Missouri’s Lemon Law: Protecting Drivers From Sour Warranty Deals

What is the purpose of Missouri’s Lemon Law and who does it protect?

The Missouri New Vehicles Warranty Law, more commonly known as the “Lemon Law,” protects buyers of new vehicles by enforcing the manufacturer’s express warranty. Missouri’s Lemon Law does not apply to used cars, motorcycles, mo-peds, and off-road vehicles. Rather, the law covers all new vehicles sold or leased with warranty provisions.

Consumers who are protected under Missouri’s Lemon Law include: (1) the purchaser of a new motor vehicle primarily used for personal or household purposes; (2) any person to whom the new motor vehicle is transferred for the same purposes during the duration of an express warranty applicable to the new motor vehicle; and (3) any other person entitled by the terms of the warranty to enforce its obligations. For more information, click here.