Texas Lemon Law Rights Consumer Guide

The Texas Lemon Law statute and the federal Lemon Law (the Magnuson-Moss Warranty Act) provide for compensation to Texas consumers of defective automobiles and trucks and other vehicles and products including motorcycles, RV’s, boats, computers and other consumer appliances and products.

To qualify under the Texas lemon law on cars you must generally have a vehicle that suffered multiple repair attempts under the manufacturer’s factory warranty. Texas car lemon law compensation can include a refund, replacement or cash. 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.

You can learn more about the Texas lemon law definition and the Texas lemon law process from a Texas Lemon Law attorney and get a free Texas lemon law case review, or by reading the handy guide below on your Texas Lemon Law rights compiled by the Texas Attorney General and presented here by CarLemon.com, THE Texas automobile Lemon Law one stop infosource.

The Texas Lemon Law is a state law that helps consumers who buy or lease new motor vehicles and have repeated problems getting their vehicles properly repaired. The Texas Lemon Law statute can help a consumer get the vehicle repurchased, replaced or repaired. It can be less complicated and less expensive than going to court.

The Texas Car Lemon law was enacted by the Texas Legislature in 1983. A court challenge stalled enforcement of the law, but in 1985, a federal appeals court upheld its validity. In Texas, the Lemon Law is administered by the Texas Department of Transportation’s Motor Vehicle Division and its Motor Vehicle Board.

Through mediation and formal hearings allowed under the law, the Motor Vehicle Division has helped resolve many complaints. From 1988 to 1997, the division processed 12,282 complaints. In 1997, the division received 1,291 written complaints and held 182 hearings on complaints that were not resolved informally. In about half the cases heard in 1997, consumers received either replacement, repurchase or repair of their vehicles, or some other appropriate relief.

In 1991, the Legislature changed the Lemon Law to benefit more consumers. The time period for filing a complaint and the definition of a “lemon” were expanded, and consumers may now be reimbursed for certain incidental expenses. Now, a disclosure notice accompanying any vehicle repurchased or replaced under the Lemon Law is also required.

In 1997, the Legislature added towable recreational vehicles (TRVs) to the Lemon Law. Besides being made primarily for temporary human habitation, TRVs must

1. be titled and registered in Texas;
2. be built on a single chassis;
3. contain one or more life support systems, and
4. be towable by another motor vehicle.

The relief available to used motor vehicle buyers is limited to repairs only, if the vehicle is still under the original factory warranty.

What does it cover?
The Lemon Law applies to new vehicles, including cars, trucks, vans, motorcycles, all-terrain vehicles motor homes and towable recreational vehicles (TRVs) that develop problems covered by a written factory warranty. Demonstrator vehicles are also considered new vehicles.

The law does not cover used motor vehicles (including program vehicles), repossessed vehicles, non-travel trailers, boats or farm equipment. Neither does it cover vehicles with:

• problems caused by the owner’s abuse, neglect or unauthorized changes to the vehicle,
• parts or components not authorized or installed by the manufacturer, or
• problems that do not substantially affect the use or market value of the vehicle. Minor rattles or stereo problems are usually not considered serious under the Lemon Law.

When the term “manufacturer” is used, it should be understood to include distributor and converter, as well.

A motor vehicle may be declared a lemon if it meets all of the following conditions:

1. The vehicle has a serious defect or abnormal condition.
2. The defect or condition is covered by a manufacturer’s written warranty.
3. The owner reports the defect or condition to the dealer or manufacturer within the warranty term.
4. The owner gives the dealer or manufacturer a reasonable number of attempts to repair the defect or condition.
5. The owner gives the manufacturer (preferably by certified mail) written notice of the defect and at least one opportunity for repair.
6. The defect or condition persists and substantially impairs the vehicle’s use or market value, or creates a serious safety hazard.
7. The owner files a timely Lemon Law complaint and pays the filing fee.

Determining how many chances a dealer has to fix a defect is easy. Simply see if you pass either the four-times test, the serious-safety-hazard test or the 30-days test.

The law presumes you have given the manufacturer or authorized dealer a reasonable number of attempts to fix the defect if you pass one of these tests. The mileage requirements generally do not apply to TRVs.

If you have taken the vehicle to a dealership for repairs:

• two times for the same problem or defect within the first 12 months or 12,000 miles, whichever comes first, and
• twice more during the 12 months or 12,000 miles after the second repair attempt, and
• the problem is still not repaired

you pass the four-times test.

If you have taken the vehicle for repair of a serious safety hazard:

• once during the first 12 months or 12,000 miles, whichever comes first, and
• once more during the 12 months or 12,000 miles following the first repair attempt, and
• the problem is still not repaired

you pass the serious-safety-hazard test.

