Lemon Law Glossary

This glossary explains the words you'll see in lemon law statutes, warranty booklets and manufacturer letters. Where a federal or state law defines a term, the entry quotes it and gives the section. Lemon laws are state laws, so a state example shows one way a term is defined, not the rule in every state. For your state's exact wording, open your state's lemon law page. For short answers to common questions, see the lemon law FAQ.

A

Affirmative defense

A reason the manufacturer can raise to defeat a claim even if a defect exists. Florida's list is typical: the defect doesn't substantially impair use, value or safety, it resulted from an accident, abuse, neglect or unauthorized changes, or the claim wasn't filed in good faith (Fla. Stat. §681.104(4)). Washington has a similar list (RCW 19.118.090(5)).

Arbitration

A process outside court where a neutral arbitrator or panel hears the dispute and issues a decision. In lemon law, it may be run by a manufacturer-sponsored program or by a state. Whether the decision binds you depends on the program; see arbitration and dispute programs.

"As is"

A used-car sale with no dealer warranty. The FTC says "As Is - No Dealer Warranty" means the dealer won't pay for any problems or needed repairs. A dealer that gives a written warranty, or sells a service contract within 90 days of the sale, can't disclaim implied warranties (15 U.S.C. §2308(a)).

B

BBB AUTO LINE

A vehicle warranty and lemon law dispute program run by BBB National Programs, offering mediation and arbitration. The program says it "does not charge any fee to vehicle owners." Only participating manufacturers use it, and some take part only in some states.

Buyback

The everyday word for a repurchase, where the manufacturer takes the vehicle back and refunds the price, usually less a use allowance. Florida, for example, requires a refund of "the full purchase price" less a reasonable offset for use, plus collateral and incidental charges (Fla. Stat. §681.104(2)(a)). See buyback and replacement.

Buyers Guide

The FTC window sticker every dealer must post on a used vehicle offered for sale, showing whether it's sold "as is," with implied warranties only or with a warranty (16 CFR §455.2). The final Guide is part of the sales contract and "overrides any contrary provisions in the contract of sale" (16 CFR §455.3(b)).

C

Certified pre-owned (CPO)

A used vehicle sold under a manufacturer or dealer program, usually after an inspection and with some added coverage. The coverage may be a manufacturer warranty, a dealer warranty or a service contract, so read the document to see who stands behind it. See lemon law for used cars.

Collateral charges

Extra costs that come with buying the vehicle, which some states add to a refund. Florida defines them as charges "wholly incurred as a result of the acquisition of the motor vehicle," including installed items, earned finance charges, sales taxes and title charges (Fla. Stat. §681.102).

Consequential damages

Losses that flow from a defect beyond the cost of the repair itself. Under a full warranty, the warrantor may not exclude or limit consequential damages unless the exclusion "conspicuously appears on the face of the warranty" (15 U.S.C. §2304(a)(3)).

Consumer

The person a warranty or lemon law protects. Under Magnuson-Moss, it includes the buyer, "any person to whom such product is transferred during the duration of an implied or written warranty," and anyone else entitled to enforce the warranty (15 U.S.C. §2301(3)). Many state lemon laws also include lessees.

D

Days out of service

The total number of days a vehicle is in the shop for warranty repairs. Many lemon laws presume a reasonable number of repair attempts once that total reaches a set figure. Florida uses "a cumulative total of 30 or more days," or 60 for a recreational vehicle, not counting routine maintenance (Fla. Stat. §681.104(3)(b)).

E

Express warranty

A warranty stated in words, such as the manufacturer's new-vehicle warranty booklet. Federal law calls a written one a "written warranty" (15 U.S.C. §2301(6)). Massachusetts requires dealers to give an express written warranty on many used cars (G.L. c. 90, §7N¼).

F

Fee-shifting

A rule that lets a winning party recover attorney's fees from the other side. Under Magnuson-Moss, a consumer who "finally prevails" may be allowed fees and costs, at the court's discretion (15 U.S.C. §2310(d)(2)). See attorney's fees and costs.

Final repair attempt

A last chance some states give the manufacturer itself to fix the defect after written notice. In Florida, after three repair attempts the consumer must notify the manufacturer by registered or express mail, and the manufacturer then gets a final attempt to cure (Fla. Stat. §681.104(1)(a)). See notice to the manufacturer.

