Understanding Tennessee 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: Chevrolet, Chrysler, 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.
Tennessee’s lemon law covers passenger motor vehicles and motorcycles sold in Tennessee that are subject to registration and title in Tennessee or any other state. The lemon law does not cover motorhomes used as a dwelling, living abode or sleeping place. The law also does not cover garden tractors, recreational or off-road vehicles or vehicles weighing over 5 tons.
The Tennessee lemon law extends coverage to purchasers and consumers leasing motor vehicles. The lemon law also covers anyone to whom the motor vehicle is transferred during the duration of the vehicle’s warranty.
The state’s lemon law covers any vehicle “nonconformity,” which it defines as a “defect or condition that substantially impairs the vehicle. The lemon law defines “substantially impair” as to render the vehicle unreliable or unsafe for normal operation, or to reduce its resale market value below the average resale value for comparable unimpaired vehicles.
The Tennessee lemon law does not cover nonconformities that do not substantially impair the vehicle, such as a radio issue or slight rattle. It also doesn’t cover any defect or condition caused by abuse, neglect, or unauthorized modifications or alterations by the consumer.
The lemon law compels manufacturers to repair a vehicle that does not conform to all applicable express warranties. The consumer must report the nonconformity to the manufacturer within the warranty term or one year following the vehicle’s original delivery to the consumer, whichever comes first.
If the manufacturer can’t successfully repair the nonconformity, the Tennessee lemon law mandates they must replace or repurchase the vehicle. However, the law also says the manufacturer must be allowed a “reasonable number of attempts” to repair.
The Tennessee lemon law defines “reasonable number of attempts” as three or more attempts for the same problem without success. The lemon law also defines reasonable attempts to mean it is unreasonable for a car to be in service repair for 30 business days or more.
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The Tennessee lemon law says a manufacturer repurchasing an owned vehicle must pay the vehicle’s full purchase price. They must also reimburse the consumer for collateral charges, including sales taxes, registration fees and finance charges. The manufacture may withhold a “reasonable allowance for use” depending on how many miles the vehicle was driven before its nonconformity was first reported.
A manufacturer repurchasing a leased vehicle must pay the lessee the aggregate deposit and rental payments previous payed to the lessor, minus applicable service fees.
The Tennessee lemon law requires manufacturers replacing a nonconforming vehicle to provide a “comparable motor vehicle.” The law defines a comparable motor vehicle as one of comparable worth to the same make and model with all options and accessories, with appropriate adjustments for any model year differences.
The Tennessee lemon law’s provisions covering refund or replacement don’t apply until the consumer as first resorted to an “informal dispute settlement procedure,” i.e. arbitration. 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 civil action in court. By filing a claim under the Magnuson-Moss Warranty Act, Tennessee 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.