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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, Nissan, 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.
The New Jersey lemon law covers passenger automobiles and motorcycles purchased, leased or registered in New Jersey. The lemon law covers used vehicles, but does not cover the living facilities of motor homes. The New Jersey lemon law does not cover vehicles with commercial registrations.
New Jersey’s lemon law protects consumers who buy or lease vehicles other than for the purposes of resale or sublease. The law further protects anyone to whom the vehicle is transferred during the duration of the vehicles warranty, and any other person entitled by the terms of the warranty to enforce its obligations.
The New Jersey lemon law covers “nonconformities,” defined as any defect or condition that substantially impairs the use, value or safety of a motor vehicle. The law does not, however, cover nonconformities as a result of abuse, neglect, or unauthorized modifications by the consumer.
The lemon law states a consumer must report a nonconformity to the manufacturer within two years following the original delivery of the vehicle or the first 18,000 miles of operation, whichever is sooner. The manufacturer must then make necessary repairs to conform the vehicle to its warranty. For vehicles purchased or leased on or after October 1, 2009, the consumer must report the nonconformity during the first 24,000 miles of operation or during the period of two years following the date of the motor vehicle’s original delivery to the consumer, whichever is earlier.
The manufacturer must replace or repurchase the nonconforming vehicle if they are unable fix the problem after a reasonable number of attempts. The New Jersey lemon law defines “reasonable number of attempts” as three or more attempts for the same nonconformity, without success. After that, or if the vehicle is out of service for a cumulative total of 20 calendar days, the manufacturer must repurchase or replace the vehicle.
A different standard applies for vehicles purchased or leased on or after October 1, 2009. The manufacturer has three or more attempts to repair the same nonconformity, or one attempt if the nonconformity threatens the life and well-being of the occupant. After that, or if the vehicle is out of service for a cumulative total of 45 calendar days, the manufacturer must repurchase or replace the vehicle.
Manufacturers must repurchase or replace the nonconforming vehicle if they are unable to fix the problem after a reasonable number of attempts. The New Jersey lemon law requires the manufacturer to repay the purchase price of the original motor vehicle, included any stated credits or allowances. The manufacturer must also pay for any options or modifications made by the dealer within 30 days after the date of original delivery. They must also pay any other charges or fees, finance charges, reimbursement for towing and other related expenses. The manufacturer may withhold a reasonable allowance for vehicle use.
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When replacing a vehicle under the New Jersey lemon law, the manufacturer must ensure that any lien on the returned motor vehicle is transferred to the replacement vehicle. The reasonable allowance for use does not apply to a replacement.
New Jersey’s lemon law requires consumers to first resort to a manufacturer’s “informal dispute settlement procedure,” if they have one. Informal dispute settlement procedures are commonly known as “arbitration.” The lemon law’s provisions requiring repurchase or replacement do not apply to consumers who do not first resort to 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, New Jersey 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.