Michigan
Lemon Law
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The following information
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It does not replace any official versions
of this information. (Mich Dept of
Attorney General Web Site - www.ag.state.mi.us)
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The Lemon Law provides a remedy for
buyers of new cars and trucks that
experience an excess of mechanical
conditions. The law imposes a duty
of repair upon the manufacturer, agent
or dealer. If the manufacturer or
dealer is unable to repair the problem
after a reasonable number of attempts,
or if the vehicle is out of service
for more than 30 days, then the buyer
may elect a refund of the purchase
price (including sales tax) or a comparable
replacement vehicle. Prior to refund
or replacement, the buyer must first
participate in any mediation procedure
that the manufacturer has established.
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MCL 257.1401; MSA
9.2705(1)
MICHIGAN LEMON LAW
Act 87 of 1986
AN ACT regarding
warranties on new motor vehicles;
to require certain repairs to new
motor vehicles; to provide remedies
for the failure to repair such vehicles;
and to prescribe duties for certain
state agencies.
History: 1986, Act
87, Eff. June 25, 1986;--Am. 1998,
Act 486, Imd. Eff. Jan. 4, 1999;--Am.
1998, Act 487, Imd. Eff. Jan. 4, 1999.
The People of the
State of Michigan enact:
MCL 257.1401
NEW MOTOR VEHICLE
WARRANTIES
Definitions.
Sec. 1. As used in
this act:
(a) "Consumer"
means 1 or moer of the following:
(i) A person who purchases or leases
a new motor vehicle for personal,
family, or household use and not for
the purpose of selling or leasing
the new motor vehicle to another person.
(ii) A person who purchases less than
10 new motor vehicles a year.
(iii) A person who
purchases 10 or more new motor vehicles
a year only if the vehicles are purchased
for personal, family, or household
use.
(iv) Any other person
entitled to enforce the provisions
of an express warranty pursuant to
the terms of that warranty.
(b) "Lessee" means a person
who, under a lease, acquires the right
to possession and use of a new motor
vehicle.
(c) "Lessor" means a person
who, under a lease, transfers the
right to possession and use of a new
motor vehicle.
(d) "Manufacturer"
means any person who manufactures,
assembles, or is a distributor of
new motor vehicles and includes an
agent of a manufacturer but does not
include a new motor vehicle dealer.
(e) "Manufacturer's
express warranty" means an express
warranty as determined under the uniform
commercial code, 1962 PA 174, MCL
440.1101 to 440.11102, offered by
the manufacturer on a new motor vehicle.
(f) "Motor vehicle"
means a motor vehicle as defined in
section 33 of the Michigan vehicle
code,1949 PA 300, MCL 257.33, that
is designed as a passenger vehicle,
or sport utility vehicle, but does
not include a motor home, bus, truck
other than a pickup truck or van,
or a vehicle designed to travel on
less than 4 wheels.
(g) "New motor
vehicle" means a motor vehicle
that is purchased or leased in this
state or purchased or leased by a
resident of this state and is covered
by a manufacturer's express warranty
at the time of purchase or lease.
(h) "New motor
vehicle dealer" means a person
or that person's agent who holds a
dealer agreement for the sale of new
motor vehicles, who is engaged in
the business of purchasing, leasing,
selling, exchanging, or dealing in
new motor vehicles, and who has an
established place of business in this
state.
(j) "Resident
of this state" means as follows:
(i) For an individual, an individual
who is a legal resident of this state.
(ii) For a sole proprietorship or
partnership, a sole proprietorship
or partnership created pursuant to
the laws of this state and its main
office is located in this state.
(iii) For a corporation,
a corporation that is a domestic corporation
and was created under the laws of
this state.
(iv) For an association,
an association created pursuant to
the laws of this state and its main
office is located in this state.
(v) For a unit or
agency of government, a unit or agency
of government located in this state.
(vi) For a trust,
estate, or other legal entity, a trust,
estate, or other legal entity created
pursuant to the laws of this state
and that is located in this state.
(k) "Lease price" means
the actual vehicle sales price paid
by the lessor including any cash payment
by the consumer and the sum equal
to any allowance for any trade-in
but excludes debt from any other transaction
as well as any manufacturer to consumer
discount, rebate, or incentive appearing
in the agreement or contract that
the consumer received or that was
applied to reduce the purchase or
lease cost. Additionally, any sales
tax, license and registration fees,
and similar government charges not
included elsewhere paid by the lessor
on behalf of the lessee are included
as a part of lease price.
(l) "Purchase price" means
the actual vehicle sales price listed
on the buyer's order including any
cash payment by the consumer and the
sum equal to any allowance for any
trade-in but excludes debt from any
other transaction as well as any manufacturer
to consumer discount, rebate, or incentive
appearing in the agreement or contract
that the consumer received or that
was applied to reduce the purchase
cost. Additionally, any sales tax,
license and registration fees, and
similar government charges not included
elsewhere paid by the consumer are
included as a part of purchase price.
