehicle when it was not out of service due to the nonconformity.
When replacing a vehicle under the Kentucky lemon law, the manufacturer must provide a comparable motor vehicle. The reasonable allowance for use does not apply to a replacement vehicle.
The Kentucky lemon law compels consumers seeking judicial relief to first pursue resolution through informal dispute resolution, i.e. arbitration. Any vehicle falling within the lemon law’s definition of motor vehicle is covered by the dispute resolution provisions.
Any manufacturer doing business in Kentucky must offer to consumers a comprehensive informal dispute resolution system that accepts warranty disputes occurring during the earlier of the first two years or 25,000 miles of the consumer’s or lessor’s ownership of the motor vehicle.
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 Kentucky 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 be ready for inspection and test drive at the hearing.
Kentucky 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, Kentucky 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 may have to pay the claimants’ reasonable attorneys’ fees if the claimant prevails against the manufacturer.