Topic:
WARRANTIES; MOTOR VEHICLES; LEMON LAWS; CONSUMER PROTECTION; STATISTICAL INFORMATION;

OLR Research Report


November 30, 2005

 

2005-R-0871

LEMON LAWS FOR USED CARS IN CONNECTICUT, MASSACHUSETTS, AND NEW YORK

By: Daniel Duffy, Principal Analyst

You asked for a comparison of the lemon laws for used cars in Connecticut, Massachusetts, and New York.

SUMMARY

Connecticut's used car lemon law requires motor vehicle dealers to provide express warranties to consumers who buy used cars costing $3,000 or more. If the vehicle sold for more than $5,000, the warranty must last 60 days or 3,000 miles. The warranty must provide coverage for all parts and labor required to keep the vehicle mechanically operational and sound. Massachusetts' law requires dealers to provide warranties on all used cars sold for more than $700 and with less than 125,000 miles. If the vehicle had less than 40,000 miles when sold, the warranty must last 90 days or 3,750 miles. The warranty must provide coverage for all parts and labor that affects a vehicle's safety or use. New York's law requires dealers to provide warranties on all used cars sold for more than $1,500 and with less than 100,000 miles. If the vehicle had less than 36,000 miles when sold, the warranty must last 90 days or 4,000 miles. The warranty must provide coverage for certain specified components like the engine and transmission. All states provide a time or mileage minimum for warranties, whichever occurs first.

MAJOR FEATURES

Table 1 presents the major features of the three state laws: warranty term, warranty coverage, right to return, and dispute resolution.

Table 1: Major Features of Used Car Lemon Laws

State

Maximum Term

Coverage

Right to Return

Dispute Resolution

Connecticut

60 days or 3,000 miles if vehicle is sold for $5,000 or more

All parts and labor to keep vehicle mechanically operational and sound

None

None

Massachusetts

90 days or 3,750 miles if vehicle has been driven less than 40,000 miles when sold

All parts and labor to repair a defect that affects a vehicle's safety or use

After three attempts to repair the same defect or after the vehicle has been out of service for repair for more than 10 business days during the coverage period

State-certified arbitration program operating in accordance with state regulations for used vehicle arbitration

New York

90 days or 4,000 miles if vehicle has been driven less than 36,000 when sold

Certain specified components, including the engine, transmission, drive axle, brakes, radiator, steering, and ignition system excluding the battery

After three attempts to repair the same defect or after the vehicle has been out of service for repair for more than 15 business days during the coverage period

Dealer informal dispute resolution procedure that complies in all respects with regulations implementing the federal Magnuson-Moss Warranty Act

CONNECTICUT (CGS 42-220 TO 42-226A)

Connecticut's “Used Car Lemon Law” was adopted in 1987. Although amended several times, its major provisions have remained substantially unchanged. It requires motor vehicle dealers to provide express warranties to consumers who buy used cars costing $3,000 or more. It prohibits a dealer from excluding, modifying, disclaiming, or limiting implied warranties.

Warranty Term

The warranty term is based on the vehicle's selling price. The warranty must last 30 days or 1,500 miles if the selling price is at least $3,000 but less than $5,000 or 60 days or 3,000 miles if the selling price is $5,000 or more. Warranty periods must be extended for the time the vehicle is in the dealer's possession for repair.

Warranty Coverage

The warranty must cover all parts and labor but need not cover damage due to accidents or misuse. The warranties must provide that the vehicle is mechanically operational and sound and will remain so for the coverage period. It requires a dealer to honor the warranties even if the warranty period has expired as long as the consumer has notified the dealer of the problem during the warranty period. A warranty may be waived by the consumer, but only if the waiver is for a specific defect disclosed by the dealer.

The law prohibits a dealer from limiting warranties by using phrases like “fifty-fifty,” “labor only,” “drive-train only,” or similar words attempting to disclaim responsibility.