History: 1986, Act
87, Eff. June 25, 1986;--Am. 1998,
Act 486, Imd. Eff. Jan. 4, 1999.
MCL 257.1402. Repair
of defect or condition; report.
Sec. 2. If a new
motor vehicle has any defect or condition
that impairs the use or value of the
new motor vehicle to the consumer
or which prevents the new motor vehicle
from conforming to the manufacturer's
express warranty, the manufacturer
or a new motor vehicle dealer of that
type of motor vehicle shall repair
the defect or condition as required
under section 3 if the consumer initially
reported the defect or condition to
the manufacturer or the new motor
vehicle dealer within 1 of the following
time periods, whichever is earlier:
(a) During the term the manufacturer's
express warranty is in effect.
(b) Not later than 1 year from the
date of delivery of the new motor
vehicle to the original consumer.
History: 1986, Act 87, Eff. June 25,
1986.
MCL 257.1403. Replacement of motor
vehicle or refund; allowance for use;
reimbursement for towing costs and
costs for rental vehicle; consent
to replacement of security interest;
presumption; performing repairs after
expiration of warranty; extension
of time for repair services.
Sec. 3. (1) If a
defect or condition that was reported
to the manufacturer or new motor vehicle
dealer pursuant to section 2 continues
to exist and the new motor vehicle
has been subjected to a reasonable
number of repairs as determined under
subsection (5), the manufacturer shall
within 30 days, do either of the following
as applicable:
(a) If the new motor vehicle was purchased,
either replace the new motor vehicle
with a comparable replacement motor
vehicle currently in production and
acceptable to the consumer or accept
return of the vehicle and refund to
the consumer the purchase price. A
consumer shall have the right to demand
a refund.
(b) If the new motor vehicle was leased,
the consumer has the right to a refund
of the lease price paid by the consumer.
The consumer may agree to accept a
comparable replacement vehicle in
lieu of a refund for the lease price
paid. If the consumer agrees to accept
a replacement vehicle, the lease agreement
shall not be altered except with respect
to the identification of the vehicle.
(2) The purchase price or lease price
includes the cost of any options or
other modifications installed or made
by or for the manufacturer, and the
amount of all other charges made by
or for the manufacturer, less a reasonable
allowance for the consumer's use of
the vehicle, and less an amount equal
to any appraised damage that is not
attributable to normal use or to the
defect or condition. A reasonable
allowance for use is the purchase
or lease price of the new motor vehicle
multiplied by a fraction having as
the denominator 100,000 miles and
having as the numerator the miles
directly attributable to use by the
consumer and any previous consumer
prior to his or her first report of
a defect or condition that impairs
the use or value of the new motor
vehicle plus all mileage directly
attributable to use by a consumer
beyond 25,000 miles. If a vehicle
is replaced or refunded under the
provisions of this section, if towing
services and rental vehicles were
not made available without cost to
the consumer, the manufacturer shall
also reimburse the consumer for those
towing costs and reasonable costs
for a comparable rental vehicle that
were incurred as a direct result of
the defect or condition.
(3) If a court or an alternative dispute
settlement procedure described in
section 5 determines that a consumer
has provided sufficient evidence that
the vehicle did not provide reliable
transportation for ordinary personal
or household use for any period beyond
the first 25,000 mileage usage period
of the vehicle, the court or the alternative
dispute settlement procedure may reduce
the vehicle usage deduction for mileage
beyond the first 25,000 mileage usage
period only for the period beyond
the 25,000 mileage usage period that
the court or alternative dispute settlement
procedure determines that the vehicle
did not provide useful transportation
for ordinary personal or household
use. To determine if the vehicle did
or did not provide useful transportation
for ordinary personal and household
use, the court or the alternative
dispute settlement procedure shall
consider all of the following:
(a) The number of repairs.
(b) The cost of the repairs.
(c) The number of
days the vehicle was out of service.
(d) Whether the vehicle's
need for repair significantly affected
the consumer's ability to use the
vehicle for personal or household
functions.
(4) The provisions of this act do
not affect the obligations of a consumer
under a loan, sales, or lease contract
or the secured interest of a secured
party. The secured party shall consent
to the replacement of the security
interest with a corresponding security
interest on a replacement motor vehicle
that is accepted by the consumer in
exchange for the motor vehicle having
a defect or condition pursuant to
subsection (1), if the replacement
motor vehicle is comparable in value
to the original motor vehicle. If
for any reason the security interest
in the new motor vehicle having a
defect or condition pursuant to subsection
(1) is not able to be replaced with
a corresponding security interest
on a new motor vehicle accepted by
the consumer, the consumer shall accept
a refund. A refund required under
this subsection or subsection (1)
shall be made to the consumer and
the secured party, if any, as their
interests exist at the time the refund
is to be made. The lessor, if any,
shall be notified if a refund is made
to a lessee under this act. A lessor
shall not assess a fee for early termination
of a lease under this act.