If your vehicle has been out of service for repair because of problems covered by the warranty:

• for a total of 30 days or more, not necessarily all at one time, during the first 24 months or 24,000 miles, and
• there were two repair attempts during the first 12 months or 12,000 miles immediately after delivery, and
• a substantial problem still exists

you pass the 30-days test.

If a comparable loaner vehicle was provided while the vehicle was being repaired, that time does not count toward the 30 days.

A Lemon Law complaint must be filed withinsix months following the earlier of:

1. expiration of the express warranty term;
2. 24 months; or
3. 24,000 miles following the date of delivery of the vehicle (except TRVs)

In other words, the filing period is determined by which of the above events comes first. To be safe, file your complaint as soon as you realize the dealer is having problems repairing the vehicle.

Even if you have gone past the time limit allowed for a repurchase, the Motor Vehicle Board may still be able to help you get repairs under your vehicle warranty.

Most people feel that a seller or manufacturer should replace defective products or refund the purchase price without a lot of hassle. However, it is not practical for automobile manufacturers to do this. Their products are much more expensive than most other consumer goods, and warranty disputes involve more complicated issues. Often, whether the vehicle is really defective is a legitimate question.

Before the Lemon Law, consumers had to file lawsuits to get relief. Most states have passed laws to provide consumers with a relatively quick, inexpensive and easy way to pursue their claim. But, any law requires certain procedures. Our staff, especially our consumer advisors, will try to make it easy for you to understand the legal requirements and procedures.

If your dealership does not seem to be able to correct the problems with your vehicle, send a letter, preferably by certified mail, to the manufacturer. The owner’s manual or warranty booklet should have a contact name and the address of the manufacturer’s regional office. Describe the vehicle’s condition and offer the manufacturer an opportunity to fix the problem. Better yet, tell the manufacturer when the vehicle will be back at the dealership for repair.

It is important to keep a complete record of all your dealings with the manufacturer and dealer, including copies of all repair orders, letters and records of phone calls. If you decide to file a Lemon Law complaint, you will need to send copies of all the materials to TxDOT.

Your complaint must be in writing.

If you want your vehicle replaced or repurchased, you must send a $35 nonrefundable filing fee with your complaint. However, if you win your case at a hearing, the manufacturer will reimburse you for the fee. If you are only seeking repairs under the warranty, no fee is required.

TxDOT will contact the manufacturer and dealer about your complaint. The manufacturer may send one of its experts to the dealership to help identify and fix the problem. If your vehicle is satisfactorily repaired, your case is resolved.

If the vehicle is not repaired, TxDOT may send a technical expert to meet with you and representatives for the dealer and the manufacturer. At the meeting, TxDOT’s expert will help settle the dispute, if possible. In many cases, the complaint is resolved at this stage, within 30 to 60 days after the complaint was filed.

If the complaint is not settled, a hearing will be necessary.

A Lemon Law hearing is your opportunity to prove to an Administrative Law Judge (ALJ) that your vehicle is a lemon. You must present your own testimony or that of witnesses. You should also present letters, repair orders or other documents (except affidavits) to prove to the ALJ that your vehicle is a lemon.

Presenting a case to the ALJ is somewhat like appearing before a judge of a small-claims court. There are certain legal procedures that a judge must follow. The ALJ will relax the rules as much as possible, but the process is subject to the Texas Administrative Procedure Act, the Texas Rules of Civil Procedure and the Texas Rules of Evidence.

When a hearing is needed, TxDOT’s goal is to hold it and issue a decision within 150 days after receiving the complaint and filing fee. If the 150-day period expires without a decision, the consumer has the right to use the Lemon Law in court as though the Lemon Law process were complete.

• Collect your documents. For example, your sales contract, warranty booklet, work orders or repair tickets, and letters to or from the dealer or manufacturer. Bring three copies of all documents to the hearing.
• Arrange the work orders by date. Put the oldest work order first and complete the warranty repair log. Be prepared to support the log entries with your testimony or notes, or with testimony of witnesses.
• Complete the “List of Agreed Facts” form in advance to save time at the hearing.
• Arrange for witnesses to appear at the hearing because notarized statements generally are not allowed. If you have friends who have witnessed the vehicle’s problems, ask them to testify at the hearing. You may also subpoena witnesses. Make sure your witnesses know when and where to appear, and tell them it may take most of the morning or afternoon.
• Make sure the vehicle is ready to be inspected and test-driven at the hearing, including having current registration and state inspection. For example, if the complaint is a severe vibration, make sure the tires are not worn out and that they are properly aligned and balanced. Be sure your vehicle has had the required maintenance and bring records to prove it.

