Understanding Maryland 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, Chrysler, Ford and almost every other manufacturer has built lemon vehicles over the years. Many of those vehicles are sold in Maryland.
“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 Maryland lemon law provides relief to consumers making one of the largest purchases they will ever make: cars.
The law protects consumers who unknowingly purchase defective vehicles. The law covers vehicles registered in Maryland as a passenger vehicle, motorcycle, truck with a ¾ ton or less manufacturer’s rated capacity or “multipurpose vehicle.” Maryland law defines multipurpose vehicle as any vehicle designed for carrying persons which is constructed on a truck chassis or with special features for occasional off-road operation. Three wheeled vehicles also fall under this designation, as do other vehicles of unique design that fall under no other definition.
The Maryland lemon law covers new and used vehicles, but not motor homes or vehicles part of a fleet purchase or lease of five or more vehicles.
Maryland’s lemon law covers vehicle purchasers and those leasing vehicles. The law also covers anyone to whom a new motor vehicle is transferred during the duration of the vehicle’s warranty. It further covers anyone else entitled to enforce the warranty.
The Maryland lemon law defines the “warranty period” as the earlier of the vehicle’s first 18,000 miles of operation, or 24 months after the vehicle’s original delivery to the consumer.
The lemon law covers “nonconformities.” A nonconformity is defined as any defect or condition that substantially impairs the use and market value of the vehicle. The law does not cover any problem arising from abuse, neglect, or unauthorized modifications to the vehicle.
Think you have a lemon, click here to fill out a 60 second form.
The consumer must report any and all nonconformities to the manufacturer during the warranty period. They must do so via written notice sent by certified mail to the manufacturer, factory branch or lessor. The consumer must allow the manufacturer to attempt to repair the problem, and the manufacturer must do so at no charge to the consumer. The manufacturer has 30 days within receipt of the consumer’s written notification to fix the problem.
Maryland’s lemon law allows manufacturers a “reasonable number of repair attempts” to fix the nonconformity. The lemon law defines a reasonable number as four or more times for the same problem without success. 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. The lemon law also says a manufacturer has only one attempt to repair a problem with the vehicle’s brakes or steering before they must repurchase or replace the vehicle.
If the manufacturer is unable to repair the nonconformity, the Maryland lemon law requires them to repurchase or replace the vehicle. The manufacturer must repay the full purchase price, as well as all license and registration fees. The manufacturer can withhold a reasonable allowance for use not to exceed 15% of the purchase price. The manufacturer can also withhold an allowance for damage not attributable to normal wear and not including damage resulting from a nonconformity.
When replacing a vehicle under the Maryland lemon law, the manufacturer must provide a comparable vehicle acceptable to the consumer. Maryland’s Motor Vehicle Administration will allow a credit to the consumer against the excise tax imposed for the replacement vehicle in the amount of the excise taxes originally paid for the returned vehicle.
Maryland’s lemon law does not require a consumer to first seek “informal dispute settlement,” i.e. arbitration, before pursuing a lemon law claim. A consumer who has resorted to arbitration does not give up their right to seek remedies available by law.
A manufacturer may attempt to persuade you to go into arbitration. 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.
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. Any consumer looking to pursue the arbitration process in Maryland 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.
By pursuing a claim under the Magnuson-Moss Warranty Act, Maryland 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.