Get to Know the Federal Lemon Law

The Magnuson-Moss Warranty Act (MMWA) also known as the Federal Lemon Law, creates additional protections for consumers.  The law applies to transactions on consumer goods valued at more than $15 that are subject to a warranty.  For this blog post, we will focus on how the MMWA relates to new or used cars and trucks.

So, what exactly is a warranty?

A warranty is a promise from the manufacturer or dealership–set by a specific amount of time or vehicle mileage used–that they stand behind their product, and that repairs and replacements will be made to correct specific defects or malfunctions free of charge during the warranty period.

Passed by Congress in 1975 and enforced by the Federal Trade Commission (FTC), MMWA was enacted to protect and empower consumers in the following ways.

First, it ensures that consumers have access to complete information about warranty terms and conditions by requiring manufacturers and car dealerships to clearly disclose any terms of the vehicle warranty to the consumer in clear language before the bargaining process begins, to avoid the appearance of deceptive practices.

Second, the mandate ensures that consumers have access to the resources to compare warranty coverage before buying, thereby providing consumers with the freedom to select a product that best fits their needs which includes price, features, and warranty coverage.

Third, MMWA promotes sales promotion by assuring that consumers can comparison shop.  It  also promotes healthy competition among manufacturers and dealerships which in turn strengthens incentives for dealerships to fulfill their warranty obligations in a timely manner to meet consumers’ needs.

HOW DOES MMWA BENEFIT CONSUMERS?

Many consumers adhere to a misconception that they must return to the same dealership where they purchased their vehicle for routine maintenance such as oil changes, tire rotations, belt replacements, fluid checks and flushes, new brake pads and inspections and repairs, or else the warranty will become null and void.  According to the FTC, it is illegal for a dealer or manufacturer to deny a warranty claim or void warranty coverage because maintenance or repairs were performed by someone else, such as the owner of the vehicle, an independent mechanic or chain shop.

Additionally, MMWA makes it illegal for a dealer or manufacturer to void a warranty or deny coverage during the warranty period because aftermarket or recycled parts, which are oftentimes less expensive, were used instead of original equipment manufacturer (OEM) parts for repairs.

There is one exception. The dealer or manufacturer can require the consumer to use select parts if they were provided to the consumer free of charge. Moreover, if the aftermarket or recycled part used in the repair was defective or was not installed correctly and caused damage to a part that is covered by the warranty, the dealer or manufacturer has the right to deny coverage for that part and charge the consumer for subsequent repairs.

However, the burden of proof falls on the dealer or manufacturer to show that the damage was caused by the aftermarket or recycled part before warranty coverage can be denied.

Moreover, MMWA prohibits tying consumers to any specific brand, thereby offering the consumer freedom of choice of where they take their vehicle for repairs and which parts they can select.

Once your vehicle purchase is complete, you can empower yourself by reading your owner’s manual thoroughly to be sure you understand the parameters of any existing warranty.  The California Department of Consumer Affairs through the California Bureau of Automotive Repair (BAR) has helpful information such as a list of links containing manufacturer-specific warranty information and the Top 5 Reasons to Read Your Owner’s Manual on their website.

Before having regular maintenance or repairs made to your vehicle, it’s best to “check the shop before you stop.”  Visit the BAR website at www.bar.ca.gov to find a licensed professional repair facility near you.

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