The following information is presented on-line for informational use
only and without warranty as to its accuracy, timeliness, or completeness.
It does not replace any official versions of this information. (Mich Dept
of Attorney General Web Site - www.ag.state.mi.us) The Lemon
Law provides a remedy for buyers of new cars and trucks that experience an
excess of mechanical conditions. The law imposes a duty of repair upon the
manufacturer, agent or dealer. If the manufacturer or dealer is unable to
repair the problem after a reasonable number of attempts, or if the
vehicle is out of service for more than 30 days, then the buyer may elect
a refund of the purchase price (including sales tax) or a comparable
replacement vehicle. Prior to refund or replacement, the buyer must first
participate in any mediation procedure that the manufacturer has
established.
MCL 257.1401; MSA 9.2705(1)
MICHIGAN LEMON LAW
Act 87 of 1986
AN ACT regarding warranties on new motor vehicles; to require certain
repairs to new motor vehicles; to provide remedies for the failure to
repair such vehicles; and to prescribe duties for certain state agencies.
History: 1986, Act 87, Eff. June 25, 1986;--Am. 1998, Act 486, Imd. Eff.
Jan. 4, 1999;--Am. 1998, Act 487, Imd. Eff. Jan. 4, 1999.
The People of the State of Michigan enact:
MCL 257.1401
NEW MOTOR VEHICLE WARRANTIES
Definitions.
Sec. 1. As used in this act:
(a) "Consumer"
means 1 or more of the following:
(i) A person who purchases or leases a new
motor vehicle for personal, family, or household use and not for the
purpose of selling or leasing the new motor vehicle to another person.
(ii) A person who purchases less than 10 new
motor vehicles a year.
(iii) A person who purchases 10 or more new
motor vehicles a year only if the vehicles are purchased for personal,
family, or household use.
(iv) Any other person entitled to enforce the
provisions of an express warranty pursuant to the terms of that warranty.
(b) "Lessee"
means a person who, under a lease, acquires the right to possession and
use of a new motor vehicle.
(c) "Lessor"
means a person who, under a lease, transfers the right to possession and
use of a new motor vehicle.
(d) "Manufacturer"
means any person who manufactures, assembles, or is a distributor of new
motor vehicles and includes an agent of a manufacturer but does not
include a new motor vehicle dealer.
(e) "Manufacturer's
express warranty" means an express warranty as determined under the
uniform commercial code, 1962 PA 174, MCL 440.1101 to 440.11102, offered
by the manufacturer on a new motor vehicle.
(f) "Motor vehicle"
means a motor vehicle as defined in section 33 of the Michigan vehicle
code,1949 PA 300, MCL 257.33, that is designed as a passenger vehicle, or
sport utility vehicle, but does not include a motor home, bus, truck other
than a pickup truck or van, or a vehicle designed to travel on less than 4
wheels.
(g) "New motor vehicle"
means a motor vehicle that is purchased or leased in this state or
purchased or leased by a resident of this state and is covered by a
manufacturer's express warranty at the time of purchase or lease.
(h) "New motor vehicle
dealer" means a person or that person's agent who holds a dealer
agreement for the sale of new motor vehicles, who is engaged in the
business of purchasing, leasing, selling, exchanging, or dealing in new
motor vehicles, and who has an established place of business in this
state.
(j) "Resident of this
state" means as follows:
(i) For an individual, an individual who is a
legal resident of this state.
(ii) For a sole proprietorship or
partnership, a sole proprietorship or partnership created pursuant to the
laws of this state and its main office is located in this state.
(iii) For a corporation, a corporation that
is a domestic corporation and was created under the laws of this state.
(iv) For an association, an association
created pursuant to the laws of this state and its main office is located
in this state.
(v) For a unit or agency of government, a
unit or agency of government located in this state.
(vi) For a trust, estate, or other legal
entity, a trust, estate, or other legal entity created pursuant to the
laws of this state and that is located in this state.
(k) "Lease price"
means the actual vehicle sales price paid by the lessor including any cash
payment by the consumer and the sum equal to any allowance for any
trade-in but excludes debt from any other transaction as well as any
manufacturer to consumer discount, rebate, or incentive appearing in the
agreement or contract that the consumer received or that was applied to
reduce the purchase or lease cost. Additionally, any sales tax, license
and registration fees, and similar government charges not included
elsewhere paid by the lessor on behalf of the lessee are included as a
part of lease price.
(l) "Purchase price"
means the actual vehicle sales price listed on the buyer's order including
any cash payment by the consumer and the sum equal to any allowance for
any trade-in but excludes debt from any other transaction as well as any
manufacturer to consumer discount, rebate, or incentive appearing in the
agreement or contract that the consumer received or that was applied to
reduce the purchase cost. Additionally, any sales tax, license and
registration fees, and similar government charges not included elsewhere
paid by the consumer are included as a part of purchase price.
