Understanding Michigan 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: Toyota, Chrysler, Ford and almost every other manufacturer has built lemon vehicles over the years. Many of those vehicles are sold in Michigan.
“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 Michigan 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 any motor vehicle designated as a passenger vehicle, including SUVs, pickup trucks, and vans. Michigan’s lemon law does not cover buses, semi trucks, and motor homes.
Michigan’s lemon law defines a “new motor vehicle” as one purchased or leased in Michigan or by a resident of Michigan, and is covered by a manufacturer’s express warranty at the time of purchase or lease. The lemon law also covers used motor vehicles transferred during the manufacturer’s express warranty period.
The Michigan lemon law covers consumers who buy or lease a new vehicle for personal, family or household use and not for the purpose of selling or leasing it to someone else. It covers people who buy or lease less than 10 vehicles a year. If they purchase 10 or more vehicles a year, the vehicles must not be used for business purchases. The person must be entitled to enforce the provisions of an express warranty pursuant to the terms of that warranty.
The lemon law covers any defect or condition that impairs the use or value of the new motor vehicle to the consumer. It also covers any problem that keeps the vehicle from conforming to the manufacturer’s express warranty. The law does not, however, cover any problem as a result of modifications made to the vehicle by someone other than the manufacturer. It also does not cover defects or conditions caused by abuse, neglect, or an accident occurring after the new vehicle’s purchase or lease.
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The lemon law compels manufacturers to repair any defect or condition impairing the use or value of the vehicle to the consumer. Manufacturers must repair the vehicle if the consumer reports the defect or condition to the manufacturer within the warranty period or one year following the vehicle’s delivery to the consumer.
If the manufacturer can’t repair the problem, the law requires them to repurchase or replace the vehicle. Before the manufacturer does so, however, the vehicle in question must be subjected to a “reasonable number of repair attempts.” The Michigan lemon law defines that as four or more times for the same problem without success, or if the vehicle is in the shop for 30 days or more without successfully repairing the problem.
Before a consumer can take any further action, they must notify the manufacturer and allow them one final attempt to fix the problem. The notice must be sent in writing by the consumer or their representative any time after the third attempt to fix the same problem, or after the vehicle has been out of service for at least 25 days.
After receiving the notice, the manufacturer must notify the consumer as soon as possible of a reasonably accessible repair facility. The manufacturer then has five business days to fix the problem after receiving the vehicle from the consumer.
The consumer must go through a manufacturer’s “informal dispute settlement procedure,” i.e. arbitration, before pursuing further legal options. The Michigan lemon law requires a manufacturer’s arbitration process to comply with the Magnuson-Moss Warranty Act and requires the manufacturer to be bound by any decision reached by the arbitrator. It must also provide that the consumer isn’t obligated to accept the decision, and requires the manufacturer to implement the final settlement no more than 30 days after the settlement is reached.
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 Michigan 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, Michigan 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.