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Your Guide to Understanding Minnesota Lemon Law Rights

Are you a resident of Minnesota who recently purchased or leased a car, pickup truck, or van? If so, it’s important to familiarize yourself with Minnesota’s lemon law rights. This comprehensive guide will explain everything you need to know about the lemon law statute in Minnesota, providing valuable insights and answers to commonly asked questions. Whether you’re seeking help with the lemon law process or want to know more about your rights as a consumer, this guide will serve as your go-to resource.

Understanding Minnesota Lemon Law

Minnesota’s lemon law, officially known as the motor vehicle warranty statute, was created with the intention of protecting consumers who purchase or lease vehicles that are still under the original manufacturer’s warranty. While this law does not eliminate all potential problems you may encounter with your vehicle, it does require manufacturers to honor the terms outlined in their written warranties. Additionally, the law offers special provisions for vehicles that are deemed “lemons.”

Which Vehicles are Covered?

The Minnesota lemon law covers new motor vehicles that are purchased or leased within the state. It also extends to used vehicles that are still covered by the original manufacturer’s warranty. To be eligible for protection under the lemon law, these vehicles must be used at least 40% of the time for personal, family, or household purposes. Leased vehicles are also covered if the lease term is longer than four months.

In order to make a claim, the first instance of a defect must occur within the warranty period or two years, whichever comes first. However, if you experience ongoing issues with the same defect, you still have the right to make a claim until the end of the third year.

The Manufacturer’s Responsibilities

According to the Minnesota lemon law, manufacturers and their authorized dealers are obligated to repair a vehicle in accordance with the terms of the warranty. This responsibility extends beyond the expiration of the warranty if the following criteria are met:

  1. The vehicle has a defect or problem that is covered by the warranty.
  2. The problem has been reported by the vehicle owner within the warranty period or within two years after the delivery of the vehicle, whichever comes first.

Refunds or Replacements

If a vehicle has substantial defects or problems, commonly known as “lemons,” the Minnesota lemon law provides special provisions for refunds or replacements. If the manufacturer or authorized dealer has been unable to repair the vehicle’s problem after a “reasonable number of attempts,” the buyer or lessee can pursue a refund or replacement through the manufacturer’s arbitration program or the court system.

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A “reasonable number of attempts” is defined as:

  • Four or more unsuccessful attempts to repair the same defect.
  • One unsuccessful attempt to repair a defect that has caused the complete failure of the steering or braking system and is likely to cause death or serious bodily injury.
  • A vehicle that has been out of service due to warranty repairs for 30 or more cumulative business days.

It’s important to note that the initial defect must occur within the warranty period or two years, whichever comes first. However, the manufacturer’s repair attempts may extend to the end of the third year. If you meet any of the aforementioned criteria, you may have a valid lemon law claim, although proving your case may be more challenging.

Exclusions for Refunds or Replacements

There are situations in which the manufacturer is not required to provide a refund or replacement for a vehicle. These situations include:

  • The problem does not substantially impair the use or market value of the vehicle.
  • The problem is the result of abuse, neglect, or unauthorized modifications or alterations of the vehicle.

Eligibility Requirements for Refunds or Replacements

Experiencing multiple unsuccessful repair attempts does not automatically make you eligible for a refund or replacement vehicle. To be eligible, you must follow these steps:

  1. Write to the manufacturer, zone representative, or authorized dealer, notifying them of the problem. Clearly state that your vehicle is a lemon and that you seek a buy-back under the lemon law. This serves two purposes: it gives the company one more chance to fix the defect after notification and it lets them know of your intent to use Minnesota’s lemon law if the defect is not properly repaired.

  2. Attempt to resolve the problem through the manufacturer’s automobile dispute arbitration program. It’s important to check with the manufacturer or the Minnesota Attorney General’s Consumer Division to understand the specifics of the arbitration program.

If you are awarded a refund under the terms of the lemon law, the manufacturer must refund:

  • The full purchase price of the vehicle or the amount paid on your lease. However, a reasonable allowance for the time you were able to use the vehicle may be deducted. This deduction cannot exceed 10 cents per mile or 10% of the purchase price, whichever is less.
  • The cost of certain options installed by the manufacturer or dealer.
  • Sales tax.
  • License fees.
  • Registration fees.
  • Reimbursement for towing.
  • Rental expenses.

Please note that if you are awarded a replacement vehicle, you have the option to choose a refund instead.

Arbitration

Automobile manufacturers in Minnesota are required to offer consumers an arbitration program specifically designed to address warranty-related disputes. This program provides consumers with a fast and simple way to resolve conflicts. While arbitrators can consider arguments based on the lemon law, it’s essential to remember that they are not judges and are not bound by the same legal standards.