(5) It shall be presumed that a reasonable
number of attempts have been undertaken
to repair a defect or condition if
1 of the following occurs:
(a) The same defect or condition that
substantially impairs the use or value
of the new motor vehicle to the consumer
has been subject to repair a total
of 4 or more times by the manufacturer
or new motor vehicle dealer within
2 years of the date of the first attempt
to repair the defect or condition,
and the defect or condition continues
to exist. Any repair performed on
the same defect made pursuant to subsection
(6) shall be included in calculating
the number of repairs under this section.
The consumer or his or her representative,
before availing himself or herself
of a remedy provided under subsection
(1), and any time after the third
attempt to repair the same defect
or condition, shall give written notification,
by return receipt service, to the
manufacturer of the need for repair
of the defect or condition in order
to allow the manufacturer an opportunity
to cure the defect or condition. The
manufacturer shall notify the consumer
as soon as reasonably possible of
a reasonably accessible repair facility.
After delivery of the vehicle to the
designated repair facility, the manufacturer
has 5 business days to repair the
defect or condition.
(b) The new motor vehicle is out of
service because of repairs for a total
of 30 or more days or parts of days
during the term of the manufacturer's
express warranty, or within 1 year
from the date of delivery to the original
consumer, whichever is earlier. The
consumer, or his or her representative,
before availing himself or herself
of a remedy provided under subsection
(1), and after the vehicle has been
out of service for at least 25 days
in a repair facility, shall give written
notification by return receipt service
to the manufacturer of the need for
repair of the defect or condition
in order to allow the manufacturer
an opportunity to cure the defect
or condition. The manufacturer shall
notify the consumer as soon as reasonably
possible of a reasonably accessible
repair facility. After delivery of
the vehicle to the designated repair
facility, the manufacturer has 5 business
days to repair the defect or condition.
(6) Any repairs required to be made
under this act shall be made even
if the repairs need to be performed
after the expiration of the manufacturer's
express warranty. The defect needing
repair must be a continuation of the
original attempt to repair the defect.
(7) The term of an express warranty,
and the 1-year, 30-day, and 5-day
periods of time provided for in this
section shall be extended because
repair services were not available
to the consumer because of war, invasion,
strike, fire, flood, or other natural
disaster.
History: 1986, Act
87, Eff. June 25, 1986;--Am. 1998,
Act 486, Imd. Eff. Jan. 4, 1999.
257.1404 Other legal remedies not
limited or prohibited.
Sec. 4. Nothing in
this act shall be construed to limit
or prohibit any other legal remedy
of a consumer regarding a breach of
a manufacturer's express warranty
or an implied warranty for a new motor
vehicle.
History: 1986, Act
87, Eff. June 25, 1986.
257.1405 Informal
dispute settlement procedure.
Sec. 5. If a manufacturer
has established or participates in
an informal dispute settlement procedure,
the provisions of this act shall not
apply to any consumer who has not
first resorted to such procedure,
if such procedure does all of the
following:
(a) Complies with
the Magnuson-Moss warranty--federal
trade commission improvement act,
Public Law 93-637, 88 Stat. 2183,
and 16 C.F.R. 703 (1975). An informal
dispute settlement procedure which
the federal trade commission rules
does not comply with 16 C.F.R. 703
(1975) shall be considered as not
meeting the requirements of this subdivision.
(b) Requires that
the manufacturer is bound by any decision
reached if the consumer agrees to
it.
(c) Provides that
the consumer is not obligated to accept
the decision and may pursue the remedies
provided for under this act.
(d) Requires the
manufacturer to initiate the process
necessary to implement any final settlement
not more than 30 days after the settlement
has been reached.
History: 1986, Act
87, Eff. June 25, 1986.
257.1406 Defects or conditions to
which act inapplicable.
Sec. 6 . This act
does not apply to a defect or condition
that is the result of either of the
following:
(a) A modification not installed or
made by or for the manufacturer.
(b) Abuse or neglect of the new motor
vehicle or damage due to an accident
that occurred after the new motor
vehicle was purchased or leased by
the consumer.
History: 1986, Act 87, Eff. June 25,
1986;--Am. 1998, Act 487, Imd. Eff.
Jan. 4, 1999
257.1407 Waiver of rights and remedies
prohibited; recovery of costs, expenses,
and attorneys' fees.
Sec. 7. (1) Any rights
and remedies provided a consumer under
this act may not be waived.
