Introduction

This chapter will discuss the three main laws that apply when an individual purchases either a new or used car, and then discovers, soon after purchasing it, that it is defective in some way: the Massachusetts (New Car) Lemon Law, the Lemon Aid Law, and the Used Vehicle Warranty Law. It will then detail the rights of consumers when it comes to auto repairs and towing. Finally, it will explain the role small claims court may be able to play after motor vehicle accidents.

Massachusetts (New Car) Lemon Law (MGL c. 90, 7N 1/2)

This law is intended to protect persons who buy new motor vehicles with substantial defects. It requires the dealer to repair any such defects and demands a refund, if, after a reasonable number of repair attempts, the defect persists.

What cars are protected under the new car lemon law? Any new car, motorcycle, van or truck bought in Massachusetts from a new-car dealer for personal or family purposes is covered by the Lemon Law for the `term of protection` of one year or 15,000 miles of use from the date of original delivery, whichever comes first.  The law also covers vehicles that are resold during the one-year or 15,000-mile term-of-protection, and new vehicles leased after July 1, 1997.

What is a Lemon? The law defines a “lemon” as a new motor vehicle that has defect(s) that substantially impair the use, market value, or safety of the vehicle and has not been repaired after a reasonable number of attempts.

What is a “Reasonable” Number of Repair Attempts? The Lemon Law defines this as:

Repair is attempted 3 or more times for the same substantial defect, and the problem persists or recurs within the term of protection.

OR

Repair attempts for any substantial defect or combination of defects total 15 or more business days, not necessarily all at one time.

What If the Defect Still Exists After a Reasonable Number of Repair Attempts?
The consumer must do the following:

Grant the manufacturer (not the dealer) one final opportunity of an additional seven (7) business days to fix any substantial defect. A notification of this final opportunity should be sent to the manufacturer/dealer by both certified mail and regular mail. Be sure to send it to the manufacturer’s regional and/or corporate office (or both).  You may get this address from the Office of Consumer Affairs and Business Regulation, (617) 727-7780. See sample letter at the end of the chapter.

After the 7 business days, if the defect has not been repaired (or has been repaired and the problem recurs), the consumer may return the vehicle to the manufacturer and demand either a refund or a replacement. A consumer has a right to reject the offer of a replacement vehicle and demand a refund, but does not have the right to demand a replacement vehicle if offered a refund.

Vehicles NOT covered by the New Car Lemon Law include:

•     auto homes
•     vehicles used primarily for off-road use (e.g. dirt bikes)
•     vehicles used primarily for business purposes
** Failure to comply with the Lemon Law is an unfair and deceptive act under the Massachusetts Consumer Protection Act, c. 93A, which may entitle you to double or treble damages, plus court costs and reasonable attorney’s fees. The buyer must begin by sending the manufacturer a 30-day demand letter.

The Lemon Aid Law (MGL, c. 90, 7N)

This law is intended to protect persons who have purchased vehicles that fail the state safety or emissions test. This law allows for a cancellation of the sales contract and a refund. It applies to private party sellers, as well as dealers. The Lemon Aid Law covers all motor vehicles purchased for immediate personal or family use, new or used.

What is a “Lemon” Under this Law? In order for a car to be covered under the Lemon Aid Law, the car must meet two requirements:

1. The vehicle must fail to pass the state safety and/or emissions test within 7 days of the date of sale. The failure cannot be caused by your negligence or abuse or by an accident that occurred after the date of sale.

2. The estimated cost of repair of safety and/or emissions-related defects must exceed 10% of the purchase price of the vehicle.

What Steps Must Be Taken to Comply with this Law? The Lemon-Aid Law requires that a number of things be done within a very short time of purchasing the vehicle, so it is important that callers with automobile cases be immediately called back and assisted with their problems. If a case falls under the category of the Lemon Aid Law, the buyer must:

1. Get a written statement, signed by an authorized agent at an inspection station, stating the reasons why the vehicle failed to pass the safety (or combined safety and emissions) test. This safety test must have been conducted within 7 days of the sale.

2. Obtain a written estimate from the inspector of the costs of the necessary emissions or safety-related repairs, showing that these costs exceed 10% of the purchase price.

