Understanding Montana 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, Dodge, Ford and almost every other manufacturer has built lemon vehicles over the years. Several of those vehicles are sold in Montana.
“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.
Montana’s lemon law, also known as the New Motor Vehicle Warranty Act, provides relief to consumers who purchase or lease vehicles in the state.
Consumers must use the vehicles for personal, family, or household purposes. The law further protects anyone to whom the vehicle is transferred during the warranty term and anyone else entitled by the warranty’s terms to enforce its obligations.
The Montana lemon law defines a “motor vehicle” as a vehicle propelled by its own power designed primarily to transport persons or property upon public highways. Trucks with gross vehicle weights over 15,000 pounds are excluded from the law’s protections. The nonresidential portions of motorhomes are covered under the law.
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.
The Montana 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 two years following the vehicle’s delivery to the consumer or 18,000 miles of operation, whichever is earlier.
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 Montana 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.
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The Montana lemon law requires manufacturers repurchasing a nonconforming vehicle to pay the full purchase price. The manufacturer must also pay reasonable collateral damages, meaning all applicable taxes and fees. They must also pay reasonable incidental damages, including expenses incurred as a result of the original vehicle’s nonconformity. The manufacturer may withhold a reasonable allowance for use of the vehicle, calculated from the number of miles the vehicle traveled prior to the manufacturer’s acceptance of the vehicle.
Manufacturers replacing a nonconforming vehicle must provide a vehicle of the same model, style and value unless lack of availability makes that impossible. In that case, Montana’s lemon law requires the manufacturer to provide a comparable vehicle.
The consumer must go through a manufacturer’s “informal dispute settlement procedure,” i.e. arbitration, before pursuing repurchase, replacement or other legal remedies. The procedure must be certified by the Montana Department of Justice and comply with Federal Trade Commission laws.
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 Montana 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, Montana 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.