How does the lemon law work?

Step by step

1. Report early and in writing. The defect must first be reported within the statutory period — commonly the first 12 to 24 months or 12,000 to 24,000 miles. A phone call is not a record; follow it with an email or a message through the manufacturer's app.
2. Take the car to an authorized dealer. Repairs at an independent shop usually do not count as attempts, and can give the manufacturer an argument that the defect was caused by someone else's work.
3. Keep every repair order. Ask for a copy each visit, check that your complaint is written the way you described it, and keep the ones that record “no problem found” — they still count as attempts in most states. Check the dates in and out, because days out of service add up.
4. Count the attempts and the days. Most statutes turn on a repair count for the same defect (often three or four) or a cumulative number of days out of service (often 30).
5. Send formal notice. Written notice to the manufacturer, not the dealer, by a method that proves delivery. The address is usually in the owner's manual or warranty booklet. Many states make this a precondition, and it gives the manufacturer one final repair opportunity.
6. Arbitration, if required. Where the manufacturer runs a state-certified program, you may have to use it before suing. Decisions typically bind the manufacturer but not you, so you can still go to court if you disagree.
7. Claim. Refund of the price and related charges, less a mileage offset, or a comparable replacement.

How the refund is calculated

A typical refund includes the purchase price, sales tax, registration and title fees, finance charges already paid and incidental costs such as towing and rental cars. From that the manufacturer deducts a reasonable allowance for use, usually calculated from the miles driven before the first repair attempt, divided by a figure such as 100,000 or 120,000 miles and multiplied by the price. On a $40,000 car driven 6,000 miles before the first repair, that offset might be about $2,000. The lender is paid off first, and the owner receives the rest.

Leased vehicles

Most states cover leased vehicles. The refund usually returns the payments made and the down payment, less the use allowance, while the manufacturer pays off the leasing company.

What usually sinks a claim

• Repair orders that describe a different symptom each visit, so the record never shows the same defect repeatedly.
• Repairs carried out by an unauthorized shop.
• Missing the statutory window by waiting to see whether the problem comes back.
• Selling or trading in the car before the claim is resolved.
• Aftermarket modifications the manufacturer can blame for the problem.

Watch

How long it takes

Manufacturer arbitration programs usually must decide within about 40 days of receiving a claim. Negotiated buybacks through a lawyer often take two to six months. Lawsuits take longer, but most settle before trial because the manufacturer faces paying the owner's attorney fees as well as the refund.

Fees

Most state lemon laws and the federal Magnuson-Moss Warranty Act shift attorney fees to the manufacturer when the consumer wins, which is why many lemon law firms take these cases without charging the consumer directly. Read the fee agreement anyway: some firms take a share of any cash settlement, and you should know how costs are handled.

Protecting yourself along the way

Keep driving only if the car is safe. For safety defects, ask the dealer to put in writing that the car is safe to drive, or request a loaner. Check for recalls and technical service bulletins on the NHTSA website, because they show the manufacturer knew about the problem. Keep a simple log of dates, symptoms, conversations and names. If the dealer refuses to write up your complaint, send the manufacturer a written note describing the visit the same day.

When to call a lawyer

After the second failed repair for the same defect, or as soon as a safety-related defect appears. A lemon law attorney can tell you whether the statute already applies, send the notice in the correct form and handle the negotiation — usually at no cost to you.