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Lemon Law

The North Carolina Lemon Law, also known as the New Motor Vehicles Warranties Act (N.C.G.S. 20-351), applies to new passenger cars, pick-up trucks, motorcycles and most vans bought in North Carolina. It requires manufacturers to repair defects that affect the use, value, or safety of a new motor vehicle within the first 24 months or 24,000 miles (whichever comes first).

Covered by the Lemon Law?

Your car may be covered by the Lemon Law if all of the following have happened:

  • The problem occurs in some part of the vehicle that is covered by the manufacturer’s warranty and you are within the warranty period. It does not need to be something that keeps you from being able to drive the car. For example, faulty air conditioning or peeling paint could be considered defects under the Lemon Law.
  • You tell the manufacturer about the problem in writing and give them a reasonable period, but not more than 15 days, to fix it.
  • The manufacturer makes “a reasonable number of attempts” to fix the vehicle. This means that the car has been repaired for the same problem four or more times, or that it has been out of service a cumulative total of 20 or more business days during a 12 month period of the warranty.
  • The manufacturers’ efforts to fix the vehicle fail. Under the law, they must either replace your car or buy it back. You get to decide between a comparable new car and a refund.

It is a good idea to read your warranty to find out what kind of remedies your manufacturer might offer outside of the Lemon Law.

Your Rights under the Lemon Law

If the manufacturer hasn’t fixed your car after a reasonable number of attempts, you are entitled to choose a comparable new replacement vehicle, or a refund. The law does not spell out what a comparable new replacement vehicle is, though it would most likely be an identical make and model.

If your car is a lemon, you are entitled to a refund of:

  • The full contract price including, but not limited to, charges for undercoating, dealer-preparation and installed options, plus the non-refundable portions of extended warranties and service contracts.
  • All upfront charges, including but not limited to, sales tax, license and registration fees.
  • All finance charges you incurred after you first reported the problem to the manufacturer, or authorized dealer.
  • Any incidental damages, less a reasonable allowance for your use of the vehicle.

Under the law, the refund is reduced by a “reasonable allowance” for your use of the vehicle. The following formula is used to calculate the refund:

Amount to be Refunded =  Purchase Price  –  (Number of miles driven by the consumer /120,000) x Purchase Price)

What About Disputes?

Many auto manufacturers have dispute resolution programs for customers with warranty problems. Some require you to use these programs before you go to court. Read your warranty for more information. You may also wish to see if the BBB Auto Line can help, or consider seeking advice from a private attorney.

We Can Help

If you have a complaint about new car warranties contact us for help or call toll free within North Carolina at 1-877-5-NO-SCAM