CONSUMER PROTECTION DIVISION
DEPARTMENT OF THE ATTORNEY GENERAL

In 1999, Michigan’s motor vehicle Lemon Law was amended to provide important new legal protections for Michigan consumers. Now, for the first time, consumers who lease new motor vehicles for personal, family or household use are afforded the same legal remedies as those who purchase new motor vehicles.

For many of us, buying or leasing a vehicle is one of the largest consumer transactions we will ever make. Unfortunately, no matter how careful we are, a few of our shiny, new vehicles will turn out to be lemons. That’s why it is extremely important that we understand how these significant changes to Michigan’s Lemon Law affect our rights as consumers. In this pamphlet, I have outlined answers to some of the most commonly asked Lemon Law questions. The complete text of the law is included in this brochure. I hope you’ll find this information helpful in the event you have a problem with your vehicle.

ATTORNEY GENERAL

QUESTIONS AND ANSWERS ABOUT THE LEMON LAW

What kinds of problems are covered by the new Lemon Law?

The Lemon Law protects a consumer whose new motor vehicle has a "defect or condition that impairs the use or value of the new motor vehicle to the consumer." Significantly, the law now measures the defect or condition from the point of view of the individual consumer, not the manufacturer or dealer. Clearly, an engine, transmission, brake or steering defect may meet this level of impairment. However, a persistent intermittent defect, such as a water leak, noxious odor, or paint problem may also be a defect or condition entitling the consumer to relief under the Lemon Law.

How do I know if I have a "lemon" covered by the Lemon Law?

The consumer may invoke the Lemon Law if:

1. The new motor vehicle has been subject to repair a total of 4 or more times within 2 years of the date of the first attempt to repair the defect or condition, or
   
2. The new motor vehicle is out of service because of repairs for a total of 30 or more days during the manufacturer’s warranty period or the first year, whichever is earlier.
   

Is there a time period within which the initial attempted repair must occur?

Yes. The buyer or lessee must have done the initial repair during the first year of delivery. The remaining three repairs, for the same defect, must occur within two years from the initial repair attempt. Alternatively, the vehicle must be out of service for repair for 30 or more days during the term of the manufacturer’s express warranty or within 1 year of delivery, whichever is earlier.

Does the buyer or lessee have the option of requesting a refund or replacement vehicle?

Yes. The buyer or lessee has the right to demand a refund or may choose to accept a comparable replacement motor vehicle currently in production. If a lessee agrees to accept a replacement vehicle, the lease agreement cannot be changed, except to substitute the vehicle identification number.

If I want a refund, what is included in the purchase or lease price?

The "purchase price" of the vehicle is the actual vehicle sales price listed on the buyer’s order including any cash payment, trade-in allowance, sales tax, license and registration fees and other government charges. The "lease price" means the actual sales price paid by the lessor and includes the same additions as the "purchase price." Excluded are debts from other transactions as well as customer discounts, rebates and incentives.

Okay, I think I have a defective motor vehicle. How do I start the process?

The first thing a consumer must do is give the manufacturer notice of the defect or condition by sending what is commonly called a "last chance letter" to the manufacturer by "return receipt service." The last chance letter should be sent before the fourth repair attempt or before the expiration of the 30-day period.

After my last chance letter, how long does the manufacturer have to repair my vehicle?

After you take the vehicle to the designated repair facility, the manufacturer has 5 business days to repair the defect or condition.

Must the buyer or lessee resort to the manufacturer’s arbitration procedure before filing a claim in the court system to pursue Lemon Law remedies?

No, unless the manufacturer’s mediation procedure conforms to Federal Trade Commission regulations and the manufacturer expressly requires the consumer to resort to the mediation process. Many manufacturers’ mediation procedures do not meet the requirements of the Federal Trade Commission regulations.

If I go through mediation, is the decision binding on me?

No. The manufacturer is bound by the decision, but the consumer is not.

If the buyer decides to bring a lawsuit against the manufacturer and wins in court, can attorney fees also be recovered?

Yes. The law authorizes the court to award reasonable attorney fees to a buyer who wins in court.

Can the manufacturer deduct an amount for the use of the vehicle prior to its return?

Yes. The statute sets out a complex formula to be used in calculating a "reasonable allowance for use," which takes into account the purchase or lease price, the number of miles driven, and other factors.

If the Lemon Law does not apply, are there other laws that might help a buyer or lessee?

The Lemon Law is only one law protecting buyers and lessees. Consumers may also pursue claims under the Michigan Consumer Protection Act, Michigan Uniform Commercial Code, Federal Magnuson-Moss Warranty Act, and other contract remedies. For more information, consumers may contact the Attorney General’s Consumer Protection Division.

Can the manufacturer or dealer cause consumers to waive their rights under the Lemon Law using a special clause in a contract?

No. Any contract clause which seeks to waive a consumer’s rights under the Lemon Law is void