Understanding New Mexico 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: Chevrolet, Honda, 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.
New Mexico’s lemon law covers passenger vehicles including cars, pickup trucks, motorcycles and vans.
The vehicles must be sold and registered in the state and normally used for personal, family or household purposes. The vehicles must also have a gross vehicle weight of less than 10,000 pounds.
The lemon law prohibits used vehicle dealers in New Mexico from excluding, modifying, or disclaiming the implied warranty of merchantability before the earlier of 15 days or 500 miles after the vehicle’s delivery. A dealer who does so renders the purchase agreement voidable. The maximum liability of a seller is limited to the purchase price paid for the vehicle, to be refunded to the consumer in exchange for that vehicle’s return. That liability limit is removed if the seller knew about the defect prior to sale and did not disclose that to the consumer.
The New Mexico lemon law covers consumers who purchase new or used vehicles used for personal, family or household purposes. The lemon law further covers anyone to whom the vehicle is transferred during the express warranty period, along with anyone else entitled to enforce the warranty’s terms. The lemon law does not cover consumers who lease vehicles.
New Mexico’s lemon law covers defects and conditions that substantially impairs the use and market value of the vehicle to the consumer. The law refers to such issues as “nonconformities.” The law does not cover any nonconformity caused by abuse, neglect, or unauthorized modifications of the vehicle by the consumer.
The New Mexico lemon law compels manufacturers to repair any and all nonconformities reported to the manufacturer within the warranty term or one year following the vehicle’s delivery, whichever comes first. If the manufacturer cannot bring the vehicle into conformity after a reasonable number of attempts,” they must repurchase or replace the vehicle.
The lemon law defines a reasonable number of attempts as four or more times for the same problem without success, or if the vehicle is in the shop for 30 business days or more without successfully repairing the problem. If the manufacturer is unable to successfully repair the vehicle, they must either repurchase or replace it.
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The New Mexico lemon law requires manufacturers repurchasing the vehicle to repay the full purchase price of the vehicle. The manufacturer must also pay all collateral charges, including all taxes, license, titles and registration fees. The manufacturer may withhold a reasonable allowance for the consumer’s use of the vehicle, calculated from the consumer’s use of the vehicle prior to the first report of nonconformity.
A manufacturer replacing a nonconforming vehicle must provide an identical or reasonably equivalent vehicle. The consumer is responsible for paying a reasonable allowance for use.
New Mexico’s lemon law requires consumers to go through a manufacturer’s “informal dispute settlement procedure,” i.e. arbitration, if the manufacturer has established such a procedure. The lemon law’s provisions concerning repurchase or replacement don’t apply until the consumer has first resorted to 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 New Mexico 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, New Mexico 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.