What's a 'Lemon Law'?

Reviewed by Carina Jenkins, J.D.

Imagine finding out that the car you've only had a week won't start. O, maybe your brand-new vehicle putters to a stop in the middle of the road without warning.

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Buying a car is exciting, but you're also making a big investment with risks. Lemon laws help protect consumers from getting stuck with malfunctioning vehicles.

What Are Lemon Laws?

Vehicles that don't work the way they should are sometimes called "lemons," and lemon laws in all 50 states protect people who have purchased new cars or trucks. If the vehicle turns out to be defective, lemon laws let the consumer pursue compensation from the manufacturer.

State lemon laws typically apply to new cars and trucks, but some state statutes offer protections for boats, used cars and other purchases. In other states, lemon laws apply to both new car purchases and leases.

The Magnuson-Moss Warranty Act

The Magnuson-Moss Warranty Act is a federal law that applies to any item with a written express warranty. Some people consider this law to be a federal lemon law, although it doesn't always offer the same protections as state laws.

Manufacturers aren't required to offer warranties. However, if a manufacturer does offer a written warranty, they must comply with the law. The act imposes many requirements for warranties and makes it easier for consumers to file lawsuits over warranty violations.

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How Do Lemon Laws Protect Consumers?

Although remedies vary by state, lemon laws give consumers the right to demand compensation for lemon cars. Retailers and car dealerships are generally not responsible for payment under lemon laws. Instead, the manufacturer provides compensation.

If you purchased a lemon, you might have the right to demand that the manufacturer:

• Repair the vehicle
• Purchase the car from you for the original purchase price
• Pay you cash to compensate you for the time the car was out of service or being repaired
• Provide you with a new vehicle

Lemon laws are different from warranties. Manufacturers or retailers may choose to offer warranties, and these often cover repairs. Lemon laws aren't optional and go further than warranties by requiring manufacturers to provide cash compensation.

Is My Car (or Other Product) a Lemon?

Not every defective vehicle is a lemon. Laws vary by state, but generally, the defect must be substantial. A car might be a lemon if:

• The defect creates a serious safety concern, such as a problem with the braking system, and isn't fixed in a single repair attempt.
• A defect remains after several repair attempts.
• Problems have caused the vehicle to be unavailable for an unreasonable amount of time.

State laws vary, so it's important to check local laws. For example, some states define a lemon as a car that isn't fixed after a certain number of repair attempts, while other statutes define a lemon as a car requiring "unreasonable" repairs.

Can Used Cars Be Lemons?

Many consumers worry more about problems with used cars and may associate the term "lemon" with used vehicles. However, while every state offers protections for new vehicles, only a handful of states have lemon laws for used cars.

Even when a state covers used cars, the car must meet criteria set by the law. Some state lemon laws only cover vehicles that are new enough to be covered by the manufacturer's warranty. Others offer more coverage. For example, the lemon law in Massachusetts covers used cars with less than 125,000 miles, and it covers higher mileage cars if they fail an inspection within a week of purchase.

What Should You Do if You Think You Have a Lemon on Your Hands?

If you think you've purchased a lemon, you'll need to consider whether your state's laws cover the purchase. Is your lemon a new car, used car, boat or something else? Does your state protect that type of item?

Next, determine whether the problem with your car or other item is substantial enough to make it a lemon. Sometimes this is clear-cut, but other times it can be tricky. For example, if your state defines a lemon as a car requiring repairs that take an unreasonable amount of time, there can be confusion over what constitutes unreasonable.

You must usually provide written notice to the manufacturer if you believe your purchase qualifies as a lemon. However, procedures for demanding a refund or replacement vary by state, so you'll want to ensure you understand the steps and requirements for your location.

The attorney general in many states has a consumer protection division that can provide information on lemon laws and answer questions. There are also private attorneys who can help.