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Minnesota Car Laws

Minnesota's Lemon Law

Popularly known as the “lemon law,” Minnesota’s motor vehicle warranty statute was created to help protect you when you buy or lease a car, pickup truck, or van that is still under the original manufacturer’s warranty. The law is not intended to eliminate all problems you will ever encounter with your vehicle. What it does do is require manufacturers to honor the time and mileage provisions of their written warranties. The law also provides special arbitration, refund, and replacement provisions for vehicles that are considered to be real “lemons.”

Which Motor Vehicles Are Covered?

The Minnesota lemon law covers new and lightly used motor vehicles purchased or leased in Minnesota. The law covers passenger automobiles, as well as pickup trucks and vans. The motor vehicle chassis or van portion of a recreational vehicle (RV) is also covered. That means that as long as the “lemon” problem occurs in portions of the chassis and van covered by the warranty, the entire RV may be subject to replacement or refund. It does not cover other areas, such as living areas or other amenities, that may have been added to the chassis by the RV manufacturer. It also covers used vehicles that are still under the original manufacturer’s warranty. The vehicles must be used at least 40 percent of the time for personal, family, or household purposes (leased vehicles are covered by the law if the lease term is longer than four months).

The first report of a defect must occur within the warranty period, or two years, whichever comes first. If you have continuing problems with the same defect, however, you still can make a claim until the end of the third year.

The Manufacturer’s Duty to Repair

The manufacturer or its authorized dealer must repair a motor vehicle in accordance with the terms of the warranty, even after the manufacturer’s warranty has expired, if:

  1. The motor vehicle has a defect or problem that is covered by the warranty; and,
  2. The problem has been reported by the vehicle’s owner within the warranty period, or within two years after original delivery of the vehicle, whichever comes first.

The Manufacturer’s Duty to Refund or Replace

The law has special refund and replacement provisions for cars that have substantial defects or problems. Such vehicles are commonly called “lemons.” Under the law, if the manufacturer or its authorized dealer has been unable to repair a car’s problem after a “reasonable number of attempts,” the buyer or lessee may go through a manufacturer’s arbitration program, or to court, to seek a replacement vehicle or a full refund of the car’s purchase price (minus a deduction for use of the vehicle). The law presumes a “reasonable number of attempts” to include any one of the following:

  1. Four or more unsuccessful attempts to repair the same defect; or,
  2. One unsuccessful attempt to repair a defect that has caused the complete failure of the steering or braking system and that is likely to cause death or serious bodily injury; or,
  3. A car that has been out of service due to warranty repairs for 30 or more cumulative business days.

In each case, the initial defect must occur within the warranty period, or two years following the original delivery date, whichever comes first, but the manufacturer’s repair attempts may extend to the end of the third year. Even if your repair history does not fall into one of the above categories, you may still have a lemon law claim, but it will be harder to prove.

When Refunds or Replacements Are Not Given

Be aware that the manufacturer does not have to make a refund or replace the vehicle if:

Refund and Replacement Eligibility Requirements

Just because a repair shop has made a number of unsuccessful attempts to fix your car, you are not automatically eligible for a refund or replacement vehicle. You must first:

The manufacturer may require you to first go through the arbitration program before filing a lawsuit under the lemon law. Check with the manufacturer or the Minnesota Attorney General’s Consumer Division if you have questions about a manufacturer’s arbitration program.

If You Are Awarded a Refund

If you are awarded a refund under the terms of the lemon law, the manufacturer must refund:

  1. The full purchase price of the vehicle, or the amount you actually paid on your lease. For either a purchased or leased vehicle, however, a reasonable allowance for the time that you were able to use the vehicle may be deducted. This deduction cannot exceed 10 cents per mile or 10 percent of the purchase price, whichever is less;
  2. The cost of certain options installed by the manufacturer or dealer;
  3. Sales or excise tax;
  4. License fees;
  5. Registration fees;
  6. Reimbursement for towing; and,
  7. Rental expenses.

Note: If you are awarded a replacement vehicle, you have the option of receiving a refund instead.

Arbitration

Automobile manufacturers doing business in Minnesota must offer consumers an arbitration program located in the State of Minnesota that considers consumers’ warranty related disputes.