Related Provisions

In addition to establishing minimum statutory warranties, the law (1) prohibits dealers from making any false, misleading, or deceptive statements about a used motor vehicle's condition or history and (2) requires dealers to put any promises to repair a vehicle that are made in connection with a sale in a written statement attached to and made part of the sales contract.

It requires a dealer to disclose in a motor vehicle purchase contract that a used vehicle has been declared a “constructive total loss” if (1) the vehicle's certificate of title is stamped “totaled” or with a comparable designation, (2) the bill of sale states that the vehicle has been declared a total loss, or (3) the dealer has been told that the vehicle has been declared a total loss by its seller or a lender holding its title.

The law gives a consumer the right to have a vehicle inspected before the sale, but the dealer has the right to establish reasonable conditions for the place, time, and length of the inspection.

Exclusions

The law does not apply to sales (1) of vehicles with a cash purchase price of less than $3,000, (2) between dealers, or (3) of vehicles seven or more years old.

Penalty

A dealer who violates these provisions may be punished by the motor vehicles commissioner by (1) license suspension or revocation, (2) imposition of a civil penalty of up to $1,000, (3) requiring the dealer to post a $1,000 bond.

MASSACHUSETTS (12 M.G.L.A. 90 7 1/4)

Massachusetts requires all dealers to provide express warranties when selling a used motor vehicle and establishes a consumer's right to return a vehicle and obtain a refund if the dealer cannot make a vehicle conform to the warranty after a reasonable opportunity to repair it.

Warranty Term

The term of the warranty is based on usage. A warranty must last: 90 days or 3,750 miles if the vehicle has been driven less than 40,000 miles, 60 days or 2,500 miles if the vehicle has been driven at least 40,000 miles but less than 80,000 miles, and 30 days or 1,250 miles if the vehicle has been driven at least 80,000 miles but less than 125,000 miles. Warranty periods are tolled for an amount of time that the vehicle is out of service for repair.

Warranty Coverage

The warranty must cover the full cost of parts and labor to repair a defect that affects the vehicle's safety or use, except that the warranty may require the consumer to pay up to $100 toward a repair. It also establishes minimum warranties based on a vehicle's age if its true mileage is unknown.

Standard for Returning a Vehicle

If the dealer fails to repair the same defect within three attempts, or if the vehicle is out of service for repair for more than 10 business days during the warranty period, then the dealer must accept its return and refund the full purchase price, less a reasonable allowance for use calculated at 15 per mile driven. The time counted toward the 10-day deadline is tolled for the amount of time, up to 21 days, the dealer takes to acquire a necessary part, if the dealer has ordered the part.

The law gives the consumer the choice to keep a returned vehicle until he has been given a full refund.

The law requires consumers to return the vehicle by giving it to the dealer within five days after the warranty period expires and telling the dealer about the defect. When the dealer returns a repaired vehicle to the consumer, he must give the consumer a receipt describing the defect, the repair, and the parts replaced.

Arbitration

The law requires dealers to agree to state-certified used car arbitration if the consumer requests it to assert his right to return the vehicle and receive a refund. The arbitration must be performed by a professional arbitrator and operate in accordance with state used car arbitration regulations. Arbitrators must submit their findings within 45 days of receiving a consumer's request for arbitration.

If an arbitrator rules against a dealer, the law requires him to either accept the return of the vehicle and provide a refund or appeal the decision within 21 days. An appeal must be accompanied by a bond equal to the money awarded by the arbitrator plus $500 for anticipated attorneys' fees, payable to the consumer. The law allows a court to vacate an arbitrator's award only if (1) it was procured by corruption, fraud, or other undue means; (2) there was evident partiality by, or corruption in, an arbitrator or misconduct prejudicing a party's rights; or (3) the arbitrators exceeded their powers. In addition to any other recovery, the law allows consumers dissatisfied with an arbitrator's ruling to file a claim under the state's unfair or deceptive trade practices act.

Exclusions

The law does not establish a required warranty for vehicles driven for more than 125,000 miles and exempts vehicles sold for less than $700.

