AN ACT regarding warranties on new motor vehicles; to require
certain repairs to new motor vehicles; to provide remedies for the
failure to repair such vehicles; and to prescribe duties for certain
state agencies.
(i) A person who purchases or leases a new motor vehicle for
personal, family, or household use and not for the purpose of
selling or leasing the new motor vehicle to another person.
(ii) A person who purchases less than 10 new motor vehicles
a year.
(iii) A person who purchases 10 or more new motor vehicles a
year only if the vehicles are purchased for personal, family,
or household use.
(iv) Any other person entitled to enforce the provisions of
an express warranty pursuant to the terms of that warranty.
(b) "Lessee" means a person who, under a lease, acquires the right
to possession and use of a new motor vehicle.
(c) "Lessor" means a person who, under a lease, transfers the
right to possession and use of a new motor vehicle.
(d) "Manufacturer" means any person who manufactures, assembles,
or is a distributor of new motor vehicles and includes an agent
of a manufacturer but does not include a new motor vehicle dealer.
(e) "Manufacturer's express warranty" means an express warranty
as determined under the uniform commercial code, 1962 PA 174, MCL
440.1101 to 440.11102, offered by the manufacturer on a new motor
vehicle.
(f) "Motor vehicle" means a motor vehicle as defined in section
33 of the Michigan vehicle code,1949 PA 300, MCL 257.33, that is
designed as a passenger vehicle, or sport utility vehicle, but does
not include a motor home, bus, truck other than a pickup truck or
van, or a vehicle designed to travel on less than 4 wheels.
(g) "New motor vehicle" means a motor vehicle that is purchased
or leased in this state or purchased or leased by a resident of
this state and is covered by a manufacturer's express warranty at
the time of purchase or lease.
(h) "New motor vehicle dealer" means a person or that person's agent
who holds a dealer agreement for the sale of new motor vehicles,
who is engaged in the business of purchasing, leasing, selling,
exchanging, or dealing in new motor vehicles, and who has an established
place of business in this state.
(j) "Resident of this state" means as follows:
(i) For an individual, an individual who is a legal resident
of this state.
(ii) For a sole proprietorship or partnership, a sole proprietorship
or partnership created pursuant to the laws of this state and
its main office is located in this state.
(iii) For a corporation, a corporation that is a domestic corporation
and was created under the laws of this state.
(iv) For an association, an association created pursuant to
the laws of this state and its main office is located in this
state.
(v) For a unit or agency of government, a unit or agency of
government located in this state.
(vi) For a trust, estate, or other legal entity, a trust, estate,
or other legal entity created pursuant to the laws of this state
and that is located in this state.
(k) "Lease price" means the actual vehicle sales price paid by
the lessor including any cash payment by the consumer and the sum
equal to any allowance for any trade-in but excludes debt from any
other transaction as well as any manufacturer to consumer discount,
rebate, or incentive appearing in the agreement or contract that
the consumer received or that was applied to reduce the purchase
or lease cost. Additionally, any sales tax, license and registration
fees, and similar government charges not included elsewhere paid
by the lessor on behalf of the lessee are included as a part of
lease price.
(l) "Purchase price" means the actual vehicle sales price listed
on the buyer's order including any cash payment by the consumer
and the sum equal to any allowance for any trade-in but excludes
debt from any other transaction as well as any manufacturer to consumer
discount, rebate, or incentive appearing in the agreement or contract
that the consumer received or that was applied to reduce the purchase
cost. Additionally, any sales tax, license and registration fees,
and similar government charges not included elsewhere paid by the
consumer are included as a part of purchase price.
MCL 257.1402. Repair of defect or condition; report.
Sec. 2. If a new motor vehicle has any defect or condition
that impairs the use or value of the new motor vehicle to the consumer
or which prevents the new motor vehicle from conforming to the manufacturer's
express warranty, the manufacturer or a new motor vehicle dealer
of that type of motor vehicle shall repair the defect or condition
as required under section 3 if the consumer initially reported the
defect or condition to the manufacturer or the new motor vehicle
dealer within 1 of the following time periods, whichever is earlier:
(a) During the term the manufacturer's express warranty is in
effect.
