Lemon Laws: A Sweet Deal

Before the advent of "lemon laws" the unlucky purchasers of cars with nagging mechanical problems could only seek recompense through costly and time-consuming litigation against the car dealer and manufacturer. The consumer bore the difficult burden. Often, the results were frustrating.

Spurred by consumers' complaints of a sour deal, state legislatures responded by enacting lemon laws, which give consumers a tough new weapon in this battle.

Lemon laws establish an administrative procedure for consumers who have purchased a vehicle that does not work properly. The dispute is usually heard by an arbitrator instead of a court. The procedure is less formal than a court proceeding and assures the consumer of a speedy resolution to the dispute. Most state laws require car manufacturers to bear the expense of the arbitration system.

While these law generally cover new automobiles for two years from the date of delivery, some state's statutes also apply to used cars purchased from a dealer and to leased cars. During the two-year period, lemon owners are entitled to return the car for a full refund if they can show that the manufacturer failed to eliminate the defect after a reasonable opportunity to do so. In most states, consumers must give the manufacturer four crack at fixing the problem before they can seek a refund. After that, the owner may go through the arbitration process or sue in court.

Proponents say that lemon laws put the squeeze on car manufacturers to respond to consumer complaints. Some consumer activists worry that the arbitration process may be biased in favor of the automobile industry, however. Critics argue that many lemon laws have not gone far enough because they retain the UCC's requirement that the consumer prove that the recurring defect "substantially impairs" the car's value, and that subjectivity and ambiguity remain the standard for winning or losing the claim.

Nonetheless, lemon laws will undoubtedly help hapless consumers who find that their cars are spending more time in the repair shop than on the road.