Arkansas Lemon Law Rights Consumer Guide

Lemon vehicles in Arkansas can get the squeeze by either the Arkansas Lemon Law, the Magnuson-Moss Warranty Act (the federal lemon law), or both. Lemon-aid may include a refund, replacement or diminished value and/or incidental and consequential damages. Attorneys’ fees are also available meaning qualified consumers may receive Arkansas lemon law attorney representation at no cost.

And even if your vehicle is too old or has too many miles to qualify under either of these lemon laws, the Truth in Lending Act and/or other related car buying laws may provide an avenue to recover cash damages that can help you trade out or pay for repairs.

Connect here for a free, no obligation Arkansas Lemon Law case review. In most instances to qualify under a lemon law your vehicle must only have an unreasonable repair history under the warranty, including (but not limited to) 3-4 repair attempts for the same problem, 6 repairs total on the vehicle, or 30 days out of service by reason of repair.

This guide represents the Consumer Protection Division’s interpretation of the Arkansas New Motor Vehicle Quality Assurance Act (Act 297 of 1993, the Arkansas Lemon Law). This guide is just that, a guide. If you have a question or are uncertain about a particular aspect of this law, contact an Arkansas Lemon Law Attorney. Original booklet prepared by Clifford P. Block.

Any consumer who buys or leases, and registers a new motor vehicle in the State of Arkansas is covered by the Lemon Law.

The consumer is protected during the term of the manufacturer’s warranty for up to two (2) years after the original delivery date of the vehicle OR for the first 24,000 miles, whichever occurs last. If the vehicle is transferred to someone else during this period, that owner or person leasing the vehicle is also covered under the Lemon Law.

IMPORTANT: The Arkansas lemon law on new cars does NOT cover the living quarters of mobile homes. The Lemon Law does NOT cover vehicles over 10,000 pounds gross vehicle weight rating. However, motor homes over 10,000 pounds gross vehicle weight rating are covered.

The law creates what is known in legal terminology as a presumption; the Lemon Law presumes that you are entitled to a refund or replacement if the manufacturer or its dealer has made a certain number of unsuccessful attempts to repair nonconformities that substantially impair the use, value or safety of your vehicle (four or more repair attempts, or more than 30 days out of service).

However, there is an exception (or in legal terminology, the presumption is rebuttable). If the manufacturer can prove that it has not had a reasonable opportunity to repair your car, you may not be entitled to a refund or replacement vehicle. For example, if the manufacturer can prove that the number of repair attempts was not unreasonable because you did not follow the terms of the warranty, or some event (such as a labor strike) prevented timely repairs, the Lemon Law might not help you. In addition, if you abused the car or damaged it in an accident, the Lemon Law might nor apply.

Dangerously defective vehicles may be returned in an even shorter period of time. If the problem involves a defect that is likely to cause death or serious bodily injury (such as brake failure or a steering wheel that locks) the Lemon Law may apply if the problem is not promptly corrected after the second attempt.

It is very important that you report any defect or condition directly to the manufacturer or to the dealer immediately. It is also important that you keep all repair receipts and a complete record of all contacts with the manufacturer and dealer.

You have the right to receive a dated, detailed statement each time the vehicle is returned for repair. This statement should include any charges for parts and labor, a general description of the problem, the odometer reading at the time you brought the vehicle in for repair and also when you pick up the car, as well as a list of all work performed. It should also state the date the vehicle was brought in for repair and the date you picked up the vehicle. Be sure you are given these statements (it’s the law) and that you keep them on file. A chart is provided below for your convenience.

Who pays? Most manufacturers’ warranties on purchased vehicles cover repairs for at least the first year following the original delivery date or the first 12,000 miles, whichever comes first.

If repairs are needed after your warranty has ended, you must pay for the repairs. Check your warranty booklet to find out the details of your particular coverage. If you are leasing a vehicle, check your leasing contract to find out who is responsible for repair bills.

Repair costs to cure defects that occurred while under the warranty coverage should be covered by your warranty, or if later proven to be a “lemon” under the law may be reimbursed. For this reason, remember to keep your receipts.

How long should the repair take? The Lemon Law allows the manufacturer a “reasonable number of attempts” to repair or correct the defect. A “reasonable number” means three (3) repair attempts for the same defect or a total of 30 cumulative days out of service because of a series of defects or repairs. Also, a “reasonable number of attempts to repair” may consist of five (5) or more attempts, on separate occasions, to repair varying nonconformities that together substantially impair the use and value of your vehicle.

Final repair attempt. Before you can file a claim under the Lemon Law, you must give the manufacturer one final chance to repair the defect. You must send a letter to the manufacturer (not the dealer) by certified mail, return receipt requested, stating that you may have a claim and that you are giving the manufacturer one last chance to repair the defect. A sample letter is shown at the end of this guide.

