Lemon Laws Decoded
Lemon Laws exist to protect consumers who have bought defective vehicles. Most states have some form of lemon law pertaining to new and used items like automobiles, boats, computers, electronics, major appliances, and other products that are defective or mentally distress consumers.
Most consumers know they should not have to pay for defective, it’s just unfair to make a consumer pay for a faulty vehicle. Michigan Lemon Law is there to protect you in the event that you purchase a defective automobile. A vehicle is considered a lemon once it has a certain amount of repair attempts (usually about four attempts) for the same defect within one year or 12,000 miles. The defect must be serious and make the vehicle unsafe to get you and your passengers from point A to point B. Not all defects will qualify under Michigan Lemon Law. If your vehicle meets this criteria, the manufacturer will be held responsible for compensating you.
The general expectation of the settlement is that the consumer will be made whole . Consumers that enter into settlements normally do so because the vehicle is of no other prudent use. They want the manufacturer to make the payments for the vehicle along with any other balances that remain. Consumers often leave the vehicle out of the settlement.
The process usually starts with the consumer filing a complaint with the manufacturer. A complaint can be filed with the manufacturer directly. If the manufacturer doesn’t respond, or there is no agreeable amount offered, the consumer can file an informal claim with the Better Business Bureau. The Better Business Bureau will then process the complaint and reach out to the manufacturer for a response. Once again, if the consumer and the manufacturer cannot come to an agreement then the matter can be brought to litigation. Manufacturers find it less costly to settle the case early on than to fight it in court. Manufacturers and consumers can settle at any time during the litigation process. A consumer can hire an attorney to represent them or they can represent themselves.
Considerations for Lemon Law Settlements
The outcome of a lemon law settlement can be influenced by several different factors. First and foremost is the severity of the defect. If the problem with the vehicle is one that has been plaguing other owners of the same make and model, you may have a better chance of obtaining a satisfactory settlement. For example, an automatic transmission that is known to fail in a particular model of car may be a point of negotiation. Finally, the jurisdiction where a lemon law claim is brought can affect the outcome. Some states have different standards for determining whether or not a car is a lemon, and while most lemon laws are similar, some allow for a time period during which the dealer may attempt to repair the car. Other states do not. Delaware, for instance, permits the manufacturer numerous attempts to fix the problem before qualifying for the lemon law buyback requirements.
Typical Results of Lemon Law Settlements
The most common outcomes of a lemon law case are buybacks, replacement vehicles, and cash settlements. Buybacks involve the manufacturer repurchasing the vehicle in dispute. The manufacturer must then pay the consumer for the reasonable costs of obtaining alternative transportation from the time the vehicle had to be given up until the settlement was reached. The manufacturers also pay the financing company the remaining balance due on the vehicle. Replacement vehicles do not really work out much differently than a buyback. The manufacturer gives the consumer a substitute vehicle until the case settles, which sometimes ends up being the vehicle the manufacturer will be using for the replacement vehicle. Cash buys are the exception and typically the manufacturer does not want a consumer to take cash rather than a buyback or replacement vehicle. Under a cash settlement, the manufacturer writes a check for the total purchase price of the vehicle, plus any reasonable costs for transportation of the consumer between the time of giving up the vehicle and settlement of the case (e.g., car rentals, gas, bus fare, etc.). Each result is easy to understand once reached. However, getting to that point can be very frustrating for the consumer.
Example of a Successful Lemon Law Settlement
Example 1: Marcia’s Wrong and Corrected Transmission.
First, Marcia purchased a 2010 Chrysler Pacifica for $30,000.00. Marcia received written and verbal promises from her Chrysler dealer that the Pacifica was trouble-free and could be relied upon for years of trouble-free use. A month later, the Pacifica’s transmission started slipping and exhibited rough shifting. Chrysler confirmed that the Pacifica’s automatic transmission was defective. After months of repair attempts, Marcia had the Pacifica repaired by another dealership, to the disabling of her vehicle for months.