Full warranty

A written warranty that meets the federal minimum standards in 15 U.S.C. §2304. A full warranty must fix defects within a reasonable time without charge and must let you choose a refund or replacement if the defect remains after a reasonable number of attempts (§2304(a)(1), (4)).

I

Implied warranty of fitness for a particular purpose

A promise the law reads into a sale when you rely on the seller's advice that a product suits a specific use. The FTC says it applies when you buy a car based on the dealer's advice that it's suitable for a particular use.

Implied warranty of merchantability

The basic promise, created by state law, that a product sold by a merchant will do what it's supposed to do. For a car, the FTC puts it this way: "it will run." It generally applies only when the seller is a merchant who deals in such goods.

Incidental damages

Reasonable out-of-pocket costs caused by the defect, such as towing or a rental car. Florida calls them "incidental charges," meaning "reasonable costs to the consumer which are directly caused by the nonconformity" (Fla. Stat. §681.102). Under a full warranty, federal law lets you recover reasonable incidental expenses caused by a repair delay (15 U.S.C. §2304(d)).

Informal dispute settlement mechanism

The federal name for a manufacturer's dispute program. If it follows FTC rules, it can't charge you, must decide most disputes within 40 days and its decisions "shall not be legally binding on any person" (16 CFR §§703.3(a), 703.5(d), 703.5(j)). A warranty can require you to use it before suing under Magnuson-Moss (15 U.S.C. §2310(a)(3)).

L

Lemon

The everyday word for a vehicle with a warranty defect that the manufacturer can't fix after a reasonable number of attempts. Whether a vehicle legally qualifies depends on your state's lemon law. See does my vehicle qualify.

Lemon law

A state law that gives a remedy, usually a refund or replacement, when a new vehicle (and sometimes a leased or used one) has a warranty defect that can't be fixed after a fair chance. Every state's version differs; see the state lemon law pages.

Lemon law rights period

The window during which defects must be reported for a vehicle to qualify, also called the protection period. Florida defines it as "the period ending 24 months after the date of the original delivery of a motor vehicle to a consumer" (Fla. Stat. §681.102). Other states use different periods. See deadlines.

Lessee

The person who leases and drives the vehicle. Massachusetts defines a lessee as someone who gets possession and use of a vehicle under a lease "for a term of not less than one year" (G.L. c. 90, §7N½). See leased vehicles.

Lessor

The company that owns a leased vehicle. Florida defines a lessor as a person who "holds title to a motor vehicle that is leased to a lessee under a written lease agreement" or holds the lessor's rights under it (Fla. Stat. §681.102). In a lease buyback, part of the refund usually goes to the lessor.

Limited warranty

Any written warranty that doesn't meet the federal minimum standards for a full warranty. Federal law requires it to be "conspicuously designated a 'limited warranty'" (15 U.S.C. §2303(a)(2)). A limited warranty may shorten implied warranties to its own length if the limit is reasonable and clearly shown (§2308(b)).

M

Magnuson-Moss Warranty Act

The federal law on consumer product warranties, at 15 U.S.C. §§2301-2312. It sets rules for written warranties, limits disclaimers of implied warranties and lets consumers sue for breach (§2310(d)). See our Magnuson-Moss guide.

Mediation

A step where a neutral person helps the owner and manufacturer try to reach a settlement, without deciding the case. BBB AUTO LINE offers both mediation and arbitration. If mediation fails, the dispute can move to a decision.

N

Nonconformity

A defect that the warranty covers and that matters enough to count under the lemon law. Florida defines it as "a defect or condition that substantially impairs the use, value, or safety of a motor vehicle," excluding problems caused by accident, abuse, neglect or outside modifications (Fla. Stat. §681.102).

Notice to manufacturer

Written notice to the manufacturer, often required before you can claim a lemon law remedy. Rules on timing, method and content vary by state. Federal law separately requires giving the warrantor "a reasonable opportunity to cure" before most Magnuson-Moss suits (15 U.S.C. §2310(e)). See notice to the manufacturer.