History: 1986, Act 87, Eff. June 25,
1986;--Am. 1998, Act 486, Imd. Eff. Jan. 4, 1999.
MCL 257.1402.
Repair of defect or condition; report.
Sec. 2. If a new motor vehicle has
any defect or condition that impairs the use or value of the new motor
vehicle to the consumer or which prevents the new motor vehicle from
conforming to the manufacturer's express warranty, the manufacturer or a
new motor vehicle dealer of that type of motor vehicle shall repair the
defect or condition as required under section 3 if the consumer initially
reported the defect or condition to the manufacturer or the new motor
vehicle dealer within 1 of the following time periods, whichever is
earlier:
(a) During the term the manufacturer's
express warranty is in effect.
(b) Not later than 1 year from the date of
delivery of the new motor vehicle to the original consumer.
History: 1986, Act 87, Eff. June 25, 1986.
MCL 257.1403.
Replacement of motor vehicle or refund; allowance
for use;
reimbursement for towing costs and costs for rental vehicle; consent to
replacement of security interest; presumption; performing repairs after
expiration of warranty; extension of time for repair services.
Sec. 3. (1)
If a defect or condition that was reported to the manufacturer or new
motor vehicle dealer pursuant to section 2 continues to exist and the new
motor vehicle has been subjected to a reasonable number of repairs as
determined under subsection (5), the manufacturer shall within 30 days, do
either of the following as applicable:
(a) If the new motor vehicle was purchased,
either replace the new motor vehicle with a comparable replacement motor
vehicle currently in production and acceptable to the consumer or accept
return of the vehicle and refund to the consumer the purchase price. A
consumer shall have the right to demand a refund.
(b) If the new motor vehicle was leased, the
consumer has the right to a refund of the lease price paid by the
consumer. The consumer may agree to accept a comparable replacement
vehicle in lieu of a refund for the lease price paid. If the consumer
agrees to accept a replacement vehicle, the lease agreement shall not be
altered except with respect to the identification of the vehicle.
(2) The purchase price or lease price
includes the cost of any options or other modifications installed or made
by or for the manufacturer, and the amount of all other charges made by or
for the manufacturer, less a reasonable allowance for the consumer's use
of the vehicle, and less an amount equal to any appraised damage that is
not attributable to normal use or to the defect or condition. A reasonable
allowance for use is the purchase or lease price of the new motor vehicle
multiplied by a fraction having as the denominator 100,000 miles and
having as the numerator the miles directly attributable to use by the
consumer and any previous consumer prior to his or her first report of a
defect or condition that impairs the use or value of the new motor vehicle
plus all mileage directly attributable to use by a consumer beyond 25,000
miles. If a vehicle is replaced or refunded under the provisions of this
section, if towing services and rental vehicles were not made available
without cost to the consumer, the manufacturer shall also reimburse the
consumer for those towing costs and reasonable costs for a comparable
rental vehicle that were incurred as a direct result of the defect or
condition.
(3) If a court or an alternative dispute
settlement procedure described in section 5 determines that a consumer has
provided sufficient evidence that the vehicle did not provide reliable
transportation for ordinary personal or household use for any period
beyond the first 25,000 mileage usage period of the vehicle, the court or
the alternative dispute settlement procedure may reduce the vehicle usage
deduction for mileage beyond the first 25,000 mileage usage period only
for the period beyond the 25,000 mileage usage period that the court or
alternative dispute settlement procedure determines that the vehicle did
not provide useful transportation for ordinary personal or household use.
To determine if the vehicle did or did not provide useful transportation
for ordinary personal and household use, the court or the alternative
dispute settlement procedure shall consider all of the following:
(a) The number of repairs.
(b) The cost of the repairs.
(c) The number of days the vehicle was out of
service.
(d) Whether the vehicle's need for repair
significantly affected the consumer's ability to use the vehicle for
personal or household functions.
(4) The provisions of this act do not affect
the obligations of a consumer under a loan, sales, or lease contract or
the secured interest of a secured party. The secured party shall consent
to the replacement of the security interest with a corresponding security
interest on a replacement motor vehicle that is accepted by the consumer
in exchange for the motor vehicle having a defect or condition pursuant to
subsection (1), if the replacement motor vehicle is comparable in value to
the original motor vehicle. If for any reason the security interest in the
new motor vehicle having a defect or condition pursuant to subsection (1)
is not able to be replaced with a corresponding security interest on a new
motor vehicle accepted by the consumer, the consumer shall accept a
refund. A refund required under this subsection or subsection (1) shall be
made to the consumer and the secured party, if any, as their interests
exist at the time the refund is to be made. The lessor, if any, shall be
notified if a refund is made to a lessee under this act. A lessor shall
not assess a fee for early termination of a lease under this act.
