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Understanding Texas Lemon Law
“Lemon laws” enacted across the United States help protect consumers who purchase defective vehicles and provide a legal procedure to compensate them for their losses. Additionally, a powerful federal law known as the Magnuson-Moss Warranty Act provides protection for consumers who purchase cars that are having problems and have an unexpired manufacturer’s warranty.
Texas enacted its lemon law in 1983, though a court challenge stalled its enforcement until 1985. The Texas Department of Motor Vehicles enforces the law in the state. The State Legislature expanded the definition of a “lemon” and the time period for filing a complaint in 1991, and added towable recreational vehicles (TRVs) to the law in 1997.
The Texas Lemon Law applies to new vehicles including cars, trucks, vans, motorcycles, all-terrain vehicles, motor homes, TRVs and neighborhood electric vehicles. The law doesn’t cover used vehicles, repossessed vehicles, non-travel trailers, boats, or farming equipment. It also does not cover problems caused by the owner’s abuse, neglect or unauthorized changes, parts or components not authorized or installed by the manufacturer, or problems that don’t “substantially impair the use or market value of the vehicle,” such as minor rattles or stereo problems.
Per Texas law, a vehicle can be declared a lemon if it has a “serious defect or abnormal condition” covered by the manufacturer’s written warranty that is reported to the dealer or manufacturer within the warranty term. The owner must give the dealer or manufacturer a “reasonable number of attempts” to repair the problem, and the owner must give the manufacturer written notice of the defect and at least one opportunity for repair after notification.
A car in Texas must pass one of three tests to be considered a lemon under the state law: either the four times test, serious safety hazard test, or the 30 day test.
A vehicle passes the four times test if it’s been taken to a dealership for repairs two times for the same problem or defect within the first year or 12,000 miles, whichever comes first, and twice more during the first 12 months or 12,000 miles following the first repair attempt without the problem being fixed.
A vehicle passes the serious safety hazard test if the vehicle owner submits the vehicle for repair of a serious safety hazard once during the first 12 months of ownership or 12,000 miles, whichever comes first, and then once more during the 12 months or 12,000 miles following the first repair attempts without the problem being fixed.
A vehicle passes the 30-day test if it has been out of service for repair because of problems covered by the original factory warranty for a total of 30 days or more during the first two years or 24,000 miles of ownership without a comparable loaner vehicle offered, and there were two repair attempts during the first year or 12,000 without any success.
A lemon law complaint in Texas must be filed within six months of the vehicle’s warranty expiring or 24 months or 24,000 miles following the date of delivery of the vehicle; whichever comes first.
For more information on arbitration and other frequently asked lemon law questions, click here
Texans seeking to file state lemon law complaints must do so by filing paperwork, along with any related repair orders, correspondence with the manufacturer and records of phone calls, with the Texas Department of Motor Vehicles. The state will then contact the manufacturer and possibly send an expert to help identify and repair the issue. If the owner and manufacturer are unable to reach a mutual agreement regarding repair, repurchase, replacement, trade assistance, service contracts or monetary compensation, the state will order a lemon law hearing. Texas lemon law does not force the manufacturer to pay for the owner to acquire legal counsel for the hearing, unlike the federal Magnuson-Moss Warranty Act which allows for consumers to sue for attorney’s fees in addition to monetary damages won in court.
At the hearing, the state acts as the third party arbitrator between the owner and the manufacturer. The owner should collect all documents relating to the vehicle and the repair process, including the letters exchanged with the manufacturer. They should also arrange for witnesses to appear at the hearing, including friends who have witnessed the vehicle’s problems. The vehicle in question should also be ready for inspection and test drive at the hearing.
A hearing is less formal than a court trial, but the owner must prove they purchased the vehicle from a licensed Texas dealer or lessor, that they still own or lease it at the time of the hearing, the defect in question is covered by the warranty, that the owner gave the manufacturer or dealer a reasonable number of attempts to fix the problem without success, that they notified the manufacturer of the defect in writing and gave them at least one chance to fix it after notification, and that the problem substantially impairs the use or market value of the vehicle or creates a serious safety hazard.
The manufacturer’s representatives may attempt to prove there is no defect with the vehicle, that any defect is minor and doesn’t substantially impair the vehicle’s use or market value, that it doesn’t create a serious safety hazard or it was caused by owner abuse, neglect or some other factor.
The hearing may end in favor of the owner, and the state will order the manufacturer to repair, repurchase or replace the vehicle. The state could also decide against the owner and dismiss the complaint. After that, the only remaining recourse for an owner is to file a breach of warranty lawsuit within the statute of limitations. Lemonlawusa.org encourages any Texas vehicle owner with a potential lemon law claim to contact a reputable Texas lemon law lawyer that has experience handling lemon law claims to help determine how the vehicle owner should proceed in light of their particular circumstances.
Vehicle manufacturers use lawyers to defend against lemon law claims and vehicle owners should seek out legal representation in order to have the best opportunity to succeed in successfully resolving their lemon law claim. Because Texas lemon law claimants can make claims under the federal Magnuson-Moss Warranty Act, they can hire lawyers who will represent them without the vehicle owner having to pay any attorneys’ fees directly out of their pocket. This is because the federal Act provides that the vehicle manufacturer shall pay the claimants attorneys’ fees if the claimant prevails against the manufacturer. Lemon law attorneys exist that will only collect attorneys’ fees if they succeed in obtaining a financial recovery for their clients.
This information brought to you by Allen Stewart P.C.