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How to Make the New York Lemon Law Work for You

by Stephanie M. Galenskas,
assistant editor of Car & Travel Monthly

When life hands you lemons, as the saying goes, you should make lemonade. But that's easier said than done, especially when the lemons are cars with serious defects that have cost you a chunk of change.

Take the case of Charita Thomas, her boyfriend Greg Bligen and their Jeep of trouble. In September, 1998 they purchased a 1999 Jeep Grand Cherokee from a Manhattan dealer. Joy at their new ride quickly fled two days later when the "Check Engine" warning lit up; that light foreshadowed more than four months of frustration.

And danger. The vehicle kept stalling suddenly, posing a dangerous threat on the road. One day it stalled as they were driving uphill in midtown Manhattan in a stream of aggressive traffic. They were able to safely pull over, but got hit with a $55 parking ticket while at a pay phone calling the dealer to give him an earful.

Stalling was only one of the Jeep's sour spots; its steering wheel also tended to freeze up and the windows refused to roll down. Finally, after months of headaches, the couple turned to New York State's New Car Lemon Law.
Charita Thomas is one of more than 21,000 New Yorkers who have applied for lemon law arbitration since the law was enacted on Sept. 1, 1983. According to the law, if a vehicle does not conform to the terms of the warranty and the manufacturer (or its authorized dealer) is unable to repair the vehicle after a reasonable number of attempts during the first 18,000 miles or two years (whichever comes first), the consumer can choose a full refund or a comparable replacement car. Consumers may pursue their case through arbitration or directly sue the manufacturer; they have four years from the vehicle's original delivery date to do so.

"The Club lobbied extensively for these laws, which have succeeded in tipping the scales a bit in favor of consumers," says Dennis J. Crossley, executive vice president, Automobile Club of New York. "Prior to their enactment, the state of the law on motor vehicle purchases, particularly used vehicle purchases, was strictly 'buyer beware.'"

Key Points of the New Car Lemon Law

  • Applies to new motor vehicles purchased, leased or registered in New York State.
  • Protects buyers during either the first two years from the date of purchase or the first 18,000 miles, whichever comes first.
  • A new vehicle is considered a lemon if a defect that "substantially impairs" the value of the vehicle either cannot be repaired after four attempts or is out-of-service for more than 30 days during the warranty period.

    Key Points of the Used Car Lemon Law

  • Purchase price must be $1,500 or more.
  • Does not cover private sales, only used motor vehicles purchased from a New York dealer.
  • Duration of the lemon law warranty depends on the mileage. For example, vehicles with 36,000 to 80,000 miles at the time of purchase are covered for 90 days or 4,000 miles, whichever comes first.
  • A used vehicle is deemed a lemon if a major defect either cannot be repaired after three attempts or keeps the car out-of-service for a total of 15 days.

  • The Proof Is in the Lemon

    We all think we know a lemon when we have driven one. But how do you prove it? Very carefully, with organized documents. "If it's not documented," Thomas says, "it didn't happen."

    To even qualify for arbitration, you must document that your case meets one of two basic requirements: four or more attempts have been made to fix the same problem, or the vehicle has been out of service being repaired for a total of 30 or more days during the first 18,000 miles or two years (whichever comes first). The problem has to substantially impair the value of the car. And if the dealer fixed the problem, you have no case under the lemon law, no matter how much aggravation you have weathered.

    Some of your key evidence will be service receipts provided by the dealer, so you must scrutinize all documents as you receive them. "Service managers have gotten wise," warns Phil Edmonston, author of Lemon-Aid Used Cars 1999, "and will write down the same problem in different words."

    On your service receipt, silence about the specific problem can mean death to your case down the road. After repeated service calls, one day Thomas' dealer-perhaps smelling a lemon-refused to specify the problem on the repair sheet. So, standing in front of the manager, she wrote down the problem herself, also noting the dealer's refusal. This strengthened her case at the hearing. "We always checked the receipt before we left the dealer," says Thomas.

    Relief for Leasees

    If you are among the 43 percent of people in New York State who lease their vehicles, you should know about the state's Auto Leasing Excess Wear and Damage (EWD) Arbitration Program.

    Under lease provisions, most consumers are financially responsible for "excess wear and damage."But what happens if you want to contest the charges? The New York Motor Vehicle Retail Leasing Act gives you the legal right to mount a challenge. Consumers can choose to have their case heard through an approved program offered by the lessor, or through the EWD Arbitration Program.

    For more information on the EWD Arbitration Program, call 800/771-7755 or oag.state.ny.us.

    Most dealers, however, can be expected to cooperate. "It's to a dealer's advantage to satisfy consumers," says Marvin Suskin, owner and president of Scarsdale Ford.

    It is important to keep documents organized and include supportive material. Jay Steingold, a veteran lemon law arbitrator, recommends getting a letter from a certified independent mechanic who can verify the chronic problem.

    This is especially important if the vehicle fails, so to speak, the lemon law taste test. That's when both parties and the arbitrator take the car for a ride. Your case isn't shot if the problem doesn't come up during the drive, but it sure helps when the lemon does make the arbitrator pucker up while he is in the passenger seat.

