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| Arbitration |
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Arbitration is an informal process that consumers
may use to obtain speedy resolution of a warranty dispute
without having to go to court, and it is legally binding on
the manufacturer only. At an arbitration hearing, the seller
and buyer testify before an impartial arbitrator about the
condition and repair history of the vehicle. |
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| "As is" Selling |
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"As is" Selling: A car that is sold "as is" is
one which is sold with no warranty, such that the dealer and/or
seller has absolutely no obligation to make any repairs, regardless
of the vehicle's condition. |
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| "Comparable" Vehicle |
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The manufacturer is required to replace your
lemon vehicle with one which is either identical or reasonably
equivalent. |
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| Collateral Charges |
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These are additional charges to a consumer that
were incurred as a result of the acquisition of the vehicle.
They usually include, but are not limited to, the following:
charges for manufacturer-installed or agent-installed items;
earned finance charges; use taxes; and title charges. |
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| Express Warranty |
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A written warranty, so labeled, issued by the
manufacturer of a new motor vehicle. The express warranty
provides certain promises concerning the vehicle's condition,
fitness for use and the manufacturer's obligations to repair,
including any terms or conditions precedent to the enforcement
of obligations under that warranty. |
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| Incidental Charges |
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These are the reasonable costs incurred by the
consumer as a result of the defect(s) about which the consumer
is complaining. These charges usually include, but are not
limited to, towing charges and the costs of obtaining alternative
transportation, as the direct result of the said defect. Incidental
charges usually do not include loss of use, loss of income,
or personal injury claims. |
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| Lemon Laws |
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Although different for each state, most Lemon
Laws follow the same general theme: that a new car may be
returned to the manufacturer for a refund or a replacement
if warranty defects are not repaired within a reasonable number
of attempts, or a reasonable number of days out of service,
or cannot be repaired. |
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| Letter of notice to manufacturer |
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A written statement which describes the motor
vehicle, the defect, and all previous attempts to repair such
defect(s), including identification of the person, firm, or
corporation who made such attempts and time of such attempts.
For example, you may want to include the following information:
your name, address, and contact information; a description
of the defect and all attempts to correct the defect; a description
of the vehicle, including year, make, and model; the vehicle
identification number, found on the registration; and a request
that the manufacturer repair the defect. |
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| Magnuson-Moss |
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One of the three federal and other state laws
that govern car warranty problems. The Magnuson-Moss law is
a federal law giving consumers substantial rights in dealing
with manufacturers of lemon cars. |
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| Manufacturer-Sponsored, Certified
Arbitration |
|
In order for a manufacturer-sponsored arbitration
program to be certified in most states, it must meet the following
requirements of the Federal Trade Commission (FTC)
for mediation procedures: it must be free of charge; it must
be non-binding to the consumer; its decisions must, in general,
be given within 40 days after receipt of the buyer's complaint;
and its decisions must be free from the influence of the manufacturer. |
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| Mediation |
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Mediation is inexpensive and informal, and does
not require that you hire a lawyer and go to court. It can
be preferable to arbitration because it is more flexible -
allowing for more creative resolutions. Because both parties
must provide consent to the resolution, it can be harder to
get manufacturers to agree to - and to give - a refund or
a replacement vehicle. However, most states do not offer mediation
programs as part of their offerings to help consumers in Lemon
Law disputes. |
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| Safety-Related Defect |
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This is an impairment which reduces the operator's
ability to control the vehicle in normal operation or which
creates a risk of fire, explosion, or other life-threatening
malfunction. Defects to the steering or brake systems are
examples of safety-related defects. |
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| Secret Warranties |
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Secret warranties are a manufacturer strategy
of paying for repairs after the automobile's written warranty
has expired, but only to those consumers who are sufficiently
aggressive about complaining. The secret warranty will cover
certain component or system malfunctions or defects which
have occurred in a widespread pattern. |
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| Service Contracts (Extended Warranties) |
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Service contracts, extended warranties, and mechanical
breakdown insurance are functionally equivalent to each other.
The consumer pays an additional amount to the seller or a
third party for protections against product defects beyond
those that are covered by the express and implied warranties.
Service contracts and extended warranties are technically
not warranties, AND they do not extend the period of your
Lemon Law rights. |
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| Substantially Impair |
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This means to significantly impair the use of
the vehicle or a component of the vehicle, or to reduce its
resale value below the average resale value for comparable
motor vehicles. Certainly defects that cause the vehicle not
to start, not to stop, or impair one's ability to operate
the vehicle would be substantial impairments. However, significant
paint defects (requiring repainting the entire vehicle) or
defects to key components, like the air conditioning system,
might be considered substantial impairments as well. Whether
a defect is a substantial impairment is a decision for the
arbitrator, judge or jury in a contested case. |
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| The Uniform Commercial Code (UCC)
|
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In addition to your rights under your state Lemon
Law, and the federal Magnuson Moss Warranty Act, the Uniform
Commercial Code-- that is, general state warranty laws-- can
be helpful in certain limited circumstances concerning your
new vehicle in dealing with the manufacturer, dealer or in
arbitration. |
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| Unreasonable Number of Repair
Attempts |
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Unreasonable Number of Repair Attempts: Preliminarily,
most state laws count it as a "repair attempt" if you make
the vehicle available to repair the defect, regardless of
whether the dealer verified the defect or made an actual attempt
to repair it. Safety related defects may require fewer repair
attempts to be considered unreasonable. While some state laws
delineate just how many safety-related repair attempts qualify
the vehicle as a lemon, most do not. However, for example,
just two unsucessful repair attempts of a brake failure problem
might qualify-- particularly if the dealer has demonstrated
or admitted it does not know what is wrong. Otherwise, state
Lemon Laws usually define "unreasonable" in terms of the number
of unsucessful repair attempts or days out of service. |
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| VIN (Vehicle Identification Number) |
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You can find this number for your vehicle on
your title. It is also included on each repair order. |