3. Notify the seller of his/her intention to void the contract under the terms of the Lemon Aid Law, and do so by both regular mail and certified mail (return receipt requested). The buyer should enclose a copy of the written statement and a copy of the written estimate that he/she collected in steps 1 & 2.

4. Deliver the motor vehicle to the seller, even if it must be towed. Bring a witness, copies of (1) the notification letter, (2) the rejection statement, and (3) the estimate. If the seller refuses to accept the car, the consumer should sign a statement with a witness before a Notary affirming that the consumer did deliver the car to the seller on that date, but the seller refused to accept the car.

ALL OF THESE STEPS MUST BE COMPLETED WITHIN 14 DAYS OF THE SALE!!!

What Does this Law Give a Consumer in Return? If the above steps are taken within 14 days of the date of sale, then the customer is entitled to:

1. Cancel the Contract he/she signed for the car or motorcycle sale
2. Obtain a Refund from the dealer/private party who sold the motor vehicle to him/her.

What About Used Cars with Valid Inspection Stickers? Inspections stickers from previous owners are not transferable to new owners. This means that consumers who purchase used cars should always have the car inspected within 7 days of its purchase, even if the inspection sticker on the windshield is still valid. If the car fails the inspection test and repairs are estimated at greater than 10% of the purchase price, then this law will cover them.

Additional Information

Cars that do not run are considered to have failed inspection automatically (no written statement necessary). However, the owner must still prove that damages related to safety or emission defects total more than 10% of the purchase price!

In order to qualify for any refund, the damages related to safety or emission defects must total more than 10% of the purchase price. Buyers are not eligible for partial refunds if the defects total less than 10% of the purchase price.

The Used Vehicle Warranty Law (MGL, c. 90, 7N1/4)

This law is intended to protect persons who have purchased used cars. It requires that such persons receive a written warranty from dealers for a guaranteed period of time, as determined by the mileage of the car. **If it is possible to use the Lemon Aid Law, it is often quicker to do so.** Private party sellers are also required to disclose any known defects under this law. The buyer is entitled to a refund in such a case.

What does this Law Require of Car Dealers? Automobile dealers (defined as anyone who sells 4 or more cars in a 12 month period),  are required to do the following when selling used cars:
1.     Provide a Written Warranty to consumers, stating that the automobile is “under warranty” for a certain number of days/miles (depending on the mileage of the car at the time of purchase). The warranty period begins when the car is picked up from the dealer by the consumer. These required warranty periods are:

Mileage at purchase    Warranty period
(whichever comes first)
Less than 40,000 miles    90 days or 3750 miles
40,000 to 79,999    60 days or 2500 miles
80,000 to 124,999    30 days or 1250 miles
125,000 miles or over    No express warranty

2.     Repair Defects that impair the use or safety of the vehicle for as long as the vehicle is under the required warranty.
3.     Incur the Cost of These Repairs. The dealer must incur any and all costs associated with repairing the vehicle during the warranty period, but may legally require the consumer to pay up to $100 toward the total cost of all repairs (i.e. the consumer can be asked to pay, at most, $100 during the warranty period. The dealer must pay the rest).

** If the used motor vehicle’s true mileage is not known, the warranty period will be determined by the age of the used vehicle:

Age (x)    Warranty period
(whichever comes first)
3 years or less    90 days or 3750 miles
3 years > x > 6 years    60 days or 2500 miles
6 years or more    30 days or 1250 miles

** The vehicle’s age will be determined by subtracting the model year from the year in which the warranty holder purchased the vehicle.

Car dealers cannot ask consumers to give up their rights under the Used Vehicle Warranty Law. Some may try to do so; however, this is illegal, and even consumers who believe that they have “signed away” their rights under this law are still covered.

What if the Defects Persist? Although a dealer must repair all defects for the duration of the warranty period, there may be instances where the necessary repairs are so extensive and time consuming that the customer is not really getting his money’s worth! As long as the car is still under warranty, a customer has the right to a refund (less 15 cents per mile driven by the consumer since the purchase of the vehicle) if:

1.     The persisting defect(s) impair the vehicle’s use and/or safety

AND

2a. The vehicle was repaired 3 times for the same defect, and that defect persists or recurs within the warranty period

OR

2b. The vehicle was out of service by reason of repair for more than 10 business days (not necessarily all at one time) within the warranty period. The repairs need not be for the same defect – 5 days for repairing the brakes plus 6 for changing the transmission counts.