(b) Not later than 1 year from the date of delivery of the new
motor vehicle to the original consumer.
History: 1986, Act 87, Eff. June 25, 1986.
MCL 257.1403. Replacement of motor vehicle or refund; allowance
for use; reimbursement for towing costs and costs for rental vehicle;
consent to replacement of security interest; presumption; performing
repairs after expiration of warranty; extension of time for repair
services.
Sec. 3. (1) If a defect or condition that was reported to the
manufacturer or new motor vehicle dealer pursuant to section 2 continues
to exist and the new motor vehicle has been subjected to a reasonable
number of repairs as determined under subsection (5), the manufacturer
shall within 30 days, do either of the following as applicable:
(a) If the new motor vehicle was purchased, either replace the
new motor vehicle with a comparable replacement motor vehicle
currently in production and acceptable to the consumer or accept
return of the vehicle and refund to the consumer the purchase
price. A consumer shall have the right to demand a refund.
(b) If the new motor vehicle was leased, the consumer has the
right to a refund of the lease price paid by the consumer. The
consumer may agree to accept a comparable replacement vehicle
in lieu of a refund for the lease price paid. If the consumer
agrees to accept a replacement vehicle, the lease agreement shall
not be altered except with respect to the identification of the
vehicle.
(2) The purchase price or lease price includes the cost of any
options or other modifications installed or made by or for the manufacturer,
and the amount of all other charges made by or for the manufacturer,
less a reasonable allowance for the consumer's use of the vehicle,
and less an amount equal to any appraised damage that is not attributable
to normal use or to the defect or condition. A reasonable allowance
for use is the purchase or lease price of the new motor vehicle
multiplied by a fraction having as the denominator 100,000 miles
and having as the numerator the miles directly attributable to use
by the consumer and any previous consumer prior to his or her first
report of a defect or condition that impairs the use or value of
the new motor vehicle plus all mileage directly attributable to
use by a consumer beyond 25,000 miles. If a vehicle is replaced
or refunded under the provisions of this section, if towing services
and rental vehicles were not made available without cost to the
consumer, the manufacturer shall also reimburse the consumer for
those towing costs and reasonable costs for a comparable rental
vehicle that were incurred as a direct result of the defect or condition.
(3) If a court or an alternative dispute settlement procedure
described in section 5 determines that a consumer has provided sufficient
evidence that the vehicle did not provide reliable transportation
for ordinary personal or household use for any period beyond the
first 25,000 mileage usage period of the vehicle, the court or the
alternative dispute settlement procedure may reduce the vehicle
usage deduction for mileage beyond the first 25,000 mileage usage
period only for the period beyond the 25,000 mileage usage period
that the court or alternative dispute settlement procedure determines
that the vehicle did not provide useful transportation for ordinary
personal or household use. To determine if the vehicle did or did
not provide useful transportation for ordinary personal and household
use, the court or the alternative dispute settlement procedure shall
consider all of the following:
(a) The number of repairs.
(b) The cost of the repairs.
(c) The number of days the vehicle was out of service.
(d) Whether the vehicle's need for repair significantly affected
the consumer's ability to use the vehicle for personal or household
functions.
(4) The provisions of this act do not affect the obligations of
a consumer under a loan, sales, or lease contract or the secured
interest of a secured party. The secured party shall consent to
the replacement of the security interest with a corresponding security
interest on a replacement motor vehicle that is accepted by the
consumer in exchange for the motor vehicle having a defect or condition
pursuant to subsection (1), if the replacement motor vehicle is
comparable in value to the original motor vehicle. If for any reason
the security interest in the new motor vehicle having a defect or
condition pursuant to subsection (1) is not able to be replaced
with a corresponding security interest on a new motor vehicle accepted
by the consumer, the consumer shall accept a refund. A refund required
under this subsection or subsection (1) shall be made to the consumer
and the secured party, if any, as their interests exist at the time
the refund is to be made. The lessor, if any, shall be notified
if a refund is made to a lessee under this act. A lessor shall not
assess a fee for early termination of a lease under this act.
