Understanding Minnesota Lemon Law
American car dealerships sell roughly 150,000 cars each year classified as lemons: cars with repeated, unfixable problems. Lemons can come from any manufacturer: Hyundai, Chevrolet, Honda and every other manufacturer has built lemon vehicles over the years.
“Lemon laws” enacted across the United States help protect consumers who purchase defective vehicles and provide a legal procedure to compensate them for their losses. Additionally, a powerful federal law known as the Magnuson-Moss Warranty Act provides protection for consumers who purchase cars that are having problems and have an unexpired manufacturer’s warranty.
Minnesota’s lemon law covers passenger automobiles designed and used to carry no more than 15 people including the driver.
This covers pickup trucks and passenger vans. The law further covers the chassis or van portion of a recreational vehicle, as well as the chassis or van portion of an ambulance. The law also covers used vehicles.
The Minnesota lemon law covers purchasers or those leasing new vehicles used for personal, family, or household purposes at least 40% of the time. The law’s protections extend to those to whom the new vehicle is transferred within the duration of the manufacturer’s written warranty. Licensed ambulance services that purchase or lease a new ambulance are covered by the law as well.
The lemon law covers any “nonconformity” of the vehicle. The law defines nonconformity as any defect or condition that doesn’t conform to the manufacturer’s written warranty that substantially impairs the use or market value of the vehicle to the consumer.
Problems that don’t substantially impair the use or market value of the vehicle, such as radio problems or slight rattles, aren’t covered by the law. Nonconformities caused by abuse, neglect or unauthorized modifications or alterations of the vehicle by the consumer are likewise not covered.
The manufacturer must repair any nonconformity if the consumer reports it within the period of the written warranty, or within the “eligibility period.” The law defines the eligibility period as either the period specified in the warranty, two years after the date of the vehicle’s original delivery to the consumer, or within the first 24,000 miles of operation – whichever comes first.
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The consumer must allow the manufacturer a “reasonable number of repair attempts” to fix the nonconformity. The Minnesota lemon law defines reasonable number of repair attempts as four or more attempts for the same problem without success. The manufacturer has only one attempt to repair a problem with the vehicle’s steering or braking system likely to cause death or injury.
After this, if the nonconformity remains, or if the vehicle is out of service for more than 30 working days, the manufacturer must repurchase or replace the vehicle. A manufacturer repurchasing a nonconforming vehicle must pay the full vehicle purchase price, including the cost of any options or modifications installed by the manufacturer or dealer. The manufacturer must also pay back sales or excise taxes, license and registration fees and reimbursement for towing. The manufacturer can withhold a reasonable allowance for use.
Minnesota’s lemon law requires manufacturers repurchasing a leased vehicle to pay the lessor a full refund of the vehicle’s original purchase price, less any amounts paid by the consumer on the lease. The manufacturer must also pay the lessee the amount they paid as well, plus any sales or excise taxes.
The Minnesota lemon law requires a manufacturer replacing a nonconforming vehicle to provide a comparable vehicle.
Minnesota’s lemon law requires all manufacturers selling vehicles in the state to participate in an “informal dispute settlement mechanism,” i.e. arbitration, located in the state. Consumers must first use this mechanism before suing in court under the lemon law.
In some instances, arbitration can allow for a faster resolution of conflicts between consumers and manufacturers. Arbitration hearings usually last only one day, and take place in a much less formal setting than a court. Consumers should bring all documents relating to the vehicle and the repair process, including the letters exchanged with the manufacturer. They should also arrange for witnesses to appear at the hearing, including friends who have witnessed the vehicle’s problems.
However, arbitration often ends with an outcome unfavorable to the consumer. The third party arbitrator may award the consumer with additional repair attempts, which doesn’t provide any remedy they didn’t have before. They may also decide to dismiss the claim, siding with the manufacturer. The law makes no mention of the ability to recoup attorney’s fees during arbitration. Fortunately, the federal Magnuson-Moss Warranty Act allows for consumers to sue for attorney’s fees alongside damage awards in court.
The manufacturer must abide by the decision of the arbitrator, while the consumer does not. If dissatisfied with the outcome, a consumer can bring legal action in the civil court system. By filing a claim under the Magnuson-Moss Warranty Act, Minnesota consumers can hire lawyers who will represent them without the vehicle owner having to pay any attorneys’ fees directly out of their pocket. The Act provides that the vehicle manufacturer shall pay the claimants’ reasonable attorneys’ fees if the claimant prevails against the manufacturer. Lemonlawusa.org encourages vehicle owners with a lemon to obtain legal counsel. You can bet the car manufacturers have legal counsel at the ready to help defend against lemon law claims both in arbitration and in court. Shouldn’t you have competent legal counsel in your corner?