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Lemon Law

The Texas “Lemon Law” is a state law that helps consumers who buy or lease new motor vehicles and have repeated problems getting their vehicles properly repaired. The Lemon Law can help a consumer get the vehicle repurchased, replaced, or repaired. The process can be less complicated and less expensive than going to court.

Your used vehicle may be covered under the Lemon Law. If your used vehicle is still covered by the manufacturer’s original warranty (not an extended service contract), or if the problem started while under warranty and it continues to exist, repair assistance of the warranty-related problem may be available to you.

In Texas, the Lemon Law is administered by the Texas Department of Transportation’s Motor Vehicle Division and its Motor Vehicle Board.

In 1991, the Legislature changed the Lemon Law to benefit more consumers. The time period for filing a complaint and the definition of a “lemon” were expanded, incidental expenses became reimbursable, and a disclosure notice on vehicles ordered repurchased or replaced became mandatory.

In 1997, the Legislature added towable recreational vehicles (TRVs) to the Lemon Law. Besides being made primarily for temporary human habitation, TRVs must:

a. be titled and registered in Texas
b. be built on a single chassis
c. contain one or more life support systems, and be towable by another motor vehicle

Effective June 19, 1999, the Legislature limited the Lemon Law to vehicles purchased or leased from Texas licensed dealers or lessors.

What does it cover?

The Lemon Law applies to new vehicles (including cars, trucks, vans, motorcycles, all-terrain vehicles, motor homes, towable recreational vehicles (TRVs), and neighborhood electric vehicles) purchased or leased from a Texas licensed dealer or lessor that develop problems covered by a written factory warranty. Demonstrator vehicles are also considered new vehicles.

The law does not cover used motor vehicles, including program vehicles, repossessed vehicles, non-travel trailers, boats, or farm equipment, except as stated above. Neither does it cover vehicles with:

• problems caused by owner’s abuse, neglect or unauthorized changes to the vehicle
• parts or components not authorized or installed by the manufacturer. (Whenever the term “manufacturer” is used, it should be understood to include distributor and converter, as well); or, problems that do not substantially affect the use or market value of the vehicle like minor rattles or stereo problems.

How do I know if my vehicle is a lemon?

A motor vehicle may be declared a lemon if it meets all of the following conditions:

• the vehicle was purchased or leased from a Texas licensed dealer or lessor
• the vehicle has a serious defect or abnormal condition
• the defect or condition is covered by a manufacturer’s written warranty
• the owner reports the defect or condition to the dealer or manufacturer within the warranty term
• the owner gives the dealer or manufacturer a reasonable number of attempts to repair the defect or condition
• the owner gives the manufacturer (not the dealer) (preferably by certified mail) written notice of the defect and at least one opportunity for repair after notification
• the defect or condition persists and substantially impairs the vehicle’s use or market value, or creates a serious safety hazard; and, the owner files a timely Lemon Law complaint and pays the filing fee

How many chances does the dealer get to fix the vehicle?

Determining how many chances a dealer has to fix a defect is easy. Simply see if you pass either the four-times test, the serious safety-hazard test or the 30-day test. The law presumes you have given the manufacturer or authorized dealer a reasonable number of attempts to fix the defect if you pass one of these tests. The mileage requirements generally do not apply to TRVs.

Four-times test

If you have taken the vehicle to a dealership for repairs:

• two times for the same problem or defect within the first 12 months or 12,000 miles, whichever comes first; and, twice more during the 12 months or 12,000 miles following the first repair attempt; and, the problem is still not repaired – you pass the four-times test.

Serious safety-hazard test

If you have taken the vehicle for repair of a serious safety-hazard:

• once during the first 12 months or 12,000 miles, whichever comes first; and one more during the 12 months or 12,000 miles following the first repair attempt; and, the problem is still not repaired – you pass the serious safety-hazard test.

30-day test

If your vehicle has been out of service for repair because of problems covered by the original factory warranty:

• for a total of 30 days (if a comparable loaner vehicle was provided while the vehicle was being repaired, that time does not count toward the 30 days) or more – not necessary all at one time – during the first 24 months or 24,000 miles; and, there were two repair attempts during the first 12 months or 12,000 miles immediately after delivery, and a substantial problem still exists, you pass the 30-day test.

How long do I have to file a complaint?

A Lemon Law complaint must be filed within six months following the earlier of:

• expiration of the express warranty term
• 24 months
• 24,000 miles following the date of delivery of the vehicle (except TRVs)

In other words, the filing period is determined by which of the above events occurs first. To be safe, file your complaint as soon as you realize the dealer is having problems repairing the vehicle. Even if you have gone past the time limit allowed for a repurchase, the Motor Vehicle Board may still be able to help you get repairs under your warranty.

 


 

Informal Procedures

What’s my first step?
If your dealership does not seem to be able to correct the problems with your vehicle, send a letter (preferably by certified mail return receipt requested) to the manufacturer. Each manufacturer or converter must be sent notice. The owner’s manual or warranty booklet should have a contact name and the address of the manufacturer. Describe the vehicle’s condition and offer the manufacturer an opportunity to fix the problem. Better yet, tell the manufacturer or converter when the vehicle will be back at the dealership for repair.

It is important to keep a complete record of all your dealings with the manufacturer and dealer, including copies of all repair orders, letters, and records of phone calls. If you decide to file a Lemon Law complaint, you will need to send copies of all the materials to Texas Department of Transportation, Motor Vehicles Division.

How do I file a complaint?
Your complaint must be in writing. You may use the Texas Department of Transportation, Motor Vehicles Division’s complaint form available online at www.dot.state.tx.us

If you want your vehicle replaced or repurchased, you must send a $35.00 non-refundable filing fee with your complaint. However, if you win your case at a hearing, the manufacturer will reimburse you for the fee. If you are only seeking repairs under the warranty, no fee is required.

Formal Procedures

What is a Lemon Law hearing?
A Lemon Law hearing is your opportunity to prove to an administrative law judge (ALJ) that your vehicle is a lemon. You must present your own testimony or that of witnesses. You should also present letters, repair orders, or other documents (except affidavits) to prove to the ALJ that your vehicle is a lemon.

Presenting a case to the ALJ is somewhat like appearing before a judge of a small claims court. There are certain legal procedures that a judge must follow. The ALJ will relax the rules as much as possible, but the process is subject to the Texas Administrative Procedure Act, the Texas Rules of Civil Procedure, and the Texas Rules of Evidence.

When a hearing is needed, the goal of the Texas Department of Transportation, Motor Vehicles Division is to hold it and issue a decision within 150 days after receiving the complaint and filing fee. If the 150-day period expires without a decision, the consumer has the right to use the Lemon Law in court as though the Lemon Law process were complete.