The law governing repair, replacement, and refund under a motor vehicle warranty

This bill creates a definition of "out of service," which affects whether a "reasonable attempt to repair" has been made under item 2), above. Under the bill, "out of service" means that a motor vehicle is unable to be used by the consumer for the vehicle's intended purpose as a result of any of the following: 1) the vehicle is in the possession of the manufacturer, lessor, or authorized dealer for the purpose of performing or attempting repairs to correct a nonconformity; or 2) the vehicle is in the consumer's possession and all of the following apply: a) the vehicle has a nonconformity that substantially affects the use or safety of the vehicle and that has been subject to a previous repair attempt to correct the same nonconformity; and b) the consumer has reported, in writing, the nonconformity to the manufacturer, lessor, or authorized dealer and the manufacturer, lessor, or dealer has refused to accept the vehicle for the purpose of performing or attempting subsequent repairs.

Under the bill, if a consumer elects to receive a comparable new motor vehicle or a refund and offers to transfer title of the vehicle with the nonconformity to the manufacturer, the deadline for the manufacturer to provide the consumer with the comparable new motor vehicle or refund, discussed further below, is measured from the later of the election or the offer, except as discussed below. The bill also requires a consumer requesting a refund to provide to the manufacturer, in a form and manner prescribed by the Department of Transportation (DOT), all information timely requested and required by the manufacturer and any written consent to allow the manufacturer to provide the refund. The consumer must provide this information during or prior to the 30-day period that commences with the later of the consumer's election of the refund or the consumer's offer to transfer title to the manufacturer of the vehicle with the nonconformity. If the consumer fails to provide any of this information by the end of this 30-day period, the consumer may not bring a civil action to recover damages caused by a lemon law violation. Also, if a consumer elects to receive a refund, the deadline for the manufacturer to provide the consumer with the refund can be no earlier than ten days after the manufacturer receives from the consumer the required information and consent in the form and manner prescribed by DOT.

The bill also extends the time in which a manufacturer must provide a comparable new motor vehicle to a consumer who elects to receive a comparable new motor vehicle, from 30 days to 45 days after the later of the election or offer. If no comparable new motor vehicle is available for delivery within this 45-day period, the manufacturer must provide a refund in lieu of providing the comparable new motor vehicle. The manufacturer must exercise due diligence in locating and providing a comparable new motor vehicle during this 45-day period. These changes also apply if the comparable new motor vehicle is a commercial motor vehicle, except that the applicable period is 120 days rather than 45 days.

The bill also imposes additional limitations on civil actions brought to recover damages caused by lemon law violations. Under the bill, any action must be commenced within 24 months after first delivery of the motor vehicle to a consumer.

The bill also makes an award for pecuniary loss, costs, and attorney fees to a prevailing consumer in such an action discretionary with the court or jury rather than mandatory. The bill further eliminates the provision requiring the award of twice the amount of a prevailing consumer's pecuniary loss and instead allows an award of up to the amount of the prevailing consumer's pecuniary loss.

This bill specifies that, if a consumer enters into a negotiated written settlement with the manufacturer regarding a vehicle nonconformity, the manufacturer is no longer subject to any requirement under the lemon law with respect to that vehicle.

Also under this bill, if a consumer returns a vehicle with a nonconformity to the manufacturer and another person is in possession of the vehicle's certificate of title, that person must provide the certificate of title to the manufacturer, not the consumer, upon satisfaction of any security interest in the vehicle.