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We handle cases across the United States. Allen Stewart is licensed to practice law in Texas, California, New York, Pennsylvania, Missouri, North Carolina, Ohio and Arizona.

The Impact of Lemon Law on the Used Car Market: A Closer Look 

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The Texas lemon law protects you when you buy a lemon vehicle, in the event you miss a telltale sign on the lot and bring home a vehicle with a significant, potentially life-threatening defect. While this is less than ideal, far too often when a lemon is purchased, the dealer washes their hands of the problem immediately upon the vehicle leaving the lot.

The lemon law has imposed sanctions and possible avenues of reimbursement for auto buyers who are saddled with a defective vehicle. With more than 100,000 lemons manufactured each year across the various manufacturers, it stands to reason that auto buyers must be protected from the potential struggle that purchasing a lemon vehicle will become.

The used auto market is home to a number of frauds and scam artists. These individuals are more interested in making money than in providing a reliable vehicle for their customer. Therefore, legal recourse had to be created for those customers, to avoid the financial strain of purchasing a lemon that becomes undriveable in the first year of ownership.

For more information on arbitration and other frequently asked lemon law questions, click here.

It is key to know the various rules and regulations related to the Texas lemon law, what type of defect makes a vehicle eligible for a Texas lemon law complaint and the related processes to receive reimbursement for a vehicle that is not safe to drive.

What does the Texas lemon law cover?

The Texas lemon law outlines strict criteria as to what constitutes a lemon, what tests it must pass, what type of vehicle it should be, and who should own it. If you fit the criteria for these various categories, then you will be potentially able to receive reimbursement or a replacement vehicle if your case is determined to be legitimate by the Texas Department of Motor Vehicle’s Lemon Law Department.

Who is eligible for reimbursement under the Texas lemon law?

All residents of Texas (and active military members stationed in Texas) are covered by the Texas lemon law. If you reside in Texas and are not active military, the vehicle must be purchased within the state of Texas. If you are active military, it can be purchased elsewhere and will still be covered by the Texas lemon law, as long as it meets the criteria to be considered a lemon.

Criteria to be considered a lemon in Texas:

In order to be considered a lemon vehicle in Texas, a vehicle must:

  • Be covered by an original warranty from the dealer or manufacturer
  • Be within 24 months of purchase or the first 24,000 miles driven (OR be within the 6 months window past that milestone)
  • Not be a vehicle that has been repossessed
  • Have a recorded notification to the dealer/manufacturer that the defect exists and a reasonable amount of time has been given for the manufacturer to facilitate the repair process.

Tests for Texas lemon law

There are three tests the vehicle must pass in order to be considered a lemon under the Texas lemon law. Those tests include the Serious Defect Test, where the vehicle has a potentially life threatening defect that also significantly decreases the value of the vehicle: the 30 days or more test, where the vehicle sits idle for 30 days or more (not necessarily consecutive days) without a loaner vehicle provided; and the Four Repair Attempts test, where the vehicle has been to reputable repair facilities for the same defect at least four times within the first 24 months or 24,000 miles driven.

Think you have a lemon, click here to fill out a 30 second form.

If the vehicle fits the above criteria, then the vehicle owner could be eligible for reimbursement under the Texas lemon law, provided the case is found in their favor via mediation or a hearing in front of an examiner.

Types of vehicle covered under the Texas lemon law:

It is also important to note that a vehicle must be a car, truck, minivan, SUV, TRV, motorhome, or electric car in order to be covered by the Texas lemon law. Boats, trailers, and farm equipment are not covered under the Texas lemon law. Used vehicles are only covered if they are still within the timeframe of the original warranty from the dealer or manufacturer and if they are within the 24,000 miles or 24-month from purchase timeframe.

So what does that mean for an auto owner who purchased a used vehicle? Well unfortunately, it means that most used vehicles are not covered under this law. However, it is still wise to consult a lemon law attorney in order to discover the viable options for reimbursement at your disposal if you are dealing with a lemon.

The lemon law process

A lemon vehicle in Texas must still go through a process in order for the auto owner to receive reimbursement. The first step is filing a complaint. This can be done online through the Texas Department of Motor Vehicles website. This is because the Texas DMV oversees the lemon law department, rather than the state’s legal channels.

Lemon laws are confusing. Read our guide to the lemon law complaint process.

Once the complaint is filed, workers are assigned to the case. The first step is arranging a mediation between the auto owner and the dealer and/or manufacturer. At this point, it is very common for the dealer/manufacturer to try to bully the auto owner into taking much less than what the vehicle is worth – which is why it is key to work with a lemon law attorney.

If mediation is unsuccessful, a hearing is scheduled in front of an examiner. Both sides of the case are presented at that time, and the examiner can take up to 30 days to provide a written decision regarding the case. Both sides can appeal the decision if they find it unsatisfactory.

In the event the case is found in the auto buyer’s favor, then reimbursement is at the discretion of the examiner hearing the case. They can decide the auto buyer will be given a vehicle of comparable value (with consideration for miles driven); they can decide the individual will be compensated for repair costs and the vehicle repaired at the expense of the manufacturer, or they can decide that the manufacturer will repurchase the vehicle from the auto owner, with consideration both for miles driven and payments made during the time period that the auto owner had the vehicle.

This means the auto owner is relieved of the burden of dealing with the lemon and not required to handle the various stresses related to having a vehicle that is not reliable for transportation purposes.

Auto owners who do not have this option are often left with a rusting lawn ornament or are forced to sell the vehicle for parts and receive much less than its value due to the unrepairable defect and the fact the case did not go their way. It is a good idea to work with a lemon law attorney to reduce the risk of having this outcome occur.

Lemon law attorneys are well-versed in the various documentation and evidence needed to win a case. They can also guide you in case a scenario arises where potential delays could occur. The lemon law attorney’s staff can also provide guidance and assistant during the preparation process, thereby relieving some stress that is connected to dealing with a defective vehicle.

This information brought to you by Allen Stewart P.C.

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