(5) It shall be presumed that a reasonable number of attempts
have been undertaken to repair a defect or condition if 1 of the
following occurs:
(a) The same defect or condition that substantially impairs
the use or value of the new motor vehicle to the consumer has
been subject to repair a total of 4 or more times by the manufacturer
or new motor vehicle dealer within 2 years of the date of the
first attempt to repair the defect or condition, and the defect
or condition continues to exist. Any repair performed on the same
defect made pursuant to subsection (6) shall be included in calculating
the number of repairs under this section. The consumer or his
or her representative, before availing himself or herself of a
remedy provided under subsection (1), and any time after the third
attempt to repair the same defect or condition, shall give written
notification, by return receipt service, to the manufacturer of
the need for repair of the defect or condition in order to allow
the manufacturer an opportunity to cure the defect or condition.
The manufacturer shall notify the consumer as soon as reasonably
possible of a reasonably accessible repair facility. After delivery
of the vehicle to the designated repair facility, the manufacturer
has 5 business days to repair the defect or condition.
(b) The new motor vehicle is out of service because of repairs
for a total of 30 or more days or parts of days during the term
of the manufacturer's express warranty, or within 1 year from
the date of delivery to the original consumer, whichever is earlier.
The consumer, or his or her representative, before availing himself
or herself of a remedy provided under subsection (1), and after
the vehicle has been out of service for at least 25 days in a
repair facility, shall give written notification by return receipt
service to the manufacturer of the need for repair of the defect
or condition in order to allow the manufacturer an opportunity
to cure the defect or condition. The manufacturer shall notify
the consumer as soon as reasonably possible of a reasonably accessible
repair facility. After delivery of the vehicle to the designated
repair facility, the manufacturer has 5 business days to repair
the defect or condition.
(6) Any repairs required to be made under this act shall be made
even if the repairs need to be performed after the expiration of
the manufacturer's express warranty. The defect needing repair must
be a continuation of the original attempt to repair the defect.
(7) The term of an express warranty, and the 1-year, 30-day, and
5-day periods of time provided for in this section shall be extended
because repair services were not available to the consumer because
of war, invasion, strike, fire, flood, or other natural disaster.
257.1404 Other legal remedies not limited or prohibited.
Sec. 4. Nothing in this act shall be construed to limit or
prohibit any other legal remedy of a consumer regarding a breach
of a manufacturer's express warranty or an implied warranty for
a new motor vehicle.
History: 1986, Act 87, Eff. June 25, 1986.
257.1405 Informal dispute settlement procedure.
Sec. 5. If a manufacturer has established or participates in
an informal dispute settlement procedure, the provisions of this
act shall not apply to any consumer who has not first resorted to
such procedure, if such procedure does all of the following:
(a) Complies with the Magnuson-Moss warranty--federal trade
commission improvement act, Public Law 93-637, 88 Stat. 2183,
and 16 C.F.R. 703 (1975). An informal dispute settlement procedure
which the federal trade commission rules does not comply with
16 C.F.R. 703 (1975) shall be considered as not meeting the requirements
of this subdivision.
(b) Requires that the manufacturer is bound by any decision reached
if the consumer agrees to it.
(c) Provides that the consumer is not obligated to accept the
decision and may pursue the remedies provided for under this act.
(d) Requires the manufacturer to initiate the process necessary
to implement any final settlement not more than 30 days after
the settlement has been reached.
History: 1986, Act 87, Eff. June 25, 1986.
257.1406 Defects or conditions to which act inapplicable.
Sec. 6 . This act does not apply to a defect or condition that
is the result of either of the following:
(a) A modification not installed or made by or for the manufacturer.
(b) Abuse or neglect of the new motor vehicle or damage due
to an accident that occurred after the new motor vehicle was purchased
or leased by the consumer.
257.1407 Waiver of rights and remedies prohibited; recovery
of costs, expenses, and attorneys' fees.
Sec. 7. (1) Any rights and remedies provided a consumer under
this act may not be waived.
