Understanding South Dakota Lemon Law
Approximately 150,000 cars sold in America on average every year are classified as lemons: cars with repeated, unfixable problems. Manufacturers including Dodge, Toyota, Ford, and many others build their fair share of lemons every year. Some of those vehicles are sold in South Dakota.
“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. South Dakota consumers can take advantage of these laws. 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.
The South Dakota lemon law provides a legal remedy for consumers who purchase new or previously untitled vehicles used for personal, family or household purposes. The lemon law further covers any other person entitled by the terms of the warranty to enforce its obligations. South Dakota’s lemon law does not, however, cover consumers who lease their vehicles.
South Dakota’s lemon law covers vehicles intended primarily for use and operation on public highways. The lemon law covers used vehicles, but not motorhomes or vehicles with a manufacturer’s gross vehicle weight rating of 10,000 pounds or more.
The South Dakota lemon law covers “nonconforming conditions.” The lemon law defines a nonconforming condition as any condition that causes a vehicle to not conform to the terms of its express warranty. The condition also significantly impairs the use, value or safety of the vehicle, and arises only in the course of ordinary use of the vehicle.
South Dakota’s lemon law does not cover any condition caused by consumer negligence, accident, vandalism, or unauthorized modification. It also does not cover damage resulting from attempts to repair the vehicle by someone other than the manufacturer or their authorized agents.
The South Dakota lemon law compels manufacturers to repair any nonconforming conditions reported within the lemon law rights period. The lemon law defines that period as one year after the vehicle’s delivery to the consumer or the first 12,000 miles of operation, whichever occurs first. The manufacturer must repair any nonconforming condition reported during this time, even if the repairs occur after the period expires. However, the manufacturer’s duty to repair ends after two years or 24,000 miles of operation, whichever occurs first.
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South Dakota’s lemon law compels manufacturers to repurchase or replace any nonconforming vehicle if they are unable to successful repair it after a reasonable number of attempts. The lemon law defines a “reasonable number” as four or more times for the same nonconformity without success. The definition also covers any time the vehicle is out of service for 30 calendar days or longer to repair any nonconformity.
After the aforementioned reasonable number of repair attempts, the consumer must allow the manufacturer one final opportunity to “cure the nonconforming condition.” The manufacturer must notify the consumer of a reasonably accessible repair facility within seven days of receiving written notice of the condition. The manufacturer has 14 days after the consumer brings the car to the repair facility to fix the problem.
A manufacturer repurchasing a nonconforming vehicle must repay the vehicle’s full contract price, including all charges for undercoating, transportation, and installed options. They must also pay all governmental charges and fees, as well as finance charges and incidental damages such as towing or the cost of alternative transportation. The manufacturer may withhold a reasonable allowance of use, calculated from the number of miles driven before the first report of nonconformity.
Manufacturers replacing a nonconforming vehicle must provide a comparable new vehicle, along with a refund of all collateral charges. The reasonable allowance for use does not apply to replacement vehicles.
Before pursuing their lemon law rights to repurchase or replacement, the consumer must first resort to the manufacturer’s “informal dispute settlement procedure,” i.e. arbitration. The consumer must exhaust their options through arbitration before instituting a cause of action under the lemon law.
In an arbitration, a neutral third party (an arbitrator) decides whether a reasonable number of repair attempts have been made and what award, if any, should be granted to the consumer. If the consumer accepts the arbitrator’s decision, the manufacturer agrees to comply with it. A manufacturer’s arbitration process must comply with the Code of Federal Regulations.
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.
There are, however, downsides to the arbitration process. Firstly, while attorneys are not required in the process, the manufacturer will almost certainly send an attorney or someone advised by an attorney to represent them at the hearing. Any consumer looking to pursue the arbitration process in South Dakota is advised to speak with a law firm beforehand.
Secondly, one of the reasons arbitration is faster is because both sides have less rights to discovery: the legal process by which litigants can obtain evidence. In a lemon law case this puts consumers at a disadvantage, as they need discovery to gather evidence to prove their cases, and much of the evidence is held by the manufacturer and dealership.
Lastly, even though consumers have the option of rejecting the arbitrator’s decision, the manufacturer is allowed to introduce the arbitrator’s decision in trial. This could bias the jury against the consumer. In light of the foregoing, vehicle owners with valid lemon law claims should seek the advice and counsel of qualified attorneys with experience handling lemon law claims.
By filing a claim under the Magnuson-Moss Warranty Act, South Dakota consumers can hire lawyers who will represent them without the vehicle owner having to pay any attorneys’ fees directly out of their pocket. This is because the federal Act provides that the vehicle manufacturer may 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.