Lemon Law Explained: What It Is, How It Works, And What's Covered

The word "lemon" was first used by the British as a slang term for something substandard or defective, and it was later adopted by Americans in the early 20^th century. Many of us have bought a lemon at one time or another. We drove off the lot in a car we thought was in great shape, only to find out it had some serious issues. Thankfully, federal and state laws have been enacted to protect consumers — so, hopefully they won't do anything drastic, like this guy who torched a dealership as revenge for being sold a lemon.

Connecticut General Statute Chapter 743b, enacted in 1982, usually gets credit as the nation's first state lemon law. That might be because it was the first law of its type enacted at a state level after the Magnuson-Moss Warranty Act, the federal government's lemon law enacted in 1975. However, both laws follow the pattern set out in California's Song-Beverly Consumer Warranty Act of 1970, which provided similar protections for consumers. Eventually, every state in the union would have its own lemon law.

All of these laws have similar elements — if you buy a car that turns out be defective while it is still under warranty, the manufacturer has a specific number of opportunities or length of time to fix it. If the manufacturer still doesn't fix the issue, the consumer has the right to ask for a refund or replacement. What do lemon laws cover? Typically, they cover any defect that keeps your car from running, compromises its safety, or decreases its value. 

Most state lemon laws work similarly and typically cover any defect or non-conformity that keeps the car from functioning, makes it unsafe, or impacts its value. Basically, if your new car has a serious issue within a specified timeframe after purchase and it's still under warranty, the manufacturer has a limited opportunity to repair the problem. You have the right to a refund or replacement if the manufacturer doesn't resolve the issue.

States differ regarding the length of time after a purchase, how many chances the manufacturer gets to fix the problem, and how long the car has to be out of service to qualify as a lemon. Some states extend lemon law protection to used cars and other vehicles, like motorcycles and even RVs (but usually just the chassis and engine). Some of these laws apply to leased vehicles, too.

For example, New York gives the manufacturer four chances to fix the defect in your vehicle. The manufacturer can't take its sweet time to fix it, either. If the car is out of service for 30 days within 2 years or 18,000 miles (whichever comes first) after your purchase, you get a replacement or a refund. Ohio, on the other hand, gives the manufacturer three chances to fix the same defect, eight total repairs, or one chance to fix a serious safety issue. Ohio's lemon law timeframe is 30 days out of service within 1 year or 18,000 miles after the purchase. Usually, you have to submit written notice to the manufacturer, explaining the defect and the dealer's failure to repair it, before you can ask for a refund or replacement. This usually takes the form of certified mail with a return receipt requested.

What's covered under lemon laws? Again, they differ from state to state, but most lemon laws cover any defect that keeps your car from operating or causes a safety issue while your vehicle is under warranty. For example, if your radiator fails while your car is still under warranty and now you can't drive because the vehicle keeps overheating, a lemon law should protect you. If your car dies whenever you turn on your headlights because the alternator is dead, that's covered, too. If the issue prevents you from using your car while it is in the warranty period, you're covered.

The same goes for safety issues. Is the dashboard airbag light coming on? That could be a problem covered under your state's lemon law. Things like steering issues and malfunctioning seatbelts may also be covered, just be sure to check the laws in your area.

Aside from these things, lemon laws also cover anything mentioned in the seller's warranty, and the law expects the seller to honor those promises. Your written warranty is categorized as an express warranty. However, an express warranty can also be anything the seller promised you verbally, though these promises can be hard to prove. That said, lemon law protection often goes even farther than an express warranty. Generally, there is also an implied warranty, which covers anything you can reasonably expect a car to do. These things have to be covered by the seller, whether they are specifically mentioned the written warranty or not. In fact, it's illegal in several states for a dealer to sell cars "as is."

Considering depreciation and the expensive costs associated with buying a new vehicle, a used car is sometimes the smarter purchase. Yet, most states' lemon laws do not cover used cars.

Currently, there are only a handful of states that offer lemon law protection for used cars. They include Connecticut, California, Hawaii, Massachusetts, Minnesota, New Jersey, New Mexico, New York, and Rhode Island. We should point out that the California lemon law was changed in response to a recent California Supreme Court decision. Now, the law only protects purchases of 2020 or newer model year vehicles, and you may have to prove that the problem existed before you bought the car.

Of course, not every state offers the same protections. For example, Connecticut's lemon law extends to cars that are less than 7 years old and covers parts and labor required to keep the car operational for 30 days or 1,500 miles after purchase. In comparison, the cutoff date in Hawaii is 5 years, and the law specifically covers the engine, transmission, drive axle, steering, brakes, and alternator. Other states go by mileage rather than model year, such as Massachusetts, which says that the car has to have less than 125,000 miles to be eligible. Minnesota sets the limit at 200,000 miles and provides broader warranty coverage for cars sold with less than 36,000 miles.

Remember, laws change all the time. Research the laws where you live before buying a used car, and if you have questions, you should check with an attorney.

The Center for Auto Safety is a consumer advocacy group that decided in 2019 to rank the lemon laws of all 50 states, plus the District of Columbia. New Jersey ranks best out of all 51 jurisdictions, with an A grade and a total score of 84 out of 100. The group scores states in 10 categories, and New Jersey was awarded perfect marks (10/10) for its handling of arbitration and attorney fees.

Washington came in second place and also got an A. Its highest mark was for attorney fees. Some states actually make the consumer pay the manufacturer's court costs if the manufacturer wins. But who would risk suing if there's a chance they're going to have to pay for corporate lawyers? Instead, Washington pays the consumer's attorney fees in arbitration if the manufacturer has representation and makes the manufacturer pay the consumer's attorney fees in appeal if the consumer wins. Rounding out the top five on this list are Rhode Island, Hawaii, and Ohio, each scoring a B+.

Illinois' lemon law earned the lowest spot on the Center for Auto Safety's list, with an F grade and a score of -3. The state scored 0 in half of the categories, including Safety Lemon. Colorado ranked 2^nd worst, with an F grade and a score of -2. It scored an alarming -10 for how it handles attorney fees. Rounding out the bottom five spots on this list were North Dakota, Louisiana, and Missouri. All five received an F grade, with North Dakota scoring 1 out of 100, Louisiana scoring 5, and Missouri scoring 6. While the categories they scored worst in varied from state to state, they all scored 0 in the Safety Lemon category.

Lemon laws are there for your protection as a consumer, but you will have to do the heavy lifting to get that protection. This starts before you even buy the car. Research the lemon law in your state to learn about the dealership's obligations. You'll also need to find out how much time you have to report a problem to the manufacturer or file a claim under the law.

If you're shopping for a used car where used vehicles are covered by lemon laws, you will have to buy from a dealership to get that protection, as private sales are not covered. Ask for a detailed vehicle history, including maintenance records, and get every promise the dealership makes in writing. Be prepared to walk away if the dealer seems to be withholding information. These things can also help you avoid being involved in a used car buying horror story.

Once you buy or lease the car, keep careful records of all maintenance, and make sure you're keeping up with the maintenance schedule outlined in the warranty. If the car needs repairs, don't procrastinate, but take it to the dealer right away. Keep a copy of the warranty. If the dealer doesn't fix the problem in the time they are allowed by law, notify the manufacturer promptly. If necessary, file the claim as soon as the law allows.

In some states, you'll have to go to arbitration instead of starting in court. Bring all of your documentation with you to the hearing. It wouldn't hurt to consult a lawyer, either. Most of all, know your rights.