Lemon Laws keep consumers safe when a recently purchased vehicle is defective. These state laws vary by region but offer a range of coverage periods, number of repair attempts required, used vs. new, how long the vehicle was out of service, etc. The federal law, The Magnuson-Moss Warranty Act of 1975, requires that consumers receive highly detailed warranty coverage status. But what does the history of Lemon Law really look like? Does it mirror automobile warranty history?
History of Warranties
In 1908, when Henry Ford started selling the Model T, the company did not offer a warranty apart from Ford himself announcing one year later that the reviews were in, and the vehicle had been a success: “This is your guarantee when you buy a Ford car.” By the mid-1920s, Ford offered 90 days for parts and 30 days for labor for vehicles in the United States.
As technology and manufacturing advanced, so did warranties. While still mostly addressing powertrains (systems including the engine and its components, such as the transmission and driveshaft), the 1960s and Lincoln Continentals saw an increase to warranties of a year or 12,000 miles, and then shortly after two years or 24,000 miles.
Other companies began to implement warranties, creating more variety in expectation. World War II also created an opportunity for better understanding of various engines, resulting in a huge leap forward in enhancement and technology. After this, warranties became a major selling point.
As major issues decreased and quality increased, the mid-1960s saw Chrysler offering five-year or 50,000-mile warranties on new vehicles, including many more components of the vehicle (such as water pumps). American Motors then matched that warranty and added another two years and 24,000 miles for the rest of the vehicle. The mid-1970s saw a Chrysler warranty that covered the whole vehicle for one year and unlimited miles which was eclipsed by the 1980 AMC warranty offering the same with the addition of a fully covered rental car.
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Today, “bumper-to-bumper” warranties generally come in between 3 years and 36,000 miles and 5 years and 60,000 miles. Powertrain warranties like the ones in the early days, ever less likely to cause major issues, come in between 4 years and 50,000 miles and 10 years and 100,000 miles. A USA Today article claims that Hyundai, Genesis, and Mitsubishi tend to provide the best coverage in these systems.
History of Lemon Law
Anyone who has read a vehicle warranty in detail, much less tried to get a warranty honored by a manufacturer, can attest to what a challenge it is to understand the fine print. What exactly is covered, for how long, and how much evidence is needed before a manufacturer will act? Widespread misuse of warranties in the 1970s lead to the creation of the Magnuson-Moss Warranty Act of 1975. This act, requiring warranties to be written in layman’s terms, is often thought to be the first legislation passed to combat these warranty issues. While this act brought major reform the automotive industry, it’s important to note that another organization also has an impact.
In 1892, the Uniform Law Commission (ULC) was formed with the goal of creating uniformity in commercial law across the United States. The Commission passed the:
Uniform Negotiation Instruments Law in 1896.
Uniform Sales Act and Uniform Warehouse Receipts Act in 1906.
Uniform Bills of Lading Act and Uniform Stock Transfer Act in 1909.
Uniform Conditional Sales Act in 1918.
Eventually, in 1940, they looked at creating guidelines for all transactions in the commercial sales industry, which included vehicle sales. By 1951, the ULC, partnered with the American Law Institute put together a Uniform Commercial Code (UCC). In 1953, Pennsylvania was the first to accept and implement the code, the rest of the states doing the same over the next twenty years.
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While the UCC provided much of the same protections lemon laws provide, it still wasn’t specific to vehicles. Consumer frustrations grew as the complexity of automotive warranties grew. These frustrations yielded the Magnuson-Moss Warranty Act in 1975 and then, eventually, the first Lemon Law in 1982. Connecticut was the first state to pass a Lemon Law and from there, every state had its own by the 1990s.
Current Day Lemon Laws
Now that each state has its own unique Lemon Laws, what does the future look like? Consumers can expect to see continued expansion of coverage as evidenced by the trajectory of competitive manufacturer warranties. As vehicles continue to be made with better quality parts and the industry continues to grow into different arenas (electric, hybrid, etc.), changes will need to be made.
For example, battery issues become a much more impactful issue in an electric vehicle. Many of these vehicles come with standard warranties and separate warranties specific to the battery. Lemon Laws often don’t have specific rules about these separate warranties and as such, filing a Lemon Law claim about an electric vehicle battery may not even be an option. Currently, only California provides coverage for separate warranties.
Repair and documentation also look quite different for electric vehicles. These vehicle owners may be offered mobile service technicians, vehicle pickup and return services, and remote repairs. While electric and hybrid vehicles may be more simplistic under the hood, they make up for that in software. Computer and software issues have been an upswing in Lemon Law claims and will continue to rise. Because so many of these repairs can potentially happen outside a traditional manufacturer’s mechanic shop, it’s also even more important to keep your own records. Noting things like repair attempts, downtime, and keeping service records can be helpful if an issue does arise down the road.
With so many more nuances in the industry and more on the way, lemon claims may very well rely even more heavily on mediation and arbitration, legal processes, that can help consumers outside the court room. For more information about the future of Lemon Law, reaching out to a qualified attorney can be the best option to get the most in-depth answers.