NOTE: The dealer may repurchase the vehicle without making repairs.

WARNING: If the dealer offers you a full refund under the law, and you refuse to accept it, YOU WILL NOT BE ENTITLED TO FURTHER WARRANTY REPAIRS UNDER THE WRITTEN WARRANTY PROVIDED BY THE DEALER. If you do not agree with the dealer’s calculation of the repurchase amount, you can ask the Office of Consumer Affairs and Business Regulation (OCABR) to help calculate it: 617-973-8787. If the OCABR determines that the full repurchase amount is higher than the amount offered by the dealer, the dealer may either offer you the amount determined by the OCABR or withdraw the offer to repurchase. If the dealer withdraws the offer, you will still be entitled to warranty repairs and can apply for arbitration, if you qualify.
** Failure to comply with the Lemon Law is an unfair and deceptive act under the Massachusetts Consumer Protection Act, M.G.L. c. 93A, which may entitle you to double or treble damages, plus court costs and reasonable attorney’s fees. The buyer must begin by sending the manufacturer a 30-Day Demand Letter.
What Does this Law Require of Private Party Sellers? The Used Vehicle Warranty Law requires private party sellers to tell buyers about all known defects before the buyer purchases the vehicle. Failure to do so will entitle the buyer, within 30 days after the sale, to rescind the sale and be entitled the return of all money paid (less 15 cents per mile driven by the consumer since the purchase of the vehicle).

What If a Buyer Discovers a Defect? If the buyer discovers a defect(s) that impairs the safety of the vehicle or that substantially impairs its use and can show that the seller knew about it and did not disclose it, the consumer may cancel the sale within 30 days of the purchase. The seller must refund the amount paid, less 15 cents per mile of use.

Are All Used Vehicles Covered by this Law? NO. There are some noteworthy exceptions to the Used Vehicle Warranty Law. If a vehicle meets any of these conditions:

Costs less than $700.
Has more than 125,000 miles on the odometer when sold/
Is a motorcycle, a moped, a dirt-bike, an auto home or an off-road vehicle.
Is a leased vehicle.
Is a vehicle used primarily for business purposes.

…it is not covered by the Used Vehicle Warranty Law. Such vehicles are, however, still covered by an implied warranty of merchantability (Uniform Commercial Code – MGL Chapter 106: Section 2-314), under which a product must do what it is designed to do with reasonable safety and ease for a reasonable amount of time.  “Reasonable” time will take into account the age of the vehicle, mileage on the vehicle, price paid and other factors.

Arbitration

Manufacturer sponsored arbitration: Many vehicle manufacturers offer their own in-house mediation, with manufacturers’ representatives and independent consumer advocates on the reviewing panels. Manufacturers’ “zone representatives” will investigate problems in an effort to resolve them. To access these programs, the client should contact the specific manufacturer’s zone or regional office for details. Manufacturers’ arbitration is not required to comply with the Lemon Law standards concerning repairs, timing, or refund or replacement. Therefore, in manufacturer-sponsored arbitration, the manufacturer may propose a resolution that is different from the resolution the Lemon Law would provide. For example, the manufacturer may offer to make additional repairs, extend the manufacturer’s warranty on the vehicle, or replace the vehicle with a different model.

Examples of Manufacturer-Sponsored Arbitration:
Ford Motor Company: Dispute Settlement Board (DSB), 1-800-428-3718. Any U.S. Ford automobile owner may use the DSB at no cost. The decisions of the Board are binding on Ford, but not binding on the consumer — if the client gets a bad decision, he can still take Ford to court.
Daimler-Chrysler: The National Center for Dispute Settlement, 1-800-992-1997.

Better Business Bureau (BBB) arbitration/AUTO LINE: The Better Business Bureau offers a “BBB Auto Line” arbitration program for most vehicles. Many manufacturers, such as Audi, BMW, Lincoln, Mercedes, and Toyota, use the BBB as their sponsored arbitration program. BBB arbitration is not required to comply with the Lemon Law standards. As in manufacturer sponsored arbitration, BBB arbitration may propose a resolution that is different from the resolution the Lemon Law would provide. It is also free and binding only on the manufacturer if the consumer accepts the decision. To file with the Better Business Bureau’s AUTO-LINE arbitration, the client can call 1-800-955-5100 or file an online request form at http://www.lemonlaw.bbb.org/.

