The motor vehicle of today is an expensive and complicated device. Most Alaskans have become dependent on the availability of a motor vehicle to conduct their daily affairs. Unfortunately, some new cars prove less than dependable. They turn out to be lemons. When this happens, the consumer is faced with a problem that is not easily resolved. The Legislature, recognizing the dilemma faced by many new car buyers, enacted a law which has commonly become known as the "Lemon Law".
WHAT ARE THE BENEFITS OF THE LAW?
- The Lemon Law (AS 45.45.300) provides protection to buyers to new motor vehicles. If a new vehicle turns out to be defective and has not been properly repaired after a reasonable number of attempts, the law requires a refund or replacement vehicle.
- Only a small percentage of new vehicles will be declared lemons. However, all new vehicle buyers will benefit from this law. The manufacturer and the dealer now have a stronger economic incentive to deliver the vehicle free from defects, and if problems develop, to correct them quickly and accurately.
- The law encourages the vehicle manufacturers to establish third party arbitration programs. These programs must meet specific standards and must have the approval of the Attorney General. Any decisions ordered by the arbitration’s are binding on the manufacturer but not on the consumer.
- This law spells out clearly the owner’s, dealer’s and manufacturer’s responsibilities. It does not limit other rights and remedies that may be available to the owner of a motor vehicle under other provisions of law.
WHAT ARE THE MANUFACTURER’S RESPONSIBILITIES?
- If an owner of a new motor vehicle reports a defect or problem, the manufacturer normally, through its dealer or repairing agent, makes the necessary repairs.
- If the manufacturer, dealer, or repairing agent has been unable to repair the defect or problem after a reasonable number of attempts, the manufacturer shall, at the owner’s option, replace the vehicle or give a refund.
- When a manufacturer refunds or replaces a motor vehicle, it is also required to refund any reasonable charges the owner may have paid in shipping the defective motor vehicle back and forth to the nearest authorized facility for repairs.
- A manufacturer shall ship its dealer or repairing agent parts necessary for warranty repairs by the fastest means available (generally air freight) with no additional charge for freight or handling.
HOW DOES THE LEMON LAW DEFINE A REASONABLE NUMBER OF ATTEMPTS?
- First, for a single defect or condition that defies repairs, the Lemon Law says:
"(1) The same nonconformity has been subject to repair three or more times by the manufacturer, distributor, dealer or repairing agent during the term of the express warranty or the one-year period after delivery of the motor vehicle to the original owner, whichever period terminates first, but the nonconformity continues to exist;"
- Second, for a motor vehicle that has been out of service for an unreasonable period of time due to a single or multiple defects, the Lemon Law says:
"(2) The vehicle is out of service for repair for a total of 30 or more business days during the express warranty term or the one-year period referred to in (1) of this section, whichever period terminates first;".WHAT ARE THE HITCHES?
- The defect or problem must substantially impair the use or the market value of the vehicle.
- The defect or problem must not be the result of alteration, abuse or neglect by the owner or a person other than the dealer or repairing agent.
- Any period of time that repairs are not performed for reasons that are beyond the control of the manufacturer, dealer or repairing agent is excluded from the 30-day period. This refers to situations such as labor disputes or natural disasters.
- The owner must provide written notice via certified mail to the manufacturer and its dealer or repairing agent. Within 30 days after receiving the notice, the manufacturer may make another final attempt to repair the vehicle.
- If you choose a refund over a replacement, the refund will not include any accrued finance charges. The manufacturer may also deduct an allowance for your use of the vehicle and for excess depreciation due to damage, neglect or abuse.
- If the manufacturer has an approved informal dispute settlement procedure you will be required to arbitrate your dispute before going to court under the lemon law. If the program is not approved by the Attorney General it is your option to arbitrate or to proceed directly to court.
SOME THINGS TO DO
- You never know when you buy a new car whether it will turn out to be a lemon. As a new car buyer you should check out the dealerships’ service facility as closely as you check out the new vehicle. Is the area clean, organized, and well lit; do the equipment and tools appear modern and well maintained? A dealer who is proud of the service facility will be happy to demonstrate this. Also, ask if the dealer gives appointments for warranty repairs and what is the normal delay in obtaining an appointment.
- Prior to the sale, read and understand the warranty. The dealer is required by a Federal trade Commission rule to make all warranties available prior to the sale.
- Be wary of purchasing a service contract (extended warranty), especially contracts which are not backed by the vehicle’s manufacturer. Read and understand what is covered and more importantly what is not covered. In most cases the service contracts can be purchased up to the date the manufacturer’s new car warranty expires. Remember, there is little or no benefit from a service contract during a vehicle’s first year.
- Prior to taking delivery of your new car, inspect it. If any problems are noted, refuse delivery until they are corrected. Be wary of promises that "We’ll take care of those problems at the first service."
- You should be very concerned if a dealer attempts to deliver a new vehicle with obvious defects.
- Read, understand and follow maintenance requirements contained in the owner’s manual. Your driving habits may be considered by the manufacturer as a severe operating condition and may require more frequent maintenance.
- If problems develop, contact your dealer as soon as possible to request an appointment for repairs. On the appointment day, arrive 15 minutes early and be ready for up to a one-hour delay. Few Alaska dealers offer loaner or courtesy car service. Therefore, you should arrange to be picked up or plan on a cab ride.
- Give the service advisor a dated note completely describing all of the conditions about which you are complaining. Do not attempt to diagnose the cause of the conditions, simply describe them.
- Consider consulting with an attorney. If you do not have an attorney, contact the Alaska Bar Association’s Lawyer Referral Service in Anchorage. The telephone number is 272-0352 (outside of Anchorage call toll-free (800) 770-9999). Some labor union contracts allow for legal services. If you have this coverage, contact your union representative for assistance.
- Under the Lemon Law, if you wish to claim a refund or replacement you must give written notice by certified mail to the manufacturer and its dealer or repairing agent. You must send this notice within sixty days after the express warranty ends, or within sixty days after the one-year period ends (measured as one year from the date the motor vehicle was delivered to the original owner), whichever occurs first.
- The notice must contain the following information:
(1) That the vehicle has a nonconformity;
(2) a reasonable description of the nonconformity;
(3) that the manufacturer, distributor, dealer, or repairing agent has made a reasonable number of attempts to conform the vehicle;
(4) that the owner demands a refund or replacement vehicle to be delivered on the 60th day after the mailing of the written notice;
(5) a description of the vehicle (year, make, and model);
(6) the vehicle identification number. This number is located on the tag behind the driver’s side of your windshield, or it can be found on the vehicle registration as "serial number"; and
(7) your name, address and, if possible, a daytime phone number.
