Dealers may offer customers “no-haggle” prices, factory-certified used cars and better warranties. Evaluate these ads by the dealer’s reputation.
Sometimes, even the most expensive European Sports car can be a lemon. To be considered a lemon, the vehicle must meet:
- You have a significant defect that was discovered within a specified time period or mileage after the purchase of the car.
- After a reasonable number of repairs, it is impossible to fix.
You are covered by either the Magnuson–Moss Warranty Act at the Federal level or the Lemon laws in your State when you purchase a new vehicle.
Three warranties that satisfy the Lemon Law.
“As is” – No Warranty
If the dealer offers the vehicle “as-is,” you must check the box next to the “As Is, No Warranty” disclosure in the Buyers Guide. If you check the box and the dealer still promises to fix the vehicle or cancel the sale, ensure that the Buyers Guide clearly states this promise. You may not be able to get the dealer to honor his promise.
The Buyers Guide requires disclosures for three states: New Hampshire, Washington, and Louisiana. Failure to disclose the state’s required disclosures by a dealer will result in the sale being deemed “as-is”. Contact your state Attorney General to find out the required disclosures for “as-is” sales.
Dealers are responsible under state law if the cars they sell fail to meet reasonable quality standards. These standards constitute implied warranties, which are unspoken guarantees made by the seller to the buyer. To eliminate implied warranties, dealers in most states may use the words “as-is” or “with all faults” to inform buyers. Implied warranties are not subject to a time limit.
Some states, such as Connecticut, Kansas and Maine, Maryland, Massachusetts, Minnesota, Mississippi, New Jersey, New York, Rhode Island, Vermont, West Virginia, and The District of Columbia don’t permit “as is” sales for a number of used vehicles.
In effect, Federal and State Lemon Law covers “as is” sales.
Warranty of Merchantability
The warranty of merchantability is the most popular type of implied warranty. The seller promises that the product being sold will work as it should. A warranty of merchantability is the promise that a car will run. This warranty covers the car’s basic functions. This promise does not include all potential problems.
Failure to perform as promised or other issues after the sale does not prove that the seller has breached the warranty. Only if the buyer can show that the defect existed at the sale, is a breach considered. A defect that existed at the time the sale occurred may cause a problem after the sale.
Warranty of Fitness for a Particular Purpose
If you purchase a vehicle based on advice from the dealer that it is suitable to a specific use, a warranty of fitness for a specific purpose will apply.
Even if your warranty doesn’t cover the problem, implied warranties may still be available. Implied warranties are automatically included in a vehicle that is sold by a dealer with a written warranty. This protection cannot be removed by the dealer.
If states don’t allow “as-is” sales, the Buyers Guide will include an “Implied Warranty Only” disclosure. This disclosure replaces the “As Is” disclosure. If the dealer sells the car without a written warranty, the box will be checked.
If a state allows “as-is” sales, the Buyers Guide should contain the “Implied Warranty Only” disclosure. This is for vehicles that have an implied warranty or no written warranty.
The warranty is not valid if any of these statements aren’t true.
To indicate whether the warranty is complete or limited, the dealer must mark the appropriate box in the Buyers Guide. The dealer must also include the following information under the “Warranty” section:
- The dealer’s share of the repair costs. The dealer will pay 100 percent labor and 100 percent for parts. . . “
- The warranty covers only the parts and systems that are specifically covered, such as the body, frame, or brake system. The Buyers Guide’s back lists all major areas where problems could occur.
- The warranty period for each system covered is different. Example: “30 days” or “1,000 miles,” whichever comes first.
- How much and whether there is a deductible.
The Better Business Bureau (BBB) offers a free dispute resolution program called BBB Auto Line. You can settle the dispute, or you may go to arbitration if necessary. The program helps you navigate the arbitration process, from collecting documentation to negotiating a settlement.
You have the right of seeing a copy of the dealer’s warranty. It is important to read it carefully to understand what is covered. If you purchase a vehicle that comes with a warranty, get a copy of it. Make sure speak with a lawyer, particularly with an attorney with a track record of successful lemon law claims, to explore your legal options.