Don’t Get Squeezed by a Lemon: North Dakota’s Lemon Laws

It seems that new cars are becoming more and more expensive. The cost of steel keeps going up and with tariffs imposed on much of the foreign steel making its way to the United States, that trend does not seem to be ending anytime in the future. Other costs, delivery fees, dealership fees and the like are also going up. So a new car can be an investment (depending on resale value) for several years. Many people in our state are able to purchase new cars right off the lot or directly on order from the manufacturer.

But what happens if that new car does not perform as advertised? What if it is constantly in the shop, being fixed for things that impair its use? What if your thoughts of resale are going down? Can you get your money back for the car, even if it is a few months old? This is where North Dakota’s so-called “lemon law” comes in.

So what is a “lemon law” anyway? Well, you may have heard the phrase “that car is a lemon,” meaning that it was susceptible to problem after problem, repair after repair, none of which seemed to cure the car’s problems.
Beginning in 1985 the state legislature recognized that some cars were just manufactured bad. This may have been during a time when there was much less automation in the process. But nevertheless, our legislature found that it was enough of a problem back then that it needed to enact a law to protect consumers.

The law states that if a new car does not 1) conform to all express warranties, and 2) you as the consumer report to the manufacturer or dealer the problem during the term of the warranty (or within one year of original delivery, whichever is less), then the manufacturer or dealer must make the repairs necessary to conform the car to the express warranties, even if the repairs have to be made outside the warranty period.

If the manufacturer or dealer is unable to make the car conform to warranties by repairing defects that “substantially impairs” the use of the vehicle after “a reasonable number of attempts” (which means more than three repairs or out of service for 30 days, whichever is less) then the consumer has two decisions. You can either 1) accept replacement of the car with a comparable car, or 2) accept a refund of the car’s price after you return it minus a reasonable allowance for the use of the car, not exceeding $0.10 cents per mile.

There is a number of caveats to all of this. First, if you elect to proceed under the lemon law then you are foreclosed from any other remedy. That means you cannot sue the manufacturer or dealer for the bad car. Second, there is a strict time limit under which you can bring a “lemon law” claim. An action must be started within six months of either the expiration of the warranty term or eighteen months after the date of original delivery of the car to a consumer. Third, a person cannot sell or lease a car that was returned under the “lemon law” unless strict reporting and warnings are give to purchasers. Last, if the manufacturer has established alternative dispute resolution methods, you may be required to go through that process before you can make a claim.

As consumer protection laws go, North Dakota’s “lemon law” is useful to consumers who have just bought a car full of problems. Don’t be afraid to demand that the manufacturer and dealer abide by the law if you think you have a lemon. Just don’t try to make lemonade yourself!
 

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Joseph Wetch is a Fargo, ND lawyer practicing in all North Dakota, Minnesota and South Dakota courts. Contact him at 701-232-8957 or jwetch@serklandlaw.com.