All You Need To Know About Lemon Law For Leased Vehicles: What Are Your Rights?

Lemon Law – What Is It?

Understanding Lemon Law for Leased Vehicles: Know Your Rights
Lemon law is a consumer protection statute to protect individuals who purchase or lease a defective vehicle. The fundamental purpose of lemon law is to fairly compensate individuals who are afflicted with a vehicle that has faulty design and manufacture. In general, when a vehicle has a significant defect the manufacturer must pay compensatory damages , which often include a refund of the customer’s money or a replacement vehicle. A manufacturer does have the opportunity to fix the defect but only up to a certain point. The Massachusetts lemon law statute requires the manufacturer to service the vehicle three times for the same defect before the consumer can bring a claim to seek reimbursement. Alabama and Connecticut require four attempts while Georgia requires three "unreasonable" attempts. Rhode Island requires a vehicle to be out of service for a total of 30 days before a claim can be brought. Each state will have slightly different requirements but the concept is the same. With a leased vehicle it may not take as long to have the vehicle repaired three or four times so a large portion of the total lease could go by before the problem is solved.

Leased Vehicles Under The Lemon Law

One of the major misconceptions I have seen with the Florida Lemon Law is that it only applies to the purchase of a new vehicle. In reality, many leasing companies are allowing lease holders to pursue the Florida Lemon Law on their leases in lieu of filing an arbitration in accordance with the lease agreement. I have actually seen some lenders permit all and any defect claims covered by the Florida Lemon Law to be resolved through a new vehicle trade-in for another vehicle provided the buyer has already met the burden under the Lemon Law. However, once a lease has been signed, there is not a great deal of arbitration rights to rely upon, so the pursuit of a Lemon Law claim on a defective vehicle may be all that you have.
The following scenarios are some of the recent lease scenarios I have seen. In these cases, I am not able to provide the names of the manufacturers involved.
Scenario 1:
Scenario 2:
Scenario 3:
Scenario 4:
Typically, the lease agreement on your vehicle will dictate the terms of the lease. In Florida, the Florida Lemon Law provides that if a consumer has leased a vehicle, and the defect cannot be cured after three attempts, or the vehicle is out of service for 30 days in the first 12 months or 12,000 miles, that the vehicle becomes subject to replacement or refund under the Florida Lemon Law, as defined in the statute. If you have any questions regarding whether your leased vehicle is a lemon, do not hesitate to contact me at [email protected] for more information.

Leased Vehicles – What Qualifies As A Lemon?

To prevail under the Georgia Lemon Law on a leased vehicle, the claim must be made against the manufacturer rather than the leasing company. However, if the vehicle qualifies as a lemon, the manufacturer has the option of refunding the original lease payment or buying the car back and paying all amounts due under the lease. Generally, a vehicle may qualify as a lemon in the following scenarios:
· If a substantial defect is reported and repaired or otherwise addressed by the dealership three times in the first year or in the first 12,000 miles, whichever comes first, and the defect remains uncorrected.
· If the vehicle is in the repair shop for 30 calendar days or more in the first year or in the first 12,000 miles, whichever comes first, and the nature of the problems have been or can be addressed by warranty.
· If the engine has been repaired three times for a defect that causes the "check engine" light to come on and the light comes back on within 30 days of the repair.
For a vehicle with only one defect, the problem must substantially impair the use, safety or market value of the car and has not been repaired after three attempts. If the vehicle has more than one defect, the problems must be substantial and collectively must be serious enough that, had they occurred individually, the car would have qualified as a lemon.

What’s The Process If Your Leased Vehicle Is A Lemon?

If your leased vehicle is giving you problems, here are the steps you should consider:

• Document all of your complaints regarding the pattern of defects. Include detailed notes, dates of contact with the dealership, what was said, and names of the service department personnel you spoke with.
• Bring your vehicle in for repair, give service department a chance to address problem and remedy defect.
• If repair is insufficient and problem continues, bring the vehicle back in again. Document this repair attempt. Again include date of contact, what was told to service department, name of contact person, what action was taken to remedy defect, etc.
• If the problem continues after two repair attempts, send a written notice to the manufacturer outlining the defect, the dates of repair attempts and request that the manufacturer assume the remainder of your lease obligations and replace the vehicle.
• If you have sent a written request for relief to the manufacturer but still believe that the problems with your leased vehicle are significant enough to warrant being classified as a lemon, you may be able to obtain a refund of all amounts paid to the manufacturer. That includes the down payment, the total amount paid on the monthly payments up until the vehicle was declared a lemon, sales tax, registration fees, etc.
• If the manufacturer refuses to either allow you to terminate your lease and obtain a refund or simply refund your money, you may have an action against the manufacturer. Manufacturers are required to make you whole if you purchased an automobile that is a lemon. Many consumers don’t realize, however, that if they leased a lemon instead of purchased it, the same rights against the manufacturer apply.