    The Art of Arbitration

    There is more than one way to arbitrate a lemon. Most major manufacturers, the Greater New York Automobile Dealers Association, the Better Business Bureau and the State Attorney General's office all offer arbitration programs. Which should you choose?

    Steingold recommends the state-run program, which is administered by an independent agency that has "no axes to grind." It is binding on both parties, however, whereas the manufacturers' programs are binding only on them.

    Do you need a lawyer to win your case?
    Thomas won a refund for her Jeep without benefit of an attorney. "I got to the point where I was so angry," she says of her arbitration, "that I didn't feel intimidated."

    "Study the law, prepare your case and you have a good shot," advises Steingold, who has been hearing these cases since 1991. "The program has been designed so that consumers don't need to hire an attorney," says Peter Frieary, manager of the New York State Lemon Law Arbitration Program.

    But what about the other guy? Will you be coming unarmed to a knife fight? Probably not. Most manufacturers send field reps, not attorneys, to the hearings. General Motors is one of the few major manufacturers that employ counsel to handle their lemon law cases. Even one of the attorneys who represents GM, Keith
    Rose, speaks up for the little guy: "If a consumer has a valid claim, they will win their case."

    If you hire a lawyer, that's on you; an arbitrator does not award attorney's fees. Dorothea and Gary Pulsifer of East Greenbush, N.Y., learned this the hard way. Their motor home had 59 things wrong with it. (Note to Paul Simon: Is there a song in this? "Fifty-nine Reasons to Leave Your Motor Home"?) They hired a lawyer, and though the arbitrator awarded them $189,000, they still lost $20,000 due to attorney and mechanic fees, time out from work and lost interest on their deposit and loan.

    If you feel more comfortable with a lawyer, you can also go to court, using either the lemon law or the Federal Magnuson-Moss Warranty Act, which covers any product with a written warranty. According to the act, the warrantor must provide a refund or replacement if a product has a defect that cannot be fixed after a reasonable number of attempts.

    The federal act has its drawbacks: The process is longer and the application of the law is more uncertain. However, consumers who aren't eligible for lemon law arbitration can pursue a suit using Magnuson-Moss-and possibly recover attorney's fees.

    Consumer Resources

    New York State Attorney General's Office -This is the place to start your case. Call the Lemon Law Hotline 800/771-7755, or visit www.oag.state.ny.us. You can also contact one of its 14 regional offices. Arbitration hearings are held in mediation centers in every borough.

    New York Better Business Bureau-The Bureau's AUTO LINE is a free program that can be used to arbitrate lemon law cases involving certain manufacturers. Decisions are only binding on the manufacturer. Call 800/955-5100 or visit them online at bbb.org.

    Carfax Vehicle History Service-Carfax reports can tell you whether your car has been classified as a lemon by using the Vehicle Identification Number. Club members can order complete Carfax reports for $15.95 ($29.50 for non-members) by calling 888/801-2202.

    autopedia.com's Lemon Law hot link - Winner of Yahoo Internet Life's 4 Star Award, this site provides information on lemon laws for all 50 states, the Magnuson-Moss Warranty Act, various arbitration programs and lemon lawyers.

    Used and Abused

    The N.Y. Used Car Lemon Law has been in effect since Nov. 1, 1984. The state lowers the bar for the previously owned: The problem has to be subject to repairs three or more times or the car has to be out of service because of malfunction for a total of 15 days during the first 18,000 miles or two years (whichever comes first).

    In 1999, the Attorney General's office received 545 applications for used car arbitration; only 171 were accepted. Many applications (48 percent) were rejected because the vehicles were not repaired at least three times. Other reasons include incomplete information (15 percent), claim was filed too late (10 percent) and no documents (7 percent).

    Spencer Silver of Huntington was one of those 171 applicants who were accepted. His trouble started when he decided to buy a big vehicle (he's 6 feet 7 inches). When he saw a used 1995 Ford Bronco at a local dealer he knew it was meant to be.

    "What I found out," Silver says, "was that it was meant to teach me a lesson." From day one, the Bronco chattered and thumped. After it had spent 20 of its first 46 days in the shop, Silver went online to research the used car lemon law. He eventually went through the state-run arbitration and recovered his money. "The whole process went very smoothly," says Silver.

    "These laws are for the consumer," says Steingold. "Don't be afraid of them." He offers an ultimate example of the consumer's hopes of receiving a fair hearing. "I found in favor of a man who looked like the guy who stole my girl in high school," Steingold says with a laugh.

    Don't fear the lemon law, and expect a fair arbitrator, but don't assume that victory will be yours. Out of the 337 decisions in cases concerning new vehicles issued in 1999, 190 (56 percent) favored the consumer. So the odds are in your favor, but not by much.

    Even if you win, be prepared to deal with a sense of loss. Discovering that you have driven home a lemon can ruin your trust. "My husband's retirement dream turned into a nightmare," Dorothea Pulsifer says of their jalopy motor home. The lemon law returned most of their financial investment, but their emotional investment is not so easily recouped.

    And although Charita Thomas was awarded a refund for her junker Jeep, she does not sound victorious. "I've been hesitant to buy another car," she admits. "I wouldn't want to go through the experience again."

    So, even as you focus on winning your case, remember that money may not be the only thing you lose on your lemon. But money, or a car that actually runs, is all that the law is able to return to you.

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