O

Opportunity to cure

The chance the warrantor must get to fix the problem before most warranty lawsuits go forward. Magnuson-Moss requires that the person obligated under the warranty be "afforded a reasonable opportunity to cure such failure to comply" (15 U.S.C. §2310(e)).

P

Presumption

A legal starting point that a reasonable number of repair attempts has happened once specific facts are shown, such as a set number of repairs or days out of service. Florida's version is in Fla. Stat. §681.104(3). The manufacturer may still contest the claim, for example with an affirmative defense (§681.104(4)). See repair attempts.

R

Reacquired vehicle

A vehicle a manufacturer took back from an owner, through a lemon law buyback or settlement. Many states limit how it can be resold. Florida bars knowingly selling, leasing or transferring title to a returned vehicle unless the defect is "clearly and conspicuously disclosed" and the manufacturer warrants to correct it for 1 year or 12,000 miles (Fla. Stat. §681.114(2)).

Reasonable allowance for use

A deduction from a lemon law refund for the miles the owner drove, also called a use offset. Massachusetts, for most new vehicles, multiplies the contract price by the miles driven before the manufacturer accepts the return, over 100,000 (G.L. c. 90, §7N½). Florida divides by 120,000, or 60,000 for a recreational vehicle (Fla. Stat. §681.102).

Reasonable number of attempts

The standard for how many tries a manufacturer gets to fix a defect before a remedy is due. Federal law uses the phrase for full warranties without setting a number (15 U.S.C. §2304(a)(4)). Many states presume it after a set number of repairs or days in the shop. See repair attempts.

Recall

A federal safety process for vehicles with a safety defect or noncompliance. When notification is required, the manufacturer must remedy the defect "without charge" by repair, replacement or refund less depreciation (49 U.S.C. §30120(a)). A recall is separate from a lemon law claim; see lemon law vs recall.

Refund

Under Magnuson-Moss, "refunding the actual purchase price (less reasonable depreciation based on actual use where permitted by rules of the Commission)" (15 U.S.C. §2301(12)). State lemon laws define what a refund includes in their own terms.

Repair order

The document a dealer's service department writes for each visit, showing the date, mileage, your complaint and the work done. It's usually the main evidence of repair attempts and days out of service. See how to document repair visits.

Replacement vehicle

A new vehicle the manufacturer provides instead of a refund. Magnuson-Moss defines replacement as "furnishing a new consumer product which is identical or reasonably equivalent to the warranted consumer product" (15 U.S.C. §2301(11)). Florida and Massachusetts let the consumer choose a refund over a replacement (Fla. Stat. §681.104(2)(a); G.L. c. 90, §7N½).

S

Service contract

A contract, often called an "extended warranty," to perform repairs or maintenance for a set period, usually bought separately. Federal law defines it as "a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair" of a product (15 U.S.C. §2301(8)). The FTC says it "is not a warranty as defined by federal law."

Substantial impairment

The test that separates a lemon law defect from a minor annoyance. Many states ask whether the defect substantially impairs the vehicle's use, value or safety, as in Florida's definition of nonconformity (Fla. Stat. §681.102). A manufacturer can argue the defect doesn't meet this test as a defense (§681.104(4)(a)).

T

Title branding

A notation on a vehicle's title, or a required disclosure, that tells later buyers the vehicle was returned under a lemon law. States handle this in different ways. Florida and Massachusetts, for example, require clear written disclosure before resale (Fla. Stat. §681.114(2); G.L. c. 90, §7N½).

Trial de novo

A new trial in court, starting fresh rather than reviewing the earlier decision for errors. Florida and Washington let a party take a state lemon law arbitration decision to court this way (Fla. Stat. §681.1095(12); RCW 19.118.100(1)).

W

Warrantor

The company responsible under a warranty. Federal law defines it as "any supplier or other person who gives or offers to give a written warranty or who is or may be obligated under an implied warranty" (15 U.S.C. §2301(5)). Only the warrantor that made a written warranty can be held to it (§2310(f)).

Written warranty

Under Magnuson-Moss, a written promise that a product is defect free or will meet a set level of performance for a set time, or a written promise to repair, replace or refund if it doesn't, that becomes part of the basis of the bargain (15 U.S.C. §2301(6)). The new-vehicle warranty booklet is the usual example.