This letter should be mailed after the third unsuccessful repair attempt. Consult your owner’s manual for address information.

Keep a photocopy of the letter for your records and your certified mail receipt as proof that the letter was received by the manufacturer.

After receiving your letter, the manufacturer has ten (10) calendar days to schedule a final repair attempt. If the manufacturer does not schedule the final repair attempt timely, or if the defect is not repaired within ten (10) days after the scheduled repair attempt, or you have a right to demand a replacement vehicle or a refund.

You must maintain a copy of your letter and the return receipt verification before you can file a claim under the Lemon Law.

Replacement – The manufacturer may offer to replace your original vehicle; however, you do not have to accept the offer. You may say NO and demand a refund.

If you do accept a replacement vehicle, and the original vehicle was financed by the manufacturer, its subsidiary or agent, the manufacturer must make sure that you are not required to enter into any refinancing agreement that would create any financial obligations upon you beyond those of the original financing agreement. It is still up to you to have the title and registration transferred to your new vehicle.

Refund For Purchased Vehicles – If you choose to receive a refund, you will receive the full purchase price of your original motor vehicle, minus a “reasonable allowance for vehicle use”.

The full refund includes, but is not limited to:

1. credits and allowances for any trade-in vehicle
2. costs of any options and other modifications added by the manufacturer or its authorized dealer
3. costs of sales tax, license and registration fees, and finance charges.
4. charges for renting a similar vehicle while the original vehicle was out of service because of the defect
5. expert fees and
6. charges for extended warranty coverage’s provided by the manufacturer, its subsidiary or agent.

“The reasonable allowance for vehicle use” equals the purchase price multiplied by the mileage at the time the vehicle was first brought to the dealer or manufacturer for repair of the defect divided by 120,000 miles. For example, the reasonable allowance for a $12,000 vehicle with 10,000 miles would be calculated as:

12,000 X 10,000 = 120,000,000
120,000,000 ÷ 120,000 = 1,000

In this example, the reasonable allowance for vehicle use is $1,000.

You may also be charged for any physical damage the vehicle has sustained.

Refund for Leased Vehicles – If your vehicle is leased, you can receive a full refund for any leasing fees less a reasonable allowance for vehicle use. Under the Lemon Law, your lease agreement ends when you return the vehicle. You cannot be charged any penalties for ending the lease early.

If the manufacturer does not accept your Lemon Law claim and will not refund your money or replace your vehicle, you must file for a hearing through the manufacturer’s informal dispute settlement program before you can use the Lemon Law in court, if the manufacturer provides notice to you that the program is available and if the program is certified by the Arkansas Attorney General.

You will not have to pay any fee to use the settlement program. Usually, you submit your complaint in writing to the program with copies for your records. Generally, your case must be decided within 40 days after the time your complaint is received. You may accept or reject the program’s decision. If you accept, the manufacturer must also accept and has 30 days to comply. There is no appeal process for the manufacturer.

If you do not agree with the program’s decision, you can reject it and go to court to assert your right to a replacement, refund or other relief. If you go to court, the judge may consider the program’s decision in deciding your case.

You are required to use the informal dispute program only if you want to use the Lemon Law’s standard of “reasonable attempts to repair”. You may have other causes of action or rights outside of the Lemon Law. It is a good idea to consult an attorney regarding these options.

If you win in the Manufacturer’s Informal Dispute Procedure or if your win in court, you can receive the following:

• refund of vehicle purchase price or leasing costs, including sales tax
• manufacturer or dealer installed accessories
• finance charges (if any)
• reasonable attorney’s fees
• reasonable costs of a rental vehicle while your vehicle is out of service because of the defect.

Yes, but the dealer or leasing company must give the consumer who buys such a vehicle a written notice stating that the vehicle was “returned to the manufacturer because of a nonconformity not cured within a reasonable time.”

On occasion, vehicles are repurchased by the manufacturer before there is any action under the Lemon Law. The written notice is not necessarily given to consumers who purchase these types of “buy back” vehicles. So, if you are purchasing a used vehicle, ask if it was repurchased by the manufacturer because it was involved in a Lemon Law dispute.

If your vehicle is defective:

• Give your dealer an opportunity to repair your vehicle
• Keep all repair receipts and a complete record of all contacts with the manufacturer or dealer.
• If substantial defects continue after three (3) repair attempts:
• Give the Manufacturer written notice of its last chance to repair the defect.
• If the substantial defect is not scheduled for repairs within 10 days after the manufacturer receives the written notice, or if repairs are not completed within 10 days after delivery for the final repair attempt:
• Demand a refund or a new vehicle.
• If the Manufacturer does not agree that you are entitled to a refund under the Lemon Law:
  1. File for dispute resolution through the manufacturer’s informal dispute resolution system.
  2. If you are still dissatisfied, contact an attorney regarding civil action in court.

IMPORTANT: Send this letter by certified mail – return receipt requested