What is the Lemon Law for Cars? Your Guide to Vehicle Defects

Have you purchased or leased a new car only to find yourself constantly dealing with unresolved issues? It can be incredibly frustrating when your brand-new vehicle isn’t performing as expected, despite repeated trips to the repair shop. Fortunately, if you’re in Texas, the Lemon Law may offer a solution.

The Texas Lemon Law, officially administered by the Texas Department of Motor Vehicles, is designed to protect consumers like you who buy or lease new motor vehicles and experience persistent problems that the manufacturer fails to fix under the original warranty. This law provides a pathway to get your vehicle repurchased, replaced, or repaired, often in a less complicated and less expensive manner than pursuing legal action in court.

What Types of Vehicles are Covered Under the Lemon Law?

The Texas Lemon Law is quite comprehensive in terms of vehicle types it covers. It includes:

Cars, trucks, and vans: Standard passenger vehicles.
Motorcycles and all-terrain vehicles (ATVs): For both on-road and off-road recreational use.
Motor homes: Self-propelled recreational vehicles.
Towable recreational vehicles (TRVs): Travel trailers and fifth-wheel trailers designed to be towed.
Neighborhood electric vehicles (NEVs): Low-speed electric vehicles typically used in planned communities.
Demonstrator vehicles: Even vehicles used for test drives but never previously titled are considered new vehicles under the law.

However, it’s important to note what is not covered. The Lemon Law does not apply to:

Repossessed vehicles: Vehicles that have been taken back by a lender.
Non-travel trailers: Utility trailers or trailers not designed for recreational travel.
Boats: Watercraft of any kind.
Farm equipment: Tractors, harvesters, and other agricultural machinery.
Minor defects: Issues that don’t significantly affect the vehicle’s use or market value, such as minor rattles or radio static. These are typically considered normal wear and tear or minor inconveniences, not “lemon” defects.

Does the Lemon Law Apply to Used Cars?

Generally, the Texas Lemon Law is specifically for new vehicles. However, there are some situations where a used vehicle might have some protection under related state laws.

If your used car is still under the original manufacturer’s warranty (not an extended warranty or service contract), or if a defect arose and was reported to the dealer while the original warranty was still active, you may have rights. Even if you bought a used vehicle, if the problem originated during the new car warranty period and was properly reported, you might be able to seek repair assistance for that specific issue. It’s crucial to check the warranty paperwork and dates to determine if any original manufacturer’s warranty remains.

How to Determine if Your Car Qualifies as a Lemon

To be considered a “lemon” under the Texas Lemon Law, your vehicle must meet specific criteria. Here are the key conditions:

Substantial Manufacturing Defect: The vehicle must have a significant defect stemming from its manufacturing or assembly process.
Warranty Coverage: This defect must be covered by the manufacturer’s original written warranty.
Timely Reporting: You must report the defect to the dealership or manufacturer within the warranty period.
Reasonable Repair Attempts: You must provide the dealer with a “reasonable number of attempts” to fix the defect.
Manufacturer Notification: Crucially, you must give the manufacturer written notice, preferably via certified mail, outlining the defect and providing them with at least one opportunity to resolve it. A sample letter is often recommended for this purpose to ensure you include all necessary information.
Persistent Defect and Impact: Despite these repair attempts, the defect must persist and substantially impair the vehicle’s use, market value, or create a serious safety hazard. This means the problem isn’t just a minor annoyance; it genuinely affects the vehicle’s functionality, resale value, or puts you at risk.

Car Repair in Auto Repair Shop

What Constitutes a “Reasonable Number of Repair Attempts”?

The law provides clear guidelines to determine if a “reasonable number of attempts” have been made. You meet this criterion if your vehicle passes one of these tests: the “four-times test,” the “serious safety-hazard test,” or the “30-day test.” Mileage requirements generally don’t apply to TRVs or vehicles without odometers.

The Four-Times Test

You pass the four-times test if:

You’ve taken your vehicle to an authorized dealership for repairs four or more times for the same defect within the first 24 months or 24,000 miles, whichever comes first.
And, after all those attempts, the defect still remains unfixed.

The Serious Safety-Hazard Test

A “serious safety hazard” is defined as a life-threatening malfunction that significantly impairs your ability to control or safely operate the vehicle, or creates a substantial risk of fire or explosion.

You pass the serious safety-hazard test if:

You’ve taken the vehicle in for repair of a serious safety hazard twice or more during the first 24 months or 24,000 miles, whichever comes first.
And the serious safety hazard continues to exist after these attempts.

The 30-Day Test

You pass the 30-day test if your vehicle has been out of service for repairs due to defects covered by the original factory warranty for a significant period. Specifically:

If your car has been in the repair shop for a cumulative total of 30 days or more within the first 24 months or 24,000 miles. This doesn’t have to be consecutive days.
Important Note: If the dealership provided you with a comparable loaner vehicle while your car was being repaired, that repair time does not count towards the 30 days.
And, after all this time in repair, a substantial defect still exists.

Time Limits for Filing a Lemon Law Claim

It’s crucial to be aware of the deadlines for filing a Lemon Law complaint. You must file your complaint within six months following whichever of these occurs earliest:

Expiration of the express warranty term: The end date of your original factory warranty.
24 months after purchase: Two years from the date you bought the vehicle.
24,000 miles following vehicle delivery: Once your vehicle reaches 24,000 miles (this mileage limit generally doesn’t apply to TRVs).

The filing period is determined by whichever of these milestones you reach first. To be on the safe side and protect your rights, it’s advisable to file a complaint as soon as you realize that the dealership is struggling to properly repair your vehicle and you meet the “lemon” criteria. Don’t wait until the last minute!

What Resolution Can You Expect if You Win Your Lemon Law Case?

If the Texas Department of Motor Vehicles rules in your favor in a Lemon Law case, the law outlines potential remedies. Keep in mind that each case is evaluated based on its specific facts, and the department makes decisions accordingly.

If you win, the department can order one of the following outcomes (note that only new vehicles are eligible for refunds or replacements):

Refund (Buyback)

The manufacturer is required to buy back your vehicle.
You will receive a refund of the original purchase price, which includes taxes, title, and license fees.
However, a deduction is applied to account for your use of the vehicle. This “usage fee” is calculated using a formula that considers the mileage at the time of the hearing and other relevant factors.
Important: Refunds typically do not include any interest you paid on a vehicle loan.

Replacement

The manufacturer must replace your defective vehicle with a comparable new vehicle.
This replacement vehicle should be of similar make, model, and include comparable accessories to your original vehicle. It must also be acceptable to you, the consumer.
A deduction for mileage used may also apply in replacement scenarios.
You are responsible for any costs associated with upgrading to a more expensive vehicle if you choose to do so.

Repair

In some cases, instead of a buyback or replacement, the department may order the manufacturer to repair the defects in your vehicle.
You may also be eligible for reimbursement of out-of-pocket expenses you incurred for repairs that should have been covered under the warranty.

Navigating vehicle defects and warranty issues can be stressful. Understanding the Texas Lemon Law is your first step toward potentially resolving ongoing problems with a new vehicle. If you believe your car might be a lemon, familiarize yourself with the law’s requirements and consider seeking assistance to explore your options.