(2) A consumer who prevails in any
action brought under this act may
be allowed by the court to recover
as part of the judgment a sum equal
to the aggregate amount of cost and
expenses, including attorneys' fees
based on actual time expended by the
attorney, determined by the court
to have been reasonably incurred by
the consumer for or in connection
with the commencement and prosecution
of such action, unless the court in
its discretion shall determine that
such an award of attorneys' fees would
be inappropriate.
History: 1986, Act 87, Eff. June 25,
1986
257.1408 Written
statement to be included with title;
type size; form.
Sec. 8.(1) Until
December 31, 1999 and after as provided
in subsection (2), the secretary of
state shall include with any title
for a new motor vehicle a written
statement, in 10-point boldfaced type,
in substantially the following form:
"IMPORTANT:
IF THIS VEHICLE IS DEFECTIVE YOU MAY
BE ENTITLED UNDER STATE LAW TO REPLACEMENT
OF IT OR A REFUND OF ITS PURCHASE
PRICE. TO OBTAIN REPLACEMENT OR A
REFUND, YOU MUST FIRST REPORT THE
DEFECT IN WRITING TO THE MANUFACTURER
AND YOU MAY BE REQUIRED TO FIRST ARBITRATE
THE DISPUTE. IN ORDER TO PROTECT YOUR
RIGHTS UNDER THIS LAW, YOU SHOULD:
1. KEEP COPIES OF ALL CORRESPONDENCE
TO AND FROM THE MANUFACTURER AND THE
DEALER.
2. KEEP COPIES OF ALL WORK ORDERS
FOR REPAIRS ON THE VEHICLE INCLUDING
THE DATE(S) THE WORK WAS PERFORMED
AND THE MILEAGE ON THE VEHICLE AT
THE TIME OF REPAIR.
3. FOLLOW ALL REQUIREMENTS
OF THE WARRANTY, INCLUDING ANY REQUIREMENT
THAT THE REPAIRS MUST BE DONE BY AN
AUTHORIZED DEALER SPECIFIED BY THE
MANUFACTURER. IF YOU HAVE ANY QUESTIONS
REGARDING YOUR RIGHTS UNDER THIS LAW,
CONSULT AN ATTORNEY OR OTHER QUALIFIED
INDIVIDUAL."
(2) Beginning January 1, 2000, the
secretary of state shall include with
documentation for a purchased or leased
new motor vehicle a written statement,
in 10-point boldfaced type, in substantially
the following form:
"IMPORTANT: IF THIS VEHICLE IS
DEFECTIVE YOU MAY BE ENTITLED UNDER
STATE LAW TO REPLACEMENT OF IT OR
A REFUND OF ITS PURCHASE PRICE OR
LEASE PRICE, AS APPLICABLE. TO OBTAIN
REPLACEMENT OR A REFUND, YOU MUST
FIRST REPORT THE DEFECT IN WRITING
TO THE MANUFACTURER AND YOU MAY BE
REQUIRED TO FIRST ARBITRATE THE DISPUTE.
IN ORDER TO PROTECT YOUR RIGHTS UNDER
THIS LAW, YOU SHOULD:
1. KEEP COPIES OF ALL CORRESPONDENCE
TO AND FROM THE MANUFACTURER AND THE
DEALER.
2. KEEP COPIES OF ALL WORK ORDERS
FOR REPAIRS ON THE VEHICLE INCLUDING
THE DATE(S) THE WORK WAS PERFORMED
AND THE MILEAGE ON THE VEHICLE AT
THE TIME OF REPAIR.
3. FOLLOW ALL REQUIREMENTS
OF THE WARRANTY, INCLUDING ANY REQUIREMENT
THAT THE REPAIRS MUST BE DONE BY AN
AUTHORIZED DEALER SPECIFIED BY THE
MANUFACTURER. IF YOU HAVE ANY QUESTIONS
REGARDING YOUR RIGHTS UNDER THIS LAW,
CONSULT AN ATTORNEY OR OTHER QUALIFIED
INDIVIDUAL."
(3) Beginning January 1, 2000, the
secretary of state shall include a
summary of the provisions of this
act on a database that is accessible
to the public through the internet.
As used in this section, "internet"
means a worldwide interconnection
of individual computers and computer
networks and the facilities and equipment
used to access those interconnected
networks.
History: 1986, Act 87, Eff. June 25,
1986;--Am. 1998, Act 487, Imd. Eff.
Jan. 4, 1999.
257.1409 Applicability
of act.
Sec. 9. This act
shall apply to all new motor vehicles
that are sold to the original consumer
on or after the effective date of
this act.
History: 1986, Act
87, Eff. June 25, 1986.
257.1410 Effect.
Sec. 10. This act
shall take effect 60 days after its
enactment.
History: 1986, Act
87, Eff. June 25, 1986;--Am. 1998,
Act 486, Imd. Eff. Jan. 4, 1999;--Am.
1998, Act 487, Imd. Eff. Jan. 4, 1999.