A manufacturer’s arbitration program provides consumers a fast and simple way to resolve disputes. Arbitrators can consider arguments based on the lemon law. That being said, an arbitrator is not a judge and is not required to apply the law the way a court would.

If the manufacturer requires it, consumers must first go through the manufacturer’s arbitration program before filing a lawsuit under the lemon law. You may not have to wait until all the lemon law criteria are met before going through arbitration, but you might have a stronger case if all the criteria are met.

In fact, you may not even want to discuss the lemon law in arbitration if your car does not meet the lemon law criteria.

Consumer Rights During the Arbitration Process:

Using the Lemon Law in Arbitration or Court

To prepare for a dispute you should:

  1. Keep copies of all purchase orders, sales receipts, lease agreements, warranties, repair invoices, letters, and other documents concerning your vehicle and any of its problems or potential defects.
  2. If your vehicle is in the shop for repairs for more than one day at a time, make sure that the repair invoice shows the date it was brought in and the date you were notified that it was ready to be returned.
  3. If you think you are eligible for a refund or replacement vehicle, remember the law requires written notice be given to the manufacturer or authorized dealer. You should send a letter by certified mail with a return receipt requested. If you send the letter to the dealer, send a copy to the manufacturer and keep a copy for your records. You should include the following information in your letter:
    • Your name, address, and telephone number.
    • The date you purchased or began leasing the automobile.
    • A list of defects and systems affected.
    • The number of times the vehicle has been subject to repairs for the same problem, and the dates of the repairs.
    • A statement that the defect still exists as of the date of the letter.
    • A reference to the lemon law (Minnesota Statutes section 325F.665) and a statement that you will pursue a replacement or refund claim under this law if the vehicle is not made to conform to the warranty.
    • A request for information about the company’s arbitration program.

Remember, the refund and replacement provisions of the lemon law are intended to provide a replacement or a refund only in the cases of the most serious defects—faults that substantially impair the use or market value of the vehicle, or faults that involve life-threatening failures of the braking and steering systems.

If You Sue

If you feel you must bring a lawsuit under the lemon law for a refund or replacement vehicle, you should consult an attorney (you may be eligible to recover attorney fees if you win). The law allows you to file suit any time within three years of the date of the original delivery of the vehicle, if you first reported the defect within the warranty period, or two years, whichever comes first. If you go through a manufacturer’s arbitration program, you have six months to appeal in court. The company has only 30 days to appeal in court.

Arbitration Program Telephone Numbers

These numbers are accurate as of April 2017. If the listed program no longer works with your manufacturer, check your owner’s manual, or call your dealer or manufacturer for updated information.

Better Business Bureau’s Auto Line Arbitration Program: (800) 955-5100
(see list of manufacturers below)

FCA US (Chrysler, Dodge, Fiat, Jeep, Ram): (866) 662-4639

Toyota (Lexus): (800) 777-8119

Mitsubishi: (866) 662-8119

Porsche: (800) 279-5343

Suzuki: (866) 662-4639

Tesla: (866) 629-3204

The following manufacturers and distributors currently participate in arbitration programs administered by the Better Business Bureau: Acura, Audi, Bentley (Rolls-Royce), BMW, Ducati, Ford Motors (Ford, Lincoln, Mercury), General Motors (Buick, Cadillac, Chevrolet, GMC Truck, Pontiac, Saturn), Honda, Hyundai, Infiniti, Jaguar, Kia, Lamborghini, Land Rover, Lotus, Maserati, Mazda, Mercedes-Benz, Mini Cooper, Mobility Ventures (AM General), Nissan, Oldsmobile, Subaru, Volkswagen, and Volvo.

There Is No Three-Day Right to Cancel...

If we could impart just one piece of information, it would be to remind you that there is no three-day right to cancel a car contract. Once you sign on the dotted line, the car is yours. The Minnesota Attorney General’s Office hears from many consumers every Monday morning who assume they can still return the car they bought Friday night. They can’t, and have to learn this lesson the hard way. So, don’t be one of our remorseful Monday morning callers— remember: when you buy a car, it’s yours!