Understanding North Carolina Lemon Law

American car dealerships sell roughly 150,000 cars each year 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.

“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.

North Carolina’s lemon law protects purchasers and lessees of motor vehicles, and anyone else entitled by the vehicle’s warranty terms to enforce its obligations.

The lemon law covers any new motor vehicle or new motorcycle sold or leased in the state of North Carolina. The law does not cover used vehicles, mopeds, house trailers, or any motor vehicle purchased or leased before October 1, 2005 with a gross vehicle weight of 10,000 pounds or more. The law further does not cover any vehicle purchased or leased after October 1, 2005 weighing more than 10,000 pounds.

North Carolina’s lemon law covers any “nonconformity” of the vehicle. The law defines a nonconformity as any defect or condition that substantially impairs the use and value of the motor vehicle to the consumer. A manufacturer does not have to repair any nonconformity caused by abuse, neglect, odometer tampering, or unauthorized modifications or alterations by the consumer.

The manufacturer must repair any nonconformity if the consumer reports it within the period of the written warranty, or within the “eligibility period.” The law defines the eligibility period as one year following the date of the vehicle’s original delivery to the consumer or during the warranty period, whichever ends sooner.

North Carolina’s lemon law compels manufacturers to replace or repurchase a nonconforming vehicle if they are unable to repair it after a reasonable number of attempts. The law defines “reasonable number of attempts” as four or more repair attempts for the same condition without success. After this, if the nonconformity remains, or if the vehicle is out of service for more than 20 business days, the manufacturer must repurchase or replace the vehicle.

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The North Carolina lemon law requires manufacturers, when repurchasing a nonconforming vehicle, to repay the full purchase price. They must also pay all taxes, license, registration fees and similar governmental fees. The manufacturer may withhold a reasonable allowance for use.

The lemon law requires manufacturers replacing a nonconforming vehicle to provide a vehicle of a new model acceptable to the consumer. The allowance for a reasonable amount of use does not apply to a replacement.

If the manufacturer has established or participates in an “informal dispute settlement procedure,” i.e. arbitration, the consumer must resort to it first before pursuing a claim in civil court. The North Carolina lemon law says consumers who do not are ineligible for the law’s provisions regarding repurchase or replacement.

In some instances, arbitration can allow for a faster resolution of conflicts between consumers and manufacturers. Arbitration hearings usually last only one day, and take place in a much less formal setting than a court. Consumers should bring 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.

However, arbitration often ends with an outcome unfavorable to the consumer. The third party arbitrator may award the consumer with additional repair attempts, which doesn’t provide any remedy they didn’t have before. They may also decide to dismiss the claim, siding with the manufacturer. The law makes no mention of the ability to recoup attorney’s fees during arbitration. Fortunately, the federal Magnuson-Moss Warranty Act allows for consumers to sue for attorney’s fees alongside damage awards in court.

The manufacturer must abide by the decision of the arbitrator, while the consumer does not. If dissatisfied with the outcome, a consumer can bring action in the civil court system. By filing a claim under the Magnuson-Moss Warranty Act, North Carolina consumers can hire lawyers who will represent them without the vehicle owner having to pay any attorneys’ fees directly out of their pocket. The 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. Shouldn’t you have competent legal counsel in your corner?

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