What Can Be Recovered In A Lemon Law Case?

When a consumer brings a lemon claim to legal professionals skilled in the subject, he or she can count on complete and thorough assistance. Whether the predominate rule is arbitration or litigation, the attorney will take a proactive role in pursuing justice on behalf of their client. If a case can be settled outside of court, the cost of such would be borne completely by the manufacturer or dealership for which the lawsuit is leveled against. This means that no legal fees or litigation costs are passed on to the consumer. Legal experts work tirelessly to ensure that such settlements are fair and exceed what the consumer would have likely received pursuing arbitration through the automaker. If a lawsuit is necessary , attorneys will file the lawsuit in the most advantageous forum and at the appropriate venue. They will continue to press the case in such a way as to attempt to avoid any need for litigation. If litigation is necessary, skilled litigators will prepare a complete case including witnesses, video and all other evidence to support the claim that the vehicle is a lemon. They will aggressively pursue resolution via this process until a satisfactory settlement is reached. Settlements for a lemon involve the consumer receiving a replacement vehicle. The replacement vehicle should be at least the same quality as the lemon. If the consumer leased the vehicle, he or she may be reimbursed for all the expenses of the initial lease including taxes, registration, down payment and monthly payments.

Lemon Law For Leased Vehicles By State

Lemon laws can vary from state to state, and that includes laws that address leased vehicles. While most common law and statutory lemon laws cover leased vehicles, the scope of the coverage often differs among states. Some states have opted to limit their statutory lemon law coverage to consumer purchases only, while other states’ statutory lemon laws cover both purchases and leases. Still other states have not addressed leases at all, leaving coverage to be determined by the courts on a case-by-case basis.
As you can imagine, these variations can be critical in determining your rights. The best way to know for sure if a particular state offers lemon law relief for leased vehicles is to check with a "Lemon Law HQ" like the one available at our LemonAide.com website.

Common Myths Surrounding Lemon Law And Leases

Many people believe that, because they are leasing the vehicle, they do not have any rights under the lemon law. That is simply not true. In fact, the definition of a consumer for purposes of the Lemon Law includes any "person entitled to enforce the warranty." A lessee is a person entitled to enforce the warranty as to repairs, and if you fall within the other section of the definition, i.e., the vehicle is purchased or leased for use primarily for personal, family, or household purposes, you are entitled to make a lemon law claim as well.
A lessor may be covered under the lemon law if the warranty covers it. The warranty issued with the vehicle may cover the lessor, depending on how the document is worded.
A common misconception is that the lessee of a vehicle may only bring a claim in Pennsylvania if the lease originated in Pennsylvania. That is not true. In fact, if a lessee is seeking a vehicle with an electric motor, that vehicle must be purchased in Pennsylvania in order for the lessee to bring a lemon law claim, but otherwise if you are in Pennsylvania and you have a vehicle with a conventional fuel motor, you have the right to file a claim under the Pennsylvania Lemon Law.
Additionally, some consumers think that they can not bring a lemon law claim unless there’s a safety defect or a defect that impairs the use of the vehicle. That is also false. The Pennsylvania Lemon Law is a breach of warranty claim. A lessee is entitled to a vehicle free of defects in material or workmanship. The vehicle must be repaired under warranty if there is a problem with the vehicle that arises during the warranty period.

Leased Vehicle Lemons – How To Avoid Them

Avoiding being stuck with a lemon vehicle from the get-go is the best-case scenario. So, if you’re in the market to lease, arming yourself with as much knowledge as possible is an important first step in ensuring a positive car leasing experience. Because leasing involves a contract from who-knows-where stating an extensive amount of terms and conditions, it’s important for you to understand just what you’re getting into. Take the time to thoroughly research the lease agreement options for the specific make and model of vehicle you are considering. Remember, your lease may be exclusive to you and vary from others depending on available incentives, interest rates, markets and more. Once you settle on the lease term and payment you are comfortable with, it’s helpful to inspect the vehicle you are about to lease . Though you will be taking your car back at the end of the leasing period, and not making mortgage payments toward eventual car ownership, that does not mean you have that much leeway when it comes to vehicle upkeep and proto damage. For this reason, inspect the vehicle upon pickup to note any existing damages or problem areas within the car. This will help you avoid being charged for wear and damage that was not part of your fault. Finally, you can avoid the headache of an unintentional leasing arrangement with a lemon by leasing from a manufacturer known for quality and reliability. Research the history of the car make and model you’re considering and stick with manufacturers that have a reputation of delivering high quality vehicles. If you put in the time and do your homework, you are less likely to lease a lemon vehicle.