Penalty

A dealer who fails to meet the 21-day deadline to comply or appeal an arbitrator's decision may be fined $50 per day until he provides the refund up to a maximum of $500. The law requires the attorney general to sue the dealer if the refund is still unpaid after 81 days. A dealer's failure to comply with the law is an unfair trade practice.

The law establishes an affirmative defense that an alleged defect: (1) does not impair the vehicle's use or safety; (2) is (a) the result of owner negligence or abuse, (b) damage caused by accident or vandalism, (c) the result of an attempt to repair by someone other than the dealer or manufacturer's representative; (3) is the result of the owner's modifications; (4) is covered by a manufacturer's warranty.

Sales between Private Parties

The law requires private sellers of used cars to disclose all known defects that impair the vehicle's safety or substantially impair its use. Failure to do so entitles the buyer, within 30 days, to rescind the sale and be entitled to a refund, less 15 per mile of use. In any subsequent suit initiated by the buyer, the court must award reasonable attorneys' fees and costs if it finds that a settlement offer was unreasonable or that the seller has otherwise failed to comply with this requirement. It must award the seller reasonable attorneys' fees and costs if it finds that the buyer's suit was frivolous or not in good faith. It is an affirmative defense that an alleged defect does not impair the vehicle's safety or substantially impair its use, or that it is the result of the buyer's negligence, abuse, damage caused by accident, vandalism, or attempt to modify.

NEW YORK (GEN. BUS. LAW 198-B)

New York establishes a consumer's right to return a vehicle and obtain a refund or replacement if a dealer cannot make a vehicle conform to its warranty after a reasonable number of repair attempts and establishes an arbitration procedure.

Warranty Term

The term of the warranty is based on usage. A warranty must last: 90 days or 4,000 miles if the vehicle has 36,000 miles or less; 60 days or 3,000 miles if the vehicle has been operated more than 36,000 miles but less than 80,000 miles; and 30 days or 1,000 miles if the vehicle has been operated 80,000 miles or more but less than 100,000 miles.

Warranty Coverage

The law requires dealers to provide a written warranty when selling a used motor vehicle that covers certain specified components, including the engine, transmission, drive axle, brakes, radiator, steering, and the

ignition system excluding the battery. The warranties may exclude defects due to lack of maintenance, collision, abuse, theft, vandalism, and other specified causes including odometer tampering.

Standard for Returning a Vehicle

A consumer may return the vehicle and obtain a refund if a dealer cannot repair a defect that substantially impairs the vehicles value after (1) the same defect has been the subject of repair three or more times and it has not be corrected or (2) the vehicle has been out of service for repair for 15 days during the warranty period. Days when the dealer cannot make the repair because parts are unavailable do not count toward the deadline if the dealer is exercising due diligence to obtain the parts. But a consumer is entitled to a refund or replacement vehicle if the vehicle has not been repaired after 45 days.

Notification of Rights

The law requires dealers to give buyers a notice entitled, “Used Car Lemon Law Bill of Rights.” The notice describes a consumer's rights under the law. The law makes void any waiver of rights signed by the consumer. Further, the law does not limit in any way a consumer's rights under other laws.

Informal Dispute Resolution

If a dealer operates or participates in an informal dispute resolution procedure that complies in all respects with regulations implementing the federal Magnuson-Moss Warranty Act, a consumer must use the procedure before enforcing his rights to return a vehicle and receive a refund. A dealer has 30 days to comply with an arbitrator's order. If he fails to do so, a consumer, in addition to other recovery, is entitled to $25 per business day up to a maximum of $500.

Penalty

If the motor vehicles commissioner determines that a dealer failed to comply for over 60 days, he may suspend or revoke his registration.

A consumer who resorted to an informal dispute resolution procedure is not precluded from asserting other legal rights. In suits to enforce this law, the court may award reasonable attorney's fees to a prevailing plaintiff or to a consumer who prevails in any judicial proceeding arising out of arbitration.

Exclusions

The law does not establish a required warranty for (1) vehicles operated more than 100,000 miles (2) sold for less than $1,500, or (3) “historical vehicles” as defined in the New York motor vehicle code.

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