New Car Lemon Law
What is the New Car Lemon Law?
A new vehicle that was purchased, leased or registered in New York State for personal use and which shows a serious problem or defect that is not corrected after four or more repair attempts, or is out of service due to repair for at least 30 days, within the first 18,000 miles or two years (whichever comes first), may be eligible for the Lemon Law Arbitration Program. If successful, the consumer will be entitled to either a full refund of the purchase price or a comparable replacement vehicle.
What are the specific requirements to qualify for New Car Lemon Law?
To qualify, all of the following must be true:
- The car was covered by a lemon-law warranty when you first received it.
- The dealer bought, leased, or transferred the car before it had 18,000 miles, or the dealer first received the car less than two years ago.
- The car was bought, leased, or transferred in New York state or is currently registered in New York state.
- The car has been used mostly for personal purposes.
In addition, your car’s manufacturer must try a certain number of times to fix your car for any defect covered by the warranty, free of charge.
You may be able to get a refund or replacement for your car if either of the following is true:
- The manufacturer cannot fix your car after four repair efforts.
- You are unable to use your car for a total of at least 30 days while the dealer is fixing it.
Are motorcycles or motor homes covered under the New Car Lemon Law?
Motorcycles are covered under the New Car Lemon Law and follow the same guidelines, requirements and timelines as would a new car.
Motor homes are covered under the law, except for defects in systems, fixtures, appliances, or other parts that are residential in character. Some items that are excluded from coverage: flooring, plumbing system and fixtures, roof, air conditioner, furnace, generator, electrical systems other than automotive circuits, side-entrance door, exterior compartments, and windows other than the windshield and driver and front passenger windows.
The law defines a motor-home manufacturer to include not only the manufacturer but also the assembler of the component parts of the motor home, including the chassis, engine, and residential portion. The assembler may be the dealer.
There are special-notice requirements with motor homes. According to these requirements, you must notify the motor-home manufacturer (which may be the dealer) earlier about your repair attempts or inability to use the vehicle than you do for a regular car.
Can I still file a claim if my car was fixed?
If you have met all the other legal requirements, you may still be entitled to relief under the law, if either of the following is true:
- A defect remained even after the fourth repair attempt.
- Because of the defect, you were unable to drive the car for a total of 30 days or more, even if the defect was subsequently repaired.
For example: Your car had a defective transmission that could not be fixed after four repairs. The fifth repair fully fixed the problem. You are still considered to have made a reasonable number of repair attempts and you may be entitled to relief.
What happens if you win your case?
List of Services
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Repurchase / RefundList Item 1
If you win your case, you may be entitled to a full repurchase / refund. Your vehicle would be repurchased by the manufacturer and you would recieve a full refund.
The refund should include:
- The price of the car (cash plus trade-in allowance), including all options; and
- Title fees, licence/registration fees and any other governmental charges; less any lawful deductions* and an offset for mileage.**
*Lawful deductions include any other expenses or charges, such as loss of use, insurance premiums, and finance charges.
**The mileage deduction is calculated by multiplying the purchase price of the vehicle by the number of miles currently on the vehicle in excess of 12,000 and dividing by 100,000. If the vehicle has less than 12,000 miles at the time of award, no deduction is taken.
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Replacement
If you win your case, you may be entitled to a replacement vehicle. Your current vehicle would be replaced by the manufacturer and you would recieve a different vehicle of comparable make, model and mileage*.
*If the replacement vehicle has a higher MSRP than the vehicle being replaced, you may be required to pay the difference, depending on financing options, original trade-in value and other factors.
Financing vs. Leasing a New Car
List of Services
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FinancingList Item 1
The refund you will receive from the manufacturer is the same, whether the car was financed or paid for in cash at time of purchase. However, if the car is financed, the refund is divided between you and the lender (the bank or finance company). The lender will calculate how much you still owe and apply its part of the refund to that amount. The balance of the refund then goes to you*.
*There can be instances in which you may owe the manufacturer to comply with the award. This can happen if you had a large amount of negative equity on a prior trade-in or if the deduction for mileage exceeds the amount of payments you have made so far.
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Leasing
If the car is leased, the refund due from the manufacturer is divided between you and the leasing company. Your refund is the total of your downpayments (including any trade-in allowance), plus the total of the monthly lease payments you have already made, minus interest charges and any other service fees.
For example: You leased a new car under a three-year lease, with a $1,500 downpayment, and pay a monthly lease payment of $300. Of the $300 monthly payment, $100 is allocated as interest charges. After you make 12 monthly payments, you are granted a refund under the lemon law:
Deposit $1,500
Monthly payments (12 x $300) $3,600
Interest (12 x $100) (-$1,200)
Total refund $3,900
The refund will be $3,900.
If the monthly payment includes other service fees, such as insurance or other costs that are paid for your benefit, these amounts will also be deducted from your refund.
The leasing company’s portion of the refund is the balance of the lease price, as that term is defined by the law.*
*Your lease agreement will be terminated if you win your case. However, you should continue to make any monthly lease payments as required under the lease agreement until the lease is paid off by the manufacturer to avoid late charges and/or negative credit reporting.
Ready to File or Still Have Questions?
To file a claim, click on the below file button to be redirected to the claim form. If you have any additional questions, you may reach out to NYSDRA's Lemon Law program manager directly at lemonlaw@nysdra.org. You may also complete the Contact Us form via the below button. When completing the form, please be sure to select Lemon Law as your area of interest. We also encourage you to review the below program FAQ which answers additional questions about the Lemon Law program and case management process.