(5) It shall be presumed that a reasonable
number of attempts have been undertaken to repair a defect or condition if
1 of the following occurs:
(a) The same defect or condition that
substantially impairs the use or value of the new motor vehicle to the
consumer has been subject to repair a total of 4 or more times by the
manufacturer or new motor vehicle dealer within 2 years of the date of the
first attempt to repair the defect or condition, and the defect or
condition continues to exist. Any repair performed on the same defect made
pursuant to subsection (6) shall be included in calculating the number of
repairs under this section. The consumer or his or her representative,
before availing himself or herself of a remedy provided under subsection (1),
and any time after the third attempt to repair the same defect or
condition, shall give written notification, by return receipt service, to
the manufacturer of the need for repair of the defect or condition in
order to allow the manufacturer an opportunity to cure the defect or
condition. The manufacturer shall notify the consumer as soon as
reasonably possible of a reasonably accessible repair facility. After
delivery of the vehicle to the designated repair facility, the
manufacturer has 5 business days to repair the defect or condition.
(b) The new motor vehicle is out of service
because of repairs for a total of 30 or more days or parts of days during
the term of the manufacturer's express warranty, or within 1 year from the
date of delivery to the original consumer, whichever is earlier. The
consumer, or his or her representative, before availing himself or herself
of a remedy provided under subsection (1), and after the vehicle has been
out of service for at least 25 days in a repair facility, shall give
written notification by return receipt service to the manufacturer of the
need for repair of the defect or condition in order to allow the
manufacturer an opportunity to cure the defect or condition. The
manufacturer shall notify the consumer as soon as reasonably possible of a
reasonably accessible repair facility. After delivery of the vehicle to
the designated repair facility, the manufacturer has 5 business days to
repair the defect or condition.
(6) Any repairs required to be made under
this act shall be made even if the repairs need to be performed after the
expiration of the manufacturer's express warranty. The defect needing
repair must be a continuation of the original attempt to repair the
defect.
(7) The term of an express warranty, and the
1-year, 30-day, and 5-day periods of time provided for in this section
shall be extended because repair services were not available to the
consumer because of war, invasion, strike, fire, flood, or other natural
disaster.
History: 1986, Act 87, Eff. June 25,
1986;--Am. 1998, Act 486, Imd. Eff. Jan. 4, 1999.
257.1404
Other legal remedies not limited or prohibited.
Sec. 4. Nothing in this act shall be
construed to limit or prohibit any other legal remedy of a consumer
regarding a breach of a manufacturer's express warranty or an implied
warranty for a new motor vehicle.
History: 1986, Act 87, Eff. June 25, 1986.
257.1405
Informal dispute settlement procedure.
Sec. 5. If a manufacturer has
established or participates in an informal dispute settlement procedure,
the provisions of this act shall not apply to any consumer who has not
first resorted to such procedure, if such procedure does all of the
following:
(a) Complies with the Magnuson-Moss
warranty--federal trade commission improvement act, Public Law 93-637, 88
Stat. 2183, and 16 C.F.R. 703 (1975). An informal dispute settlement
procedure which the federal trade commission rules does not comply with 16
C.F.R. 703 (1975) shall be considered as not meeting the requirements of
this subdivision.
(b) Requires that the manufacturer is bound
by any decision reached if the consumer agrees to it.
(c) Provides that the consumer is not
obligated to accept the decision and may pursue the remedies provided for
under this act.
(d) Requires the manufacturer to initiate the
process necessary to implement any final settlement not more than 30 days
after the settlement has been reached.
History: 1986, Act 87, Eff. June 25, 1986.
257.1406
Defects or conditions to which act inapplicable.
Sec. 6 . This act does not apply to
a defect or condition that is the result of either of the following:
(a) A modification not installed or made by
or for the manufacturer.
(b) Abuse or neglect of the new motor vehicle
or damage due to an accident that occurred after the new motor vehicle was
purchased or leased by the consumer.
History: 1986, Act 87, Eff. June 25,
1986;--Am. 1998, Act 487, Imd. Eff. Jan. 4, 1999
257.1407 Waiver of rights and remedies prohibited; recovery of costs,
expenses, and attorneys' fees.
Sec. 7. (1) Any rights and remedies provided a consumer
under this act may not be waived.