Marcia hired the Lemon Law Attorneys at the Lemon Law Group to prosecute her Lemon Law claim on a contingency fee basis, meaning if they were not successful in getting her money, then they would not charge her anything for their legal services . The attorneys lodged a claim before Chrysler’s Automobile Warranty Administrator, which is Chrysler’s dispute settlement entity. The Lemon Law Attorneys then settled Marcia’s claim for $36,000.00, including the return of her original purchase price of $30,000.00, $2,000.00 in travel costs, $700.00 in rental car costs, $1,000.00 for mileage incurred during the disability repair period, $500.00 for towing expenses, $536.00 in lost wages for taking off of work for appointments and repairs, $1,500.00 for claiming the Lemon Law Buyback, and $75,993.00 in attorney fees! In total, Marcia received a settlement of $75,993.00 for a claim for the replacement of a defective vehicle. For a claim of this size, Marcia paid nothing out of pocket for fees and Milio and Stewart were paid slightly more than 25% of the settlement.
Guide to a Successful Lemon Law Case
If you’re dealing with a Florida lemon law case, it’s important to follow best practices to make you as successful as possible. For example, keep thorough and accurate records of all communications with the dealership and manufacturer. Minimize your downtime by communicating problems to the dealership and manufacturer as soon as they arise. Do not try to resolve a lemon law claim on your own. But if you need to negotiate with a dealership and/or manufacturer keep these tips in mind:
Keep Good Records
Documentation is essential for putting together a strong lemon law case. Be diligent about collecting receipts, emails, and other paperwork related to your faulty vehicle. Keep a file handy and carry it with you if you receive correspondence on a regular basis from your dealership and/or manufacturer regarding repair attempts.
Request Repair Records
Keeping track of service records is extremely important. You will need to provide copies of all repair records related to your claim for lemon laws. If you don’t have these records in your possession, you’ll have to request them specifically from your dealership and/or manufacturer. Depending on the state, the dealership and/or manufacturer are legally required to keep these in your file. In most cases, it’s best to request your own copies any time your vehicle is repaired.
Be Proactive About Repairs
If you have filed a complaint on your own, it will be up to you to work with the dealership and/or manufacturer to get repairs done in a timely manner. Follow up early and often for updates on the status of your claim.
Be Friendly and Respectful
We understand the frustration and emotions that go along with having a lemon. However, it is important to remain friendly and respectful when speaking with dealership and/or manufacturer representatives. While they may be responsible for your financial losses, they are also people who must follow specific procedures. Treating them with respect, and requesting documentation in a friendly manner will go a long way in establishing a productive rapport with your dealer and/or manufacturer as you proceed with your lemon law case.
Don’t Be Afraid to Stand Up For Yourself
Standing up for yourself is important when it comes to reaching a settlement. If you feel as though you’re getting the runaround from your dealership and/or manufacturer, you should speak up. Be persistent in asking for estimates and other paperwork that will help support your claim. In Florida, you have only 60 days to file a lemon law claim so it’s important to get the ball rolling.
Be Prepared to Negotiate
Once the manufacturer is notified of the repair problems, they may contact you to resolve your claim. Expect a phone call from your manufacturer and/or dealership after they’ve had a chance to review your lemon law complaint. Be prepared to negotiate and ask questions if you don’t understand the process.
When to Seek a Lemon Law Attorney
There is an unfortunate but common misconception that hiring an attorney to pursue a lemon law claim is too expensive and requires paying expensive hourly fees. This couldn’t be further from the truth. For starters, lemon law attorneys work on contingency fees. That means that we do not get paid unless we win your case for you. In general, the only costs of pursuing a lemon law claim are the filing and service fees of the court (which range from $180 to $400 depending on where you live). Those fees will be paid at the beginning of the case and will be reimbursed to you as part of any settlement or judgment at the end of the case.
A lemon law attorney knows exactly how the law works in California. For example , lemon law claim forms have specific requirements mandated by the California Department of Consumer Affairs. If an individual does not use the proper forms, the case is vulnerable to being dismissed, which can lead to loss of a consumer’s rights to recover damages.
Many individuals who try to handle their lemon law claims on their own do not realize that Toyota and Honda choose to waive their rights to a jury trial for lemon law cases, even though these companies rely on jury trials in their other litigation. This waiver can be very important to the outcome of the case which the courts cannot enforce because it is buried in a lengthy arbitration agreement. A lemon law attorney knows how to enforce the right to a trial that courts will respect, even in the presence of Toyota and Honda arbitration agreements.