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. The law 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).

For a vehicle to be covered, the defect must be reported within the warranty period, or two years, whichever comes first. If the defect is reported within this time period and 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 if the vehicle is driven; 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:

• The problem does not substantially impair the use or market value of the vehicle; or
• The problem is the result of abuse, neglect, or unauthorized modifications or alterations to the vehicle.

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:

• Write to the manufacturer or authorized dealer notifying them of the problem. Specifically state that your car is a lemon and that you want a refund or replacement under the lemon law. This does two things:
  1. It gives the company an opportunity to fix the defect (the manufacturer gets one more chance to fix the defect after notification); and
  2. It lets the company know you plan to use Minnesota’s lemon law if the defect is not properly repaired.
• Try to resolve the problem through the manufacturer’s automobile dispute arbitration program.

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:

• Lemon Law Information. You and the arbitrator(s) must receive a copy of this brochure from the manufacturer’s arbitration program.
• Lemon Law Arguments. You may make any arguments to the arbitrator(s) you think necessary to support your complaint, including those based on the lemon law. The arbitrator(s) cannot be discouraged or prohibited from considering your arguments.
• Documents.You are entitled to copies of all documents submitted to the arbitration program and have the opportunity to comment on any documents produced. You can request postponement of an arbitration meeting if documents are presented to you at the meeting that have not been previously provided to you.
• Oral Presentation. You must be given reasonable written notice of the arbitration and an opportunity to make an oral presentation to the arbitrator(s), unless you agree to a telephone conference or to submit the case on the basis of documents alone. If the case is based on documents alone, the manufacturer or dealer representative cannot participate in discussion or resolution of the dispute. You may get better results if you make a personal oral presentation to the arbitrator(s).
• Independent Appraisal. You must be given an adequate opportunity to get an independent appraisal, at your own cost, of any manufacturer claim that your vehicle does not have a problem or that your vehicle is operating within normal specifications.
• Repair Attempts. You must be given a chance to inform the arbitrator(s) about the results of any recent repair attempts by the manufacturer.
• Service Bulletins. You must be provided, at reasonable cost, any technical service bulletin that the manufacturer knows directly applies to the specific mechanical problem being disputed.
• Attorney. You have the right to be represented by an attorney in the arbitration process. Most arbitration participants, however, appear before the arbitrator(s) without an attorney. Attorney fees for representation in arbitration are not recoverable under the lemon law.
• Arbitration Decision. You are not bound by the decision of the arbitrator(s), unless you agree to be bound. That being said, many manufacturers have agreed to be bound by the arbitration decision. If you are unhappy with an arbitration decision, you may wish to consult an attorney to discuss filing a lawsuit under the lemon law. The arbitration decision is admissible as nonbinding evidence in any subsequent legal action. If you wish to appeal the arbitrator’s ruling in court, you must file in court within six months of the decision.
• Refund Amount. If the arbitrator(s) decides you should receive a refund or replacement vehicle under the terms of the lemon law, then you are entitled to the same refunds and reimbursements you would have received had you won in court.
• Bad Faith Appeal. If a court determines that you or the manufacturer acted in bad faith when you appealed an arbitration decision, the party that wins in court may be entitled to receive three times the actual damages, plus attorney fees and court costs.

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 or 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 2019. If the listed program no longer works with your manufacturer, check your owner’s manual, or call your dealer or manufacturer for updated information.

BBB AUTO LINE Arbitration Program: (800) 955-5100 or bbbautoline.org
(see list of manufacturers below)

The following manufacturers and distributors currently participate in arbitration programs administered by BBB AUTO LINE: Audi, Bentley (Rolls-Royce), BMW, Ducati, Ford Motors (Ford, Lincoln, Mercury), General Motors (Buick, Cadillac, Chevrolet, GMC Truck, Pontiac, Saturn), Hyundai (Genesis), Infiniti, Jaguar, Kia, Lamborghini, Land Rover, Lotus, Maserati, Mazda, Mercedes-Benz, Mini Cooper, Mobility Ventures (AM General), Nissan, Oldsmobile, Subaru, Volkswagen, Volvo, and more. See a full list of participants here: https://bbbprograms.org/programs/all-programs/bbb-autoline/participating-manufacturers.

The following manufacturers and distributors currently participate in arbitration programs administered by the National Center for Dispute Settlement.

Honda (Acura): (877) 545-0055

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

Toyota (Lexus): (866) 272-4872

Mitsubishi: (866) 937-3765

Porsche: (800) 279-5343

Suzuki: (888) 571-1837

Tesla: (866) 629-3204

 

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!