(2) A consumer who prevails in any action
brought under this act may be allowed by the court to recover as part of
the judgment a sum equal to the aggregate amount of cost and expenses,
including attorneys' fees based on actual time expended by the attorney,
determined by the court to have been reasonably incurred by the consumer
for or in connection with the commencement and prosecution of such action,
unless the court in its discretion shall determine that such an award of
attorneys' fees would be inappropriate.
History: 1986, Act 87, Eff. June 25, 1986
257.1408
Written statement to be included with title; type size; form.
Sec. 8.(1)
Until December 31, 1999 and after as provided in subsection (2), the
secretary of state shall include with any title for a new motor vehicle a
written statement, in 10-point boldfaced type, in substantially the
following form:
"IMPORTANT: IF THIS VEHICLE IS DEFECTIVE YOU MAY BE ENTITLED UNDER STATE
LAW TO REPLACEMENT OF IT OR A REFUND OF ITS PURCHASE PRICE. TO OBTAIN
REPLACEMENT OR A REFUND, YOU MUST FIRST REPORT THE DEFECT IN WRITING TO
THE MANUFACTURER AND YOU MAY BE REQUIRED TO FIRST ARBITRATE THE DISPUTE.
IN ORDER TO PROTECT YOUR RIGHTS UNDER THIS LAW, YOU SHOULD:
1. KEEP COPIES OF ALL CORRESPONDENCE TO AND
FROM THE MANUFACTURER AND THE DEALER.
2. KEEP COPIES OF ALL WORK ORDERS FOR REPAIRS
ON THE VEHICLE INCLUDING THE DATE(S) THE WORK WAS PERFORMED AND THE
MILEAGE ON THE VEHICLE AT THE TIME OF REPAIR.
3. FOLLOW ALL REQUIREMENTS OF THE WARRANTY,
INCLUDING ANY REQUIREMENT THAT THE REPAIRS MUST BE DONE BY AN AUTHORIZED
DEALER SPECIFIED BY THE MANUFACTURER. IF YOU HAVE ANY QUESTIONS REGARDING
YOUR RIGHTS UNDER THIS LAW, CONSULT AN ATTORNEY OR OTHER QUALIFIED
INDIVIDUAL."
(2) Beginning January 1, 2000, the secretary
of state shall include with documentation for a purchased or leased new
motor vehicle a written statement, in 10-point boldfaced type, in
substantially the following form:
"IMPORTANT: IF THIS VEHICLE IS DEFECTIVE YOU MAY BE ENTITLED UNDER STATE
LAW TO REPLACEMENT OF IT OR A REFUND OF ITS PURCHASE PRICE OR LEASE PRICE,
AS APPLICABLE. TO OBTAIN REPLACEMENT OR A REFUND, YOU MUST FIRST REPORT
THE DEFECT IN WRITING TO THE MANUFACTURER AND YOU MAY BE REQUIRED TO FIRST
ARBITRATE THE DISPUTE. IN ORDER TO PROTECT YOUR RIGHTS UNDER THIS LAW, YOU
SHOULD:
1. KEEP COPIES OF ALL CORRESPONDENCE TO AND
FROM THE MANUFACTURER AND THE DEALER.
2. KEEP COPIES OF ALL WORK ORDERS FOR REPAIRS
ON THE VEHICLE INCLUDING THE DATE(S) THE WORK WAS PERFORMED AND THE
MILEAGE ON THE VEHICLE AT THE TIME OF REPAIR.
3. FOLLOW ALL REQUIREMENTS OF THE WARRANTY,
INCLUDING ANY REQUIREMENT THAT THE REPAIRS MUST BE DONE BY AN AUTHORIZED
DEALER SPECIFIED BY THE MANUFACTURER. IF YOU HAVE ANY QUESTIONS REGARDING
YOUR RIGHTS UNDER THIS LAW, CONSULT AN ATTORNEY OR OTHER QUALIFIED
INDIVIDUAL."
(3) Beginning January 1, 2000, the secretary
of state shall include a summary of the provisions of this act on a
database that is accessible to the public through the internet. As used in
this section, "internet" means a worldwide interconnection of individual
computers and computer networks and the facilities and equipment used to
access those interconnected networks.
History: 1986, Act 87, Eff. June 25, 1986;--Am. 1998, Act 487, Imd. Eff.
Jan. 4, 1999.
257.1409
Applicability of act.
Sec. 9. This act shall apply to all
new motor vehicles that are sold to the original consumer on or after the
effective date of this act.
History: 1986, Act 87, Eff. June 25, 1986.
257.1410
Effect.
Sec. 10. This act shall take effect
60 days after its enactment.
History: 1986, Act 87, Eff. June 25,
1986;--Am. 1998, Act 486, Imd. Eff. Jan. 4, 1999;--Am. 1998, Act 487, Imd.
Eff. Jan. 4, 1999. |