NEW YORK'S USED CAR LEMON LAW: A GUIDE FOR …

1 STATE OF NEW YORKOFFICE OF THE ATTORNEY GENERALNEW YORK'S USED CAR LEMON LAW:A GUIDE FOR CONSUMERSL etitia James Attorney General New YORK'S Used Car LEMON Law:A GUIDE for Consumers CONTENTSL emon Law for Used Cars Questions and Answers ! 3 Using the New York StateArbitration Program !18 The Used Car LEMON Law --General Business Law 198-b !21 Arbitration Program Regulations ! 30 Offices of the Attorney General ! 383 Used Car LEMON LawQuestions and IS THE PURPOSE OFTHE USED CAR LEMON LAW?The Used Car LEMON Law providesa legal remedy for buyers or lessees of usedcars that turn out to be lemons. The lawrequires dealers to give you a writtenwarranty. Under this warranty, a dealermust repair , free of charge, any defects incovered parts or, at the dealer s option,reimburse you for the reasonable costs ofsuch repairs.

2 If the dealer is unable to repairthe car after a reasonable number ofattempts, you are entitled to a full refund ofthe purchase price. No used car covered bythis law can be sold by a dealer "as is." (Acopy of the law may be found at the back ofthis book.) USED CARS ARECOVERED BY THE LEMONLAW?Under the law, a used car is onewhich satisfies all the following fiveconditions:(1) It was purchased, leased ortransferred after the earlier of (a)18,000 miles of operation or (b) twoyears from the date of originaldelivery; and(2) It was purchased or leased from aNew York dealer; and(3)It had a purchase price or lease valueof at least $1,500; and (4)It had been driven 100,000 miles orless at the time of purchase or lease;and(5) It is primarily used for MOTORCYCLES, MOTORHOMES AND OFF-ROADVEHICLES COVERED?

3 Effective September 1, 2004, usedmotorcycles are covered vehicles. Motorhomes, off-road vehicles, and "classic" carsregistered under section 401 of the vehicleand traffic law, are not covered. DOES THE PHRASE"PRIMARILY USED FORPERSONAL PURPOSES"MEAN?A car is primarily used for personalpurposes when its principal use is forpersonal, family or household purposes include, for example, usingthe car for household errands or to drive toand from work. A car may be used formixed personal and business use providedthat the personal use is predominant (morethan 50% of its usage). ELSE IS PROTECTED BYTHE USED CAR LEMON LAW?Any person to whom a used car wastransferred by the purchaser during the usedcar LEMON law warranty period is covered. PRIVATE SALES COVERED?No. If you bought your car from aprivate individual (rather than from adealer) you are not protected by the UsedCar LEMON Law.

4 You should consult alawyer for advice as to other possibleremedies. If the purchase price was $5,000or less, you may wish to pursue your claimin Small Claims Courts, except in Town andVillage Courts where the limit is $3,000,exclusive of interest and court costs. CARS OWNED ORLEASED BY BUSINESSESCOVERED?Yes, provided the car is primarilyused for personal, family or USED CAR DEALERSARE INCLUDED?Under the Used Car LEMON Law, adealer is any person or business which sellsor leases a used car after selling or leasingthree or more used cars in the previoustwelve month period. Banks or otherfinancial institutions, except in the case of alease, are not included. Others excludedare: a business selling a used car to its ownemployee; a regulated public utility whichsells at public auction cars used in theordinary course of its operations; a lessorselling a leased car to the lessee, a memberof the lessee's family or the lessee'semployee; and the state and localgovernment or any of their ARE CARS PURCHASED ATAUTO AUCTIONS COVERED?

5 Yes. If you buy a used car at a retailauto auction, the auction company must bea used car dealer registered with theDepartment of Motor Vehicles and it mustprovide you with your LEMON law DOES THE LAWREQUIRE THE DEALER TODO?A dealer who sells or leases you aused car is required to give you a writtenwarranty, the terms of which are specifiedin the law. The warranty may be referred toat times as a LEMON law warranty because itis required by the LEMON law and must behonored by the dealer. This warranty mustspecify that while it is in effect the dealer orhis agent will repair , free of charge, any partcovered by the warranty. The dealer mayelect to reimburse you for the reasonablecost of repairing any covered MUST THE LEMONLAW WARRANTY BE GIVEN?The dealer must give you a copy ofthe LEMON law warranty at or before the timeyou sign the sales contract or IS THE LEMON LAWWARRANTY GIVEN?