(2) A consumer who prevails in any action brought under this act
may be allowed by the court to recover as part of the judgment a
sum equal to the aggregate amount of cost and expenses, including
attorneys' fees based on actual time expended by the attorney, determined
by the court to have been reasonably incurred by the consumer for
or in connection with the commencement and prosecution of such action,
unless the court in its discretion shall determine that such an
award of attorneys' fees would be inappropriate.
History: 1986, Act 87, Eff. June 25, 1986
257.1408 Written statement to be included with title; type
size; form.
Sec. 8.(1) Until December 31, 1999 and after as provided in subsection
(2), the secretary of state shall include with any title for a new
motor vehicle a written statement, in 10-point boldfaced type, in
substantially the following form:
"IMPORTANT: IF THIS VEHICLE IS DEFECTIVE YOU MAY BE ENTITLED UNDER
STATE LAW TO REPLACEMENT OF IT OR A REFUND OF ITS PURCHASE PRICE.
TO OBTAIN REPLACEMENT OR A REFUND, YOU MUST FIRST REPORT THE DEFECT
IN WRITING TO THE MANUFACTURER AND YOU MAY BE REQUIRED TO FIRST
ARBITRATE THE DISPUTE. IN ORDER TO PROTECT YOUR RIGHTS UNDER THIS
LAW, YOU SHOULD:
1. KEEP COPIES OF ALL CORRESPONDENCE TO AND FROM THE MANUFACTURER
AND THE DEALER.
2. KEEP COPIES OF ALL WORK ORDERS FOR REPAIRS ON THE VEHICLE
INCLUDING THE DATE(S) THE WORK WAS PERFORMED AND THE MILEAGE ON
THE VEHICLE AT THE TIME OF REPAIR.
3. FOLLOW ALL REQUIREMENTS OF THE WARRANTY, INCLUDING ANY REQUIREMENT
THAT THE REPAIRS MUST BE DONE BY AN AUTHORIZED DEALER SPECIFIED
BY THE MANUFACTURER. IF YOU HAVE ANY QUESTIONS REGARDING YOUR
RIGHTS UNDER THIS LAW, CONSULT AN ATTORNEY OR OTHER QUALIFIED
INDIVIDUAL."
(2) Beginning January 1, 2000, the secretary of state shall include
with documentation for a purchased or leased new motor vehicle a
written statement, in 10-point boldfaced type, in substantially
the following form:
"IMPORTANT: IF THIS VEHICLE IS DEFECTIVE YOU MAY BE ENTITLED UNDER
STATE LAW TO REPLACEMENT OF IT OR A REFUND OF ITS PURCHASE PRICE
OR LEASE PRICE, AS APPLICABLE. TO OBTAIN REPLACEMENT OR A REFUND,
YOU MUST FIRST REPORT THE DEFECT IN WRITING TO THE MANUFACTURER
AND YOU MAY BE REQUIRED TO FIRST ARBITRATE THE DISPUTE. IN ORDER
TO PROTECT YOUR RIGHTS UNDER THIS LAW, YOU SHOULD:
1. KEEP COPIES OF ALL CORRESPONDENCE TO AND FROM THE MANUFACTURER
AND THE DEALER.
2. KEEP COPIES OF ALL WORK ORDERS FOR REPAIRS ON THE VEHICLE
INCLUDING THE DATE(S) THE WORK WAS PERFORMED AND THE MILEAGE ON
THE VEHICLE AT THE TIME OF REPAIR.
3. FOLLOW ALL REQUIREMENTS OF THE WARRANTY, INCLUDING ANY REQUIREMENT
THAT THE REPAIRS MUST BE DONE BY AN AUTHORIZED DEALER SPECIFIED
BY THE MANUFACTURER. IF YOU HAVE ANY QUESTIONS REGARDING YOUR
RIGHTS UNDER THIS LAW, CONSULT AN ATTORNEY OR OTHER QUALIFIED
INDIVIDUAL."
(3) Beginning January 1, 2000, the secretary of state shall include
a summary of the provisions of this act on a database that is accessible
to the public through the internet. As used in this section, "internet"
means a worldwide interconnection of individual computers and computer
networks and the facilities and equipment used to access those interconnected
networks.
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