State-certified arbitration is a very popular way of resolving disputes that arise under the above laws. The Office of Consumer Affairs is the state agency that operates the state-certified Lemon Law Arbitration Program. If the buyer and seller of the car are having trouble coming to terms on the car under the Lemon Law, the Lemon Aid Law, or the Used Vehicle Warranty Law, they may go to state- or court-sponsored arbitration instead of going to court.  Lemon Law arbitration is designed to be a speedy means of resolving auto disputes, AND since most cars cost more than the small claims monetary limit of $2000, arbitration may be a better option for many people than bringing a suit to District or Superior court. Lemon Law Arbitration is governed by the same rules as all other types of arbitration, so see Chapter 3 of this manual for more on arbitration.

To qualify for this arbitration program, the client must have done everything that is stated in the lemon laws, including, for new cars, giving the manufacturer a final opportunity to repair the defect. If the vehicle continues to have the same defect following the final repair attempt, or it recurs during the period that the Lemon Law applies, you may apply for Lemon Law arbitration.

New Car Lemon Law: To be accepted for new car arbitration, the request for arbitration must be submitted on the designated form and received by the arbitration firm or OCABR within 18 months of the date that the owner took possession of the car.

Used Vehicle Warranty Law: To be accepted for used car arbitration, requests for arbitration must be submitted within 6 months of the date that the consumer took possession of the motor vehicle (for used cars).

You must apply for arbitration on the official form provided by the Office of Consumer Affairs. You may go to state-certified arbitration even if you have previously gone to BBB or manufacturer arbitration, but not if you have previously gone to court. The arbitration hearing must generally be held within 44 days of the receipt of the request for arbitration, and the arbitrator must issue a decision within 45 days of the hearing. The manufacturer must either comply with the arbitrator’s order or file an appeal within 21 days of the arbitrator’s decision.  There is no fee for this arbitration.  For further information, contact the Office of Consumer Affairs, One Ashburton Place, 14th floor, Boston, MA, 02108, (617) 727-7780.

Filing a Claim is, of course, another way of resolving these disputes. Remember, though, the limit in small claims court is $2,000. Cases in which a plaintiff hopes to reap more than $2,000 must be filed through regular, civil court, and will require the assistance of an attorney.

Auto Repair

You take your car to the repair shop for a yearly tune-up, and when you go to pick up your car, you’re informed by the mechanic that you need new brakes, an alignment, and a paint job, none of which you expected and all of which will cost you about $1,500. Sound familiar? Well, Massachusetts law protects individuals from unfair treatment at the hands of auto mechanics. Failure of auto mechanics to comply with these laws qualifies as unfair or deceptive practices or acts. The laws applying in MA are:

Untrue Statements – a repair shop may not make any statements which it knows to be untrue, such as calling for unnecessary repairs, claiming the consumer’s car is in a dangerous condition when it is not, or telling the consumer repairs have been done when they have not.

Record Information – repair shops must record information about the customer and the car before beginning any work, including name, address, telephone number; the car’s makes, year, registration number, odometer reading; and the specific repairs requested or brief description of the problem to be fixed.

Written Estimates for All Repairs – a written estimate must be supplied by an auto repair shop and approved by the customer prior to repairs. If there is a charge for the estimate, the dealer must inform the customer of this charge prior to the verbal or written agreement authorizing repair, unless this charge is posted conspicuously. This law does not hold if the consumer brought his or her motor vehicle to the repair shop before or after its usual business hours, or, at the customer’s request, repair services are done off the premises of the repair shop.

Old Parts – the customer is entitled to any old parts that are replaced (i.e. if a muffler is replaced, the mechanic must actually give the old muffler to the customer, after which the customer can do what he chooses with it (including giving it back to the mechanic)).

Improper or Shoddy Repair Work – the repair shop must correct any improper or shoddy repair work at no additional cost to the consumer.

Repair Duration – a repair shop must complete work on a car the same day it is delivered unless the customer is notified to the contrary and consents to this delay.