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If the manufacturer mandates it, consumers must go through the arbitration program before filing a lawsuit under the lemon law. In some cases, you may not have to wait until all the lemon law criteria are met before entering arbitration. However, having all the criteria met may strengthen your case.

During the arbitration process, consumers are entitled to certain rights, including:

  • Receiving lemon law information, ensuring that both you and the arbitrator(s) have access to the Lemon Law Brochure from the manufacturer’s arbitration program.
  • Presenting lemon law arguments, allowing you to make any necessary arguments to the arbitrator(s) that support your complaint, including those based on the lemon law.
  • Access to documents, ensuring that you receive copies of all relevant documents.
  • Making an oral presentation, granting you the opportunity to make an oral presentation to the arbitrator(s) unless you agree to a telephone conference or a resolution based solely on documents. If the case is based on documents alone, the manufacturer or dealer representative cannot participate in the discussion or resolution of the dispute. Opting for a personal oral presentation may result in better outcomes.
  • Obtaining an independent appraisal, providing you with an adequate opportunity to obtain an independent appraisal, at your own expense, to address any manufacturer claims asserting that your vehicle does not have a problem or is operating within normal specifications.
  • Reporting repair attempts, allowing you to inform the arbitrator(s) about any recent repair attempts made by the manufacturer.
  • Access to service bulletins, ensuring that you are provided, at reasonable cost, with any technical service bulletin that directly applies to the specific mechanical problem being disputed.
  • The right to be represented by an attorney, although most individuals participating in arbitration do so without an attorney. Lemon law representation fees are not recoverable.
  • The decision is not binding, meaning you are not bound by the decision of the arbitrator(s) unless you agree to be bound. In some cases, manufacturers have agreed to be bound by the arbitration decision. If you are unhappy with the arbitration decision, consulting with an attorney regarding a potential lawsuit under the lemon law is an option. The arbitration decision can be presented as non-binding evidence in any subsequent legal action. If you wish to file an appeal against the arbitrator’s ruling in court, the filing must occur within 30 days of the decision.
  • Receiving the appropriate refund amount, as determined by the arbitrator(s) if you are awarded a refund or replacement vehicle under the terms of the lemon law. You are entitled to the same refunds and reimbursements you would have received if you had won in court.
  • Bad faith appeal consequences, such as the potential for the party that wins in court to receive three times the actual damages, plus attorney’s fees and court costs, if it is determined that you or the manufacturer acted in bad faith during the appeal of an arbitration decision.
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How to Use the Lemon Law in Arbitration or Court

To prepare for a dispute, there are several steps you should take:

  1. Keep copies of all relevant documents, including purchase orders, sales receipts, lease agreements, warranties, repair invoices, letters, and other records related to your vehicle and any reported problems.
  2. If your vehicle requires repairs that last more than one day, ensure that the repair invoice indicates the date it was brought in and the date you were notified it was ready for pick-up.
  3. If you believe you are eligible for a refund or replacement vehicle, it is crucial to send written notice to the manufacturer, zone representative, or authorized dealer. Send this notice via certified mail with a return receipt requested. If you send it to the dealer, send a copy to the manufacturer and keep a duplicate for your records. Make sure to include the following information in your letter:
    • Your name, address, and telephone number.
    • The date of the vehicle purchase or lease.
    • A detailed list of defects and the affected systems.
    • The number of times the vehicle has been repaired for the same problem and the dates of those repairs.
    • A statement affirming that the defect still exists as of the date of the letter.
    • A reference to the lemon law (Minnesota Statutes, section 325F.665) and a clear statement of your intention to pursue a replacement or refund claim under this law if the vehicle is not rectified.
    • A request for information regarding the company’s arbitration program.

Remember that the lemon law’s refund and replacement provisions are intended to provide recourse in cases involving the most serious defects, such as faults that significantly impair the vehicle’s use or market value, or those that involve life-threatening failures of the steering and braking systems.

If You Choose to Sue

If you believe you must pursue a lawsuit under the lemon law to obtain a refund or replacement vehicle, it is advisable to consult with an attorney. Depending on the outcome, you may be eligible to recover attorney’s fees if you win. The law allows you to file a lawsuit at any time within three years of the vehicle’s original delivery date if you reported the defect within the warranty period or two years, whichever comes first. Since April 1995, if you go through a manufacturer’s arbitration program, you have six months to appeal in court, whereas the company has only 30 days to do the same.

In conclusion, being aware of your rights under the Minnesota lemon law is crucial if you encounter significant defects in your vehicle. By understanding the criteria for refunds, replacements, and arbitration, you can navigate the process with confidence. Remember to keep all relevant documentation and consult legal help when needed.

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