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by Originally published as "North Carolina's Lemon Law"
New cars often have minor problems that can be repaired with little trouble. Bigger problems, though, may signify that a new car is a "lemon."
"Lemon Laws"The North Carolina General Assembly addressed the problem of new car defects in 1987. Automobile warranty legislation adopted that year placed North Carolina with forty-one other states with "lemon laws." Such laws allow an automobile purchaser to go directly against a manufacturer of a new vehicle that doesn't conform to express warranties. Prior to such "lemon laws," car purchasers had little recourse for serious, recurrent problems with new cars. Complicated FTC regulations and federal acts were of little assistance to consumers. Similarly, the standard remedies provided by the Uniform Commercial Code for most "goods" proved inadequate for automobiles. North Carolina's "lemon law" serves several important purposes. For one, it establishes precise definitions for somewhat ambiguous terms. "Motor vehicle" is broadly defined as any "vehicle which is self-propelled" or designed to be "pulled by a self-propelled vehicle." Other terms defined include "consumer," "manufacturer," and even "new motor vehicle." Even those who lease automobiles may be covered by the law. A second aspect of the law is that it requires minimum express warranties from car manufacturers. Under the law, express warranties for new vehicles must last at least one year or 12,000 miles. Fortunately, many automobile manufacturers today provide warranties that last up to 5 years or 60,000 miles. The main purpose of our state's "lemon law" is to reinforce existing manufacturer warranties. The law's protection lasts up to 24 months or 24,000 miles, if the warranty is at least that long. In other words, a car owner with a 24 month/24,000 mile warranty can resort to the North Carolina "lemon law" any time during the warranty. On the other hand, a person with a 5 year/60,000 mile warranty can only turn to the law within 24 month or 24,000 miles of purchase. However, the warranty itself remains valid for the full 5 years or 60,000 miles. The gist of the "lemon law" is to allow replacement or refund for a new car that just won't conform to standards. A car can rightly be called a "lemon" under the law if a manufacturer is unable to correct a problem after a "reasonable number of attempts." The law states elsewhere that a "reasonable number of attempts" have been made if the car has been in for repair four or more times without success. A "reasonable number of attempts" has also been made if the car has been out of service for repair at least 20 business days during a one-year period. If the car is a "lemon," the statute allows for replacement of the car or a refund of the purchase price. Luckily, the consumer is given the right to choose. (Some states require a consumer to accept another car from the manufacturer that gave the lemon!) Obviously, a refund is not the full price originally paid for the automobile. Instead, the original price is decreased by an amount reflecting the use of the car. This reduction for the vehicle is based on the premise that a car will last approximately 100,000 miles. Obviously, not every problem with a new car is covered by the "lemon law." First, the defect in the car must be covered by an express warranty offered by the manufacturer. Second, the problem with the car must "substantially impair" the value of the automobile to the owner. Finally, the defect must not be the result of abuse, neglect, or tampering by the car's owner. Although an improvement on the old law, North Carolina's "lemon law" still requires consumers to jump through several hoops. For example, the law states that a "reasonable number" of repair attempts have not been made until the consumer notifies the manufacturer in writing of the defect. The manufacturer is then allowed one last chance to fix the automobile. This provision supposes that a manufacturer may not be aware that a dealer has been unable to fix a car problem. A second requirement of the law is that a manufacturer may require the consumer to first make use of an informal settlement procedure. Although arbitration may save money, the process can be confusing. Only about one-half of the major car manufacturers presently require arbitration. If arbitration is not required (or is unsuccessful), the consumer can always sue the manufacturer. According to the "lemon law," the owner must give 10 days written notice of the lawsuit to the manufacturer. In some instances, the law allows the Attorney General to bring a lawsuit if the public interest requires it. Courts can grant several kinds of relief to a consumer. Although unlikely, the law allows a judge to require that the manufacturer fix the vehicle once and for all. More likely, a court will award money damages to the car owner. These damages can be trebled if the manufacturer "unreasonably" violated the law. In such instances, the Court also has authority to award attorney's fees to the car owner.
Do you own a lemon?Your automobile may be covered by the motor vehicles warranties act if your answer is "yes" to the following questions:
This
article is intended to provide general information about the topic discussed and
is not legal advice or a legal opinion.
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