Although a hearing is less formal than a court trial, you must still prove your case to the Administrative Law Judge. You must prove that:

• you purchased or leased a new motor vehicle, and you still own or lease it at the time of the hearing;
• the vehicle had a defect covered by the warranty, and you reported the defect to the dealer or manufacturer during the warranty period;
• you filed a Lemon Law complaint within the time limit and paid the filing fee;
• you gave the manufacturer or its dealer a reasonable number of attempts to fix the defect or condition, but the defect remained. Ordinarily, the defect must continue to exist at time of hearing;
• you notified the manufacturer of the defect in writing and have given the manufacturer at least one chance to fix it;
• the defect or condition substantially impairs the use or market value of the vehicle, or creates a serious safety hazard. You may be able to prove the vehicle’s use is impaired if any of its major systems are defective, or if a defect such as a water leak prevents it from being used normally in the rain.A vehicle’s value may be decreased by paint flaws or any other condition that would lead a buyer to pay substantially less than the market price for a comparable vehicle that does not have the defect. A serious safety hazard is a life-threatening malfunction that impedes your ability to control or operate the vehicle normally or that creates a substantial risk of fire or explosion.

TxDOT attorneys conduct the hearings, which usually last two to four hours. These attorneys (administrative law judges or ALJs’s) travel across the state to locations convenient to consumers. The judge does not represent either party at the hearing, but reaches a decision based on the evidence presented.

Proof elements here are described in layman’s terms. The actual legal provisions are found in §6.07 of the V.T.C.S. Article 4413(36).

Usually, owners present their own cases, and manufacturers send their customer relations managers. However, if a manufacturer has an attorney or if you feel uncomfortable without one, you may want to be represented by counsel. If you choose to have an attorney, you must send written notice to TxDOT’s Motor Vehicle Division and the manufacturer at least five days before the hearing.

Attorney fees are not reimbursable.

First, you will present your side of the story. Then, the judge or the manufacturer’s representatives may ask you questions about your statements or documents.

Next, the manufacturer’s case is presented. They may bring witnesses or documents to try to show one of three things:

• there is no defect at all;
• the defect is minor and does not substantially impair the vehicle’s use or market value;
• the defect was caused by owner neglect or some other factor.

Be sure to take notes as the manufacturer presents the case so you can then ask specific questions about testimony or documents.

After all the evidence is received, the hearing recesses for a vehicle inspection and test drive. The ALJ may decide to conduct the inspection and test drive after you present your case, and will explain the procedures. At the hearing’s conclusion, each party summarizes the evidence presented and argues for a specific result.

TxDOT will issue a decision shortly after the hearing that will include the ALJ’s summary of the evidence, reasoning, findings of fact and conclusions of law. The judge will decide one of three things:

• the complaint should be dismissed;
• the vehicle has a defect that the manufacturer must repair;
• the vehicle qualifies as a lemon and should be repurchased or replaced.

The law provides basic guidelines for what you may get if you prove your case. Because every situation is different, judges review the facts of each particular case when making a decision.

If you win your case, the judge will order one of the following:

The manufacturer must buy back the vehicle for the full purchase price, including taxes, title and license fee, minus an amount charged for the use of the vehicle. The amount deducted is decided according to a formula that takes into account the number of miles on the vehicle at the time of the hearing and other factors.

The manufacturer must replace the defective vehicle with one that is comparable to your original vehicle, usually same make, model and accessories, that is acceptable to you, minus the mileage used.

The manufacturer must fix the vehicle’s defects. Also, out-of-pocket expenses for repairs that should have been covered by the warranty will be reimbursed.

Incidental expenses are awarded only if the vehicle is ordered to be repurchased or replaced. They include the costs of towing, rental cars, lodging and meals if the vehicle broke down while out of town, and telephone calls and postage spent trying to get the vehicle repaired.

Neither you nor the manufacturer has to accept the ALJ’s decision. Copies of the decision and order are sent to the consumer and the manufacturer by certified mail. Each can file a motion for rehearing within 20 days after the decision is mailed. The motion may be sent either to the director of the Motor Vehicle Division or to the Motor Vehicle Board. Parties are promptly notified whether the motion for rehearing has been granted or denied.

If a rehearing is denied, a party can appeal to the State District Court in Travis County within 30 days of the order denying the motion for rehearing. A replacement or repurchase order remains in effect even though a manufacturer files an appeal.

A party wishing to appeal a TxDOT order should hire an attorney promptly because of the short time allowed to file an appeal.

The Lemon Law expressly provides that it does not limit the rights or remedies otherwise available to an owner under any other law. You may file a lawsuit against a manufacturer or dealer for breach of warranty, deceptive trade practices or some other reason as long as you are still within the applicable statute of limitations. For information concerning other rights and remedies available, you should contact a private attorney.

Once you have had a hearing under the Lemon Law, you may be able to use certain provisions of the Lemon Law in court as part of your lawsuit. You may also use the Lemon Law in court if it has been more than 150 days since TxDOT received your complaint and filing fee, and you have not yet received a decision.

The information on this page is a summary of the Lemon Law and the procedures involved in pursuing a complaint. The law itself is found in Vernon’s Revised Texas Civil Statutes, Article 4413(36), Section 6.07.