The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern. Consumer Alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General.
Buying or leasing a vehicle is one of the largest consumer transactions most of us will ever make. While many new vehicles are reliable, some will turn out to be lemons. Fortunately, Michigan's Lemon Law provides relief if you purchase or lease a defective vehicle. In some circumstances, you may be able to obtain a replacement vehicle or a refund of the purchase or lease price. To help you understand your rights under Michigan's Lemon Law, answers to some of the most common Lemon Law questions are given below.
Question: Which vehicles are covered by Michigan's Lemon Law?
Answer: The Michigan Lemon Law does not apply to used vehicles. The Lemon Law only applies to new vehicles. Vehicles included in the Lemon Law include passenger cars, sport utility vehicles, pickup trucks, and vans that are purchased or leased in Michigan or purchased or leased by a Michigan resident (regardless of whether the vehicle was purchased or leased in Michigan) and covered by a manufacturer's express warranty at the time of purchase or lease. Vehicles not included in the Lemon Law are larger trucks, motor homes, motorcycles, or off-road vehicles.
Question: Under the Lemon Law, do I have a right to return my vehicle within three days of purchase?
Answer: No. Do not confuse a three-day right to rescind (cancel) with the Lemon Law. First, there is no law that gives the purchaser of a vehicle - new or used - a three-day right to rescind. When it comes to purchasing vehicles, it is "buyer beware." The remedies provided by the Lemon Law, which include the right to return your vehicle and receive a refund of the purchase or lease price, are not triggered until the vehicle has undergone a reasonable number of repairs.
Question: What is the first step to obtaining recovery under the Lemon Law?
Answer: To recover under the Lemon Law you must report the problem to the manufacturer or its authorized dealer within the term of the warranty, or within one year from the date of delivery to the original purchaser, whichever comes first. After receiving timely notice of the problem, the manufacturer or its authorized dealer must repair the problem even if the repair cannot be performed until after the expiration of the manufacturer's express warranty.
Question: What if the problem I reported to the manufacturer or its authorized dealer continues to persist?
Answer: You may be able to obtain a refund of the purchase or lease price or a comparable replacement vehicle if the problem persists after a reasonable number of repair attempts.
Question: What is considered a reasonable number of repair attempts?
Answer: It is presumed that a reasonable number of repair attempts have been taken if one of the following occurs:
(a) The same defect or condition continues to exist even though the car has been subjected to repair a total of four or more times within two years of the date of the first attempt to repair the defect or condition.
(b) The vehicle is out of service because of repairs for a total of 30 or more days or parts of days during the term of the manufacturer's express warranty or within one year from the date of delivery to the original consumer, whichever comes first. This option does not require the same problem to be the cause of the days out of service.
Question: My vehicle still isn't fixed after a reasonable number of repair attempts, how do I get a refund or replacement?
Answer: You must give the manufacturer one last opportunity to repair the vehicle by giving the manufacturer written notice, by return receipt service, of the need to repair the vehicle. Notice can be given at any time after the third attempt to repair the same defect or condition or at any time after the vehicle has been out of service for at least 25 days in a repair facility.
After receiving notice, the manufacturer must notify you as soon as reasonably possible of a reasonably accessible repair facility to take your vehicle to have it repaired. After delivery of the vehicle to the designated repair facility, the manufacturer has five business days to repair the vehicle. If the vehicle is not repaired within five business days, you may receive a comparable replacement vehicle or a refund of the purchase or lease price.
If a manufacturer has established or participates in an informal dispute settlement procedure, the Lemon Law does not apply to any consumer who has not first resorted to such procedure, if the procedure does all of the following:
(a) Complies with the Magnuson-Moss warranty - federal trade commission improvement act, Public Law 93-637, 88 Stat. 2183, and 16 C.F.R. 703 (1975);
(b) Requires that the manufacturer to be bound by a decision that the consumer agrees to;
(c) Provides that the consumer is not obligated to accept the decision and may pursue the remedies provided by the Lemon Law; and
(d) Requires the manufacturer to begin the process of implementing any final settlement not more than 30 days after the settlement has been reached.
Question: If the manufacturer offers a replacement vehicle, can I demand a refund instead?
Answer: Yes. As the buyer or lessee, you have the right to demand a refund or you may choose to accept a comparable replacement motor vehicle currently in production. If you are leasing the vehicle, and agree to accept a replacement vehicle, the lease agreement cannot be changed, except to substitute the vehicle identification number.
Question: What is considered the purchase or lease price for purposes of a refund under the Lemon Law?
Answer: The purchase price or lease price includes the cost of any options or other modifications installed or made by or for the manufacturer, and the amount of all other charges made by or for the manufacturer, less a reasonable allowance for your use of the vehicle and an amount equal to any appraised damage that is not attributable to normal use or to the defect or condition.
Further, the manufacturer must reimburse you for towing costs and reasonable costs for a comparable rental vehicle that were incurred as a direct result of the defect or condition.
Through its AUTO LINE program, the Better Business Bureau (BBB) has helped almost two million consumers find a solution to their vehicle problems since its inception in 1978. If your auto manufacturer participates in the BBB AUTO LINE program, the BBB can help you negotiate with the manufacturer and, if necessary, hold an arbitration hearing. If your manufacturer does not participate in the AUTO LINE program, the BBB will route your complaint to that manufacturer.
Visit the BBB's website for more information about the program.
Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909
Toll free: 877-765-8388
Online Complaint Form