Storage Costs – a repair shop can only charge storage costs for a vehicle if the consumer is informed before the charges begin to accumulate or if there is a sign posted conspicuously stating the conditions under which storage costs will be charged.

Use of Customer’s Car – a repair shop may not use a customer’s car for any purpose other than a test drive or delivery unless the customer consents in advance (Ferris Bueller, anyone?)

Itemized Bill –  the repair shop must provide an itemized bill upon completion of the work.

If any of the above laws regarding auto repair has been violated by a repair shop, and the consumer wishes to take legal action, he/she must first write a 30-day demand letter to the repair shop because it will fall under M.G.L. Chapter 93A of Consumer Law.  A dissatisfied customer may also wish to file a complaint with the Better Business Bureau by calling (508) 652-4800.

Auto Accidents

There are two possible claims that can arise out of auto accidents:

Property Damage/Damage to Vehicle – as a result of an auto accident, an individual’s vehicle was either “totaled” or sustained damages that needed repair OR other property was damaged as a result of the accident.

Personal Injury – as a result of an auto accident, an individual sustained bodily injury that forced him/her to receive medical attention or miss at least a day of work, for example.

In both cases, the registered owner of the vehicle driven by the driver causing the accident (i.e. the driver who was determined to be at fault, either by the police officer who wrote the accident report or (if no accident report was written) by the clerk magistrate after listening to both parties at the small claims hearing), can be sued in small claims court.

**Evidence that at the time of the accident or collision, the car was registered in the name of the defendant as owner shall be prima facie evidence that it was then being operated by and under the control of a person for whose conduct the defendant was legally responsible. An affirmative defense is the absence of such responsibility to be set up in the answer and proved by the defendant.

The monetary limit for these two types of cases, however, differs:

Property Damage/Damage to Vehicle – there is NO monetary limit for property damage caused by another vehicle. Plaintiffs may sue for as much as the damaged vehicle was worth at the time of the accident (i.e. its fair market value) or the cost of accident-related repairs. This is the only exception (other than double and treble damages) to the $2,000 monetary limit in MA small claims court.

Personal Injury – the ordinary $2,000 limit applies to these cases. Oftentimes the sum of all doctor’s bills and lost wages will be greater than this $2,000 limit. If this is the case, and the plaintiff wishes to sue for the entire amount in addition to pain and suffering, he/she must file a civil suit, usually with the help of an attorney.

Sample Notice of Final Opportunity to Repair
Your Home Address
Your Evening Telephone Number
Your Daytime Telephone Number
Date
Name of Manufacturer
Manufacturer’s Address
Dear Sir or Madam:
I believe that my car is a `lemon` under the Massachusetts Lemon Law (Massachusetts General Laws; c. 90 Sec. 7N 1/2). I am hereby making a written demand for relief under the Lemon Law and the Massachusetts Consumer Protection Act (Massachusetts General Laws, c. 93A, Sec.9).
I purchased a (make, model, year of vehicle) on (date) from (name of dealership) in (city, state). The vehicle identification number or VIN number is (vehicle identification number). Since I bought the vehicle, I have had to return it to the dealership a total of (number of times the vehicle was returned to an authorized dealer for repairs) times. My vehicle has been out of service for repairs for a total of (total number of business days the vehicle has been out of service being repaired) business days. My vehicle has been in (name of dealership) for repairs on the following dates for repair of the following defects:
(Date in/out) (List problems complained of)
(etc.) (etc.)
I am having the following problems with my vehicle at this time: (list all problems the vehicle currently has).
These remaining defects substantially impair the use, market value or safety of my vehicle. I am hereby allowing you one final repair opportunity. If these repairs are not completed within seven business days of receipt of this letter, I am entitled to a replacement vehicle acceptable to me or a refund calculated in accordance with the Lemon Law.
Failure to comply with the Lemon Law is a violation of Massachusetts General Laws, c. 93A, and you may be subject to double or treble damages as well as attorney’s fees and court costs if this matter is taken to court.
I look forward to hearing from you soon.
Sincerely,
Your Name

Additional Resources for Auto Law Information

CAR SMART: A Consumer’s Guide to Buying, Leasing, and Repairing a Car in Massachusetts
www.massconsumers.org/Carsmart2006/