“Lemon law” seems to be a generic term for the body of law relating to mechanic problems and defects relating to vehicles. However, in its strictest sense, the term “lemon law” only applies to brand new vehicles. Like most states’ lemon law statutes, the North Carolina lemon law statute (N.C.G.S. § 20-351. et seq.) only covers new vehicles. This means you must be the first registered owner of the vehicle in question. North Carolina’s lemon law statute can be a bit difficult to decipher and determine how to apply.
Generally speaking, North Carolina law states if your new vehicle has (1) been in for warranty-related repairs on at least 4 separate occasions for the same issue/defect or (2) been in for repairs for at least 20 business days in any 12-month warranty period, your vehicle is deemed a lemon. The problems with your vehicle must be material or major—no cosmetic defects or things that do not seriously affect the operation of your vehicle—and the problems must begin within the first 24 months or 24,000 miles of your ownership of the vehicle. The frustrated vehicle owner who has met the required number of service attempts or days without use of the vehicle may be able to obtain either a refund or a replacement vehicle. The lemon law statute also allows a vehicle owner to show that the nature and frequency of the problems with the vehicle render it a lemon and entitle the owner to replacement or a refund. Along the way there is documentation to be obtained/retained and notices required to be provided and negotiation will likely come into play. Possibly even arbitration. But if all that fails and the vehicle owner has a legitimate case, litigation (a/k/a filing a lawsuit) would be required.
Now let’s chat for a minute regarding the situation with used vehicles in North Carolina. We already established that used vehicles do not qualify for protection under the North Carolina lemon law statute. There are, however, some claims potentially available to the aggrieved used vehicle owner.
First and foremost, if the seller of the vehicle provided a warranty this is a first line of defense. Let us be clear—all warranties are not warranties. Often when people purchase vehicles they pay additional money for a product that dealers often refer to as “an extended warranty” or “third party warranty”. These products are not warranties in the strict legal sense of the word. These products are more appropriately called vehicle service contracts because they look and work more like insurance policies. The cost of vehicle service contracts is usually included in the vehicle payments made by the consumer. With a vehicle service contract the vehicle owner may or may not have to take the vehicle back to the selling dealer for mechanical problems or defects—depends on the terms of the contract. And with vehicle service contracts the vehicle owner often has to pay a deductible each time the vehicle goes in for repairs. One of the major complaints about vehicle service contracts is that they are riddled with exceptions and exclusions such that some repairs or problems are not even covered. This leaves the vehicle owner frustrated with the vehicle and their vehicle service contract. Now back to our discussion of true warranties….
Preferably the warranty from the seller is in writing because oral warranties are always hard to prove and may not be sufficient enough to merit spending the time and money to enforce. If the seller provides a written warranty this is called an express warranty. An express warranty is merely a promise to pay for or otherwise be responsible for issues that may arise with certain components of a vehicle. Most express warranties have a duration or time limitation after which they expire. It is important that a used vehicle owner notify the seller of any vehicle problems as soon as possible after they occur.
When a seller provides an express written warranty it automatically means the used vehicle owner also has the benefit of implied warranty protection. Implied warranties cannot be excluded—but can be limited—-if you are provided a warranty or a vehicle service contract. Implied warranties can only be excluded if the vehicle is sold “as is” with no warranty AND a clear written disclaimer of implied warranties is provided to the customer at the time of the transaction. The primary purpose of the Buyer’s Guide sticker found in the windows of many vehicles is to make clear if the seller is offering a warranty on the vehicle.
There are two implied warranties—the warranty of merchantability and the warranty of fitness for particular purpose. The warranty of merchantability essentially says that the used vehicle will do what vehicles are supposed to do—operate safely on the roads and highways—but this is not an absolute guarantee that the vehicle will experience no problems whatsoever. The implied warranty of fitness for a particular purpose is a promise a seller makes when a customer specifically relies on the seller’s advice that the vehicle can be used for some specific purpose—ex: a person needing a truck with certain hauling power or payload capacity. The implied warranty of fitness for a particular purpose is established in rare situations so the implied warranty of merchantability, which is much broader in scope and far more commonly created, is more advantageous to the consumer.
When the used vehicle owner has a written warranty and the vehicle has exhibited problems, the owner has a duty to present the problems to the seller’s attention and offer the vehicle to the seller for the necessary repairs. One key is documentation: obtaining and keeping copies of all repair estimates and receipts, sending written notice to the seller of the vehicle problems. Sometimes there may be a need to send a written demand to the seller to repair the vehicle. The handling of used vehicle issues can be a bit murky to navigate as the relevant principles are a combination of warranty law, contract law, and various federal and state consumer statutes. So used vehicle owners who are frustrated with their vehicles definitely benefit from consulting an experienced consumer lawyer.
This article is a very quick and broad overview and there is far too much information to summarize here or to provide a “how to guide” for consumers. Know that there tools in place to help owners of true lemons to recover damages and even used vehicle owners may have options for recovery. Trying to save money and self-manage your vehicle problem/defect case will likely result in more frustration and more money spent in the long run. Now that’s pretty sour. Trust me when I say that if you or someone you know is having a problem with a vehicle it really does pay to consult with an experienced lemon law or consumer law attorney.