6 The LEMON law warranty may beincluded in the sales contract or lease or ona separate sheet of paper. If it is part of thesales contract or lease, it must be separatedfrom the other contract provisions andheaded by a conspicuous IF THE DEALER DOESNOT GIVE THE LEMON LAWWARRANTY?If a dealer fails to give you thewritten LEMON law warranty, the dealer isnevertheless considered to have given thewarranty and you are entitled to all theprotections under the LONG IS THE LEMONLAW WARRANTYPROTECTION?Miles at time of Duration of Purchase or Lease Warranty (theearlier of:18,001 to 36,000 90 days or 4,000 miles36,001 to 79,999 60 days or 3,000 miles80,000 to 100,000 30 days or 1,000 miles PARTS ARE COVERED?Covered parts must include at least:Engine --All lubricated parts, water pump,fuel pump, manifolds, engine block,cylinder head, rotary engine housings -- The transmission case,internal parts, and the torque Axle -- Front and rear axle housingsand internal parts, axle shafts, propellershafts and universal -- Master cylinder, vacuum assistbooster, wheel cylinders, hydraulic linesand fittings and disc brake -- The steering gear housing and allinternal parts, power steering pump, valvebody, piston and , Alternator, Generator, Starter,Ignition System (excluding battery).)

7 A DEALER LIMITCOVERAGE OF THE LEMONLAW WARRANTY?Yes. The law permits a dealer to addlanguage to the LEMON law warranty toexclude coverage for the following:(a) For a failure of a covered part causedby a lack of customary maintenance.(b) For a failure of a covered part causedby collision , abuse, negligence, theft,vandalism, fire or other casualty anddamage from the environment (windstorm,lightning, road hazards, etc.).(c) If the odometer has been stopped oraltered such that the car's actual mileagecannot be readily determined, or if anycovered part has been altered such that acovered part was thereby caused to fail.(d) For maintenance services for theparts used in connection with such servicessuch as seals, gaskets, oil and grease unlessrequired in connection with the repair of acovered part.

8 (e) For a motor tune-up.(f) For a failure resulting from racing or6other competition.(g) For a failure caused by towing atrailer or another vehicle unless the used caris equipped for this as recommended by themanufacturer.(h) If the used car is used to carrypassengers for hire.(i) If the used car is rented to someoneelse.(j) For repair of valves and/or rings tocorrect low compression and/or oilconsumption which are considered normalwear.(k) To the extent otherwise permitted bylaw, for property damage arising orallegedly arising out of the failure of acovered part.(l) To the extent otherwise permitted bylaw, for loss of the use of the used car, lossof time, inconvenience, commercial loss orconsequential YOUR RIGHTS UNDERTHE USED CAR LEMON LAWBE WAIVED?No. Any contract clause whichseeks to waive your rights under the UsedCar LEMON Law is A DEALER GIVEADDITIONAL WARRANTYPROTECTION?

9 Yes. A dealer may agree, as part ofthe sale or lease, to give you more warrantyprotection than the law requires. The lemonlaw warranty sets only minimumobligations for dealers. The dealer may offer to sell you anextended service contract which providesprotection beyond the LEMON law price of such extended service contractmay be negotiated with the SHOULD YOU DO IFYOU BECOME AWARE OF APROBLEM WITH YOUR USEDCAR?You should immediately report anymalfunction or defect of a covered part tothe dealer and request the necessary long as you have notified the dealer of aproblem within the LEMON law warrantyperiod, the warranty remains in YOU CONTINUE TOMAKE YOUR PAYMENTSWHILE YOU ARE PURSUINGYOUR RIGHTS UNDER THELEMON LAW?Yes. Unless otherwise advised byyour lawyer, if the car is financed or leased,you should continue to make your monthlypayments.

10 Failure to do so may result in arepossession which may lead to your beingunable to return the car to qualify for arefund under the repair DAYS EXTENDTHE WARRANTY PERIOD?Yes. The LEMON law warranty periodis extended for each day that the car is in theshop for ARE YOUR RIGHTS IFTHE DEALER DOES NOTREPAIR THE CAR?If the dealer fails to repair theproblem after a reasonable period of time,and if the problem substantially impairs thevalue of the used car to you, the dealer mustaccept the return of the car and make THE LAW SPECIFYWHAT CONSTITUTES A"REASONABLE PERIOD OFTIME" TO repair THE CAR?Yes. It is presumed that the dealerhas had a reasonable opportunity to repair aproblem if, during the LEMON law warrantyperiod, either: (a) the same problem hasbeen subject to repair three or more timesand the problem continues to exist at theend of the third repair attempt; or (b) the carwas out of service by reason of repair ormalfunction for a cumulative total of 15 ormore days for one or more problems.