Without question, you take pride in the inventory and dealership you offer. However, as long as you sell cars, particularly second-hand cars, no matter how cautious you are in selecting them, there is a possibility they are destined for constant, lifetime repairs.
Then what will you do if the client who purchased a car gets back with complaints that you offered them a “lemon”? How do you tell the distinction between a fluke (like the car stopping randomly) and a pattern that shows constant mechanical problems? And do you understand your responsibilities to the client under the law?
Every dealer should understand the Federal Lemon Law, created in 1975 to regulate warranties on consumer products.
What’s the Lemon Law?
The government has an obligation of protecting consumers from defective products and fraud. In protecting consumers from substandard cars, countries have legislated “lemon laws.” This allows the car purchasers the right to get a refund or a new car if the car they purchased has mechanical problems or critical defects. Generally, car companies or dealers should have the chance to fix hitches before the consumer’s rights take effect. Lemon Law offers information on federal and state protections for auto clients and the fundamentals of how countries’ laws govern auto repairs.
What Dealership Needs to Know about the Lemon Law
The Lemon Law’s purpose is not about whether a vehicle works or not; it is about the guarantee that a client buys to protect the purchase. If a client complains about lemon and never received a warranty, the Federal Lemon Law does not apply in that case; only clients with written guarantees are covered.
Understanding your responsibilities under the Federal Lemon Law
• Make sure consumers can obtain complete information on the terms and conditions of the warranty
• Give clients the chance to compare guarantee coverage before purchasing
• Promote competition between dealers based on guarantee coverage
• Support incentives for dealers to meet their guarantee obligations in an opportune and complete manner
Dealership Basic Requirements
• As a guarantor, you have to designate your printed warranty as “complete” or “limited.”
• As a guarantor, you have to provide certain specific data about your warranty coverage in a clear, single document.
• As a guarantor or seller, you should make sure that warranties are obtainable wherever your warranted customer products are sold so that customers can go through them before purchasing.
The Lemon Law applies to all distributors in all states; however, you might also have specific state Lemon Laws, which you must follow as well. Other states have the regulations on the books, but some have rights for second-hand car buyers. However, it is upon you to recognize the exact laws governing your state.
Although the defined legal details differ from one state to another, there exists a general idea that applies to most. Generally, if a car continues to a fault within the guarantee period and has been amended over four times (or has been out of service for over 30 days), it is categorized as a lemon, particularly if the fault has an impact on the use, value, or safety of the vehicle. After the car meets the state definition of a real lemon, the client can usually choose whether they need their cash back or want another vehicle.
What Transpires If You Infringe the Lemon Law?
If a client feels that their rights get violated, the Lemon Law permits them to retain the attorney’s services. In most cases, it is not the dealer who goes to court but the defective car’s producer. However, dealerships can get involved, so it’s good not to provoke fate — stay honest and open about the dealer’s vehicle guarantees, read the lemon laws in your state, and put your customers’ needs first.