What is the Lemon Law in Texas?
The Texas Lemon Law is a state consumer protection statute originally enacted in the 1980s. The law is designed to provide relief for consumers who have purchased defective motor vehicle(s) from a manufacturer or dealer and have been unable to force the manufacturer or dealer to bring a defective vehicle to a satisfactory repair condition. The law applies to motor vehicles sold, owned, registered, and used in Texas . That means that the Lemon Law applies to trucks, cars, buses, vans, SUVs, vans, motorcycles, and all other motorized vehicles that are operated on highway.
The Lemon Law covers vehicles that have a defect that effects the use, market value, or safety of the car (motor vehicle), and the defect has to be something that has gone unrepaired after four or more attempts to have it fixed, or the car has been out of service for repairs for twenty or more days during the first year or first 12,000 miles of use.
Does the Lemon Law Cover Used Cars?
The Texas Lemon Law applies to used cars that are believed to be defective. However, you have to be careful when relying on it because there are some limitations. The Texas Lemon Law rules apply a little differently in the used car context because it is presumed that used cars are being sold "as is" and something wrong with the vehicle can mean that the consumer has to participate in a lengthy, costly process to try and prove that the car is a lemon.
Used cars are also not subject to the same type of warranty law protection. For example, the Magnuson-Moss Warranty Act, a federal law with consumer protection provisions for products, does not apply to used cars.
There are still some situations where the Texas Lemon Law helps the consumer. If you have a warranty – even a used vehicle service contract – from the manufacturer to repair defects in materials or workmanship for a used vehicle, you are protected by the Texas Lemon Law if the car repeatedly breaks down during the warranty period. Repairs must be within the first two years after delivery of the car. In addition, for the Texas Lemon Law to apply, you must have notified the manufacturer within one year after the expected delivery for the service contract or if the service contract is being offered by the dealer, the time that you hand over payment for the contract.
Lemon Law protections can also help when defects in materials or workmanship become apparent that were not covered under warranty but the dealer has agreed to repair. If you buy a used car and one or more parts do not work properly and have been acknowledged by the dealer or warranty provider, the Lemon Law applies if there is a bona fide dispute about responsibility for the defect. Does that really mean the Lemon Law applies? Again, it depends on what you have to do to satisfy the lemon law process.
For example, at first, the dealer may be very cooperative about fixing your car, but after the three or four visit to fix the defect, the dealer becomes less and less willing to continue addressing the issue. In addition, the dealer may not offer to let you drive an alternate car of the same type while your car is being repaired. The dealer also may be unable to fix the defect, i.e., the part ordered to fix your car is defective. At that point, you will have to be prepared to at least informally mediate with the dealer and the warranty provider to address the defect. If everything works out, congratulations! You got a quick fix to your problem under the Lemon Law that you would have had the additional burdens of arbitration or litigation to resolve. If, however, the parties are getting further apart and the dispute must be arbitrated or litigated, no Lemon Law protection will help you. Generally, Texas Lemon Law protection applies when you are able to get all issues resolved at a lower tier process.
How to Spot a Lemon Used Car
To classify a used vehicle as a "lemon," the motor vehicle must have defects or issues that are substantial and persistent. Small issues or one-time errors may not cause enough of a problem for you to seek recourse, but major issues should be addressed quickly. Here are some signs your vehicle is a lemon. Unsettled Acceleration – A car that can’t seem to decide between gas and brake can be frustrating and unsafe. If you find that the car is accelerating even when you aren’t pressing the gas, it is likely defective. Unusual Engine Sounds – The engine in your vehicle shouldn’t make engine sounds that are difficult to identify. A flat, grinding sound, ominous popping or knocking noise, or clunking or chirping can indicate a major problem inside the engine. Oil or Fluid Leaks – Unless your vehicle is leaving a trail of oil or coolant behind it everywhere you go, there is a problem. Major leaks underneath a vehicle should be checked immediately. It is common for fluids to collect underneath and drip, but it is also wise not to ignore other signs of problems. Check Engine Light – The check engine light can mean a number of things. A minor issue can cause the light to illuminate, or it could mean there is a serious mechanical failure. Never ignore the light, even if you do a scan and there are no visible problems. Electrical System Problems – The electrical system includes a number of systems in your vehicle. Radio issues, problems with the dashboard light, power locks that don’t work, and engine issues that lead to the car not starting at all can indicate electrical problems.
What to Do if Your Used Car is Lemon
If you are a Texas consumer and have purchased a used motor vehicle, it’s important to be aware that there are federal and state laws that may protect you if your vehicle is a lemon. When a consumer has a used motor vehicle with a defect that substantially impairs the vehicle’s use, value or safety, the lemon laws may provide the consumer with certain legal rights. Specifically, the Magnuson-Moss Warranty Act can potentially apply to defective used cars that are still under a manufacturer’s warranty. Also known as implied warranties, used car warranties are established by state law and these warranties may help consumers correct vehicles with major defects. Texas used car lemon law also applies in cases where an original manufacturer’s warranty was transferred from a used car to the next consumer. Additionally, the Deceptive Trade Practices Act may be of assistance to those who have suffered damages resulting from a lemon used car. It’s recommended that you first attempt to work with the used car manufacturer. Document all communications, including letters and phone calls, and do not attempt to repair the vehicle yourself. If your attempts with the manufacturer are unsuccessful, you may have the right to take your complaint to arbitration. Check with your state’s lemon law agency for instructions on how to proceed. In Texas, complaints can be filed through the State Office of Administrative Hearings (SOAH). SOAH will assign a judge to your case who will schedule a hearing and inform you of what documents you will need to provide. The judge will make a determination about your vehicle and its worth based on these documents and any evidence you present at the hearing.
Lemon Law Options for Used Car Owners
However, consumers can also submit their claims for arbitration under the Texas Lemon Law, which is a generally more consumer-friendly process. Under the alternative dispute resolution provisions of the Texas Lemon Law, consumers can submit a lemon claim to be resolved through an arbitration hearing with the manufacturer or dealer. The manufacturer has the option of having its representative in attendance at the hearing, as long as the representative has the full authority to make settlement offers.
Before arbitration is conducted , the consumer must be given informed consent of the consumer’s right to bring an action in a court of law. The burden of proof then shifts to the manufacturer to persuade the arbitrator that the consumer should not be entitled to relief sought.
If the claim is resolved favorably to the consumer, then at the conclusion of the hearing, the arbitrator will issue a one-page notification to the consumer and the manufacturer of the decision awarding or denying the requested relief.
Texas lemon law arbitrations give both sides a chance to present their case to a neutral party. However, Texas lemon law arbitrations are not binding, and either side may choose to file a lawsuit in court. However, the arbitrator’s decision may reveal the strength of the case and encourage the manufacturer to settle.
Hiring a Used Car Lemon Law Lawyer
Lemond Law observes:
My recommendation for all consumers pursuing a lemon law case is to hire an attorney who specializes in lemon law cases, especially for used vehicle lemon law claims. An attorney who does not specialize in lemon law cases typically does not understand the process necessary to make a claim with the appropriate State Lemon Law Board or with the manufacturer.
If you decide to hire an attorney, make sure the attorney handles lemon law cases on a regular basis and understands used vehicle lemon law claims. It is critical that an expert represents you in a lemon law case. Although a consumer can pursue a used vehicle lemon law claim on his own, the process is complicated and difficult to navigate. An attorney can guide you through the process and assist you with all of your claims. If you choose to proceed without an attorney, you will likely find it incredibly frustrating and time consuming.
A consumer should consider how an attorney bills for his or her services. Some lemon law attorneys charge an hourly rate for their work. Others will charge a flat rate fee or a contingency-based fee. A flat rate fee is usually the best option because the total amount will be known up front, but a consumer should also inquire as to how much additional time may be incurred and whether that additional time will be charged at the same flat rate.
If hired on a contingency fee basis, a consumer should ask how a firm justifies charging a contingency fee for lemon law cases since Texas lemon law limits are not entered by a Judge but instead are found by the State Lemon Law Board panel in a written decision.
Lemon Law Prevention Tips When Purchasing Used Cars
There are several steps you can take to reduce the risk of purchasing a lemon. First, you should always have an auto mechanic inspect the car before you buy it, especially if the vehicle is certified pre-owned. If you are not willing to pay the fee for your trusted mechanic to perform an inspection, you should be looking at cars from a dealership, which owe you a duty of care to sell you a reliable car.
If you are buying from someone you don’t know and they will not let you investigate the car, you should walk away. No matter what the deal. Sure, you may get lucky and drive away with a lemon that is not detected, but you run the risk of spending thousands on repairs, buying another used car and losing all your money and ultimately still buy a lemon you did not know about.
Second, understand the warranties being offered. Even if the dealership is not willing to give you a warranty, or if the vehicle has no warranty, you should still ask if the vehicle was a rental previously, or a part rental and part owner car. Many rental cars offer warranties and you may be able to take over the rental warranties.
Finally, always check the vehicle history report. While the information on these reports can be spotty, it can still be a useful tool in finding a lemon. One thing that has proven to be very accurate on these reports is if the car has been in a reported accident. Typically it takes a pretty good rear-end collision to set off those sensors, rendering the airbag useless, which occurs in those accidents. If you get a report that shows a reported collision and the airbags were not deployed, you may want to avoid that vehicle. Also, if you are geeking out on the vehicle and get the report showing 3000 miles on a vehicle in the four months prior to purchase, you should be skeptical.
Buying a used car can be a great way to save money, but make sure to take some time and follow these suggestions to help avoid a lemon.
Recent Revisions in Texas Lemon Law
The Texas Legislature amended the TX Lemon Law in 2011 and 2015. The most significant change relates to how the statute of limitation period is calculated. Under the new rules, suits must be filed within 2 years of the vehicle’s delivery date. A vehicle’s delivery date is the date of first use or the date of sale to the first end consumer, whichever comes first. Most Texas Dealers supply a manufactured window sticker that contains the vehicle’s original in-service date and the dealer’s first sale date (if the vehicle was sold new by the dealer). The dealer’s first sale date is usually much later than the in-service date. Many believe the latter date is the correct starting point for the statute of limitation analysis. However , the Texas Attorney General has determined that the former, i.e. the vehicle’s in-service date is the correct starting point for the statute of limitation calculation. This conclusion will require that suits against some dealers be filed sooner under new law than was required under the previous law. Other changes made by the 2011 and 2015 amendments to the Lemon Law include expanding the statute’s coverage to include repurchased vehicles and trial vehicles that have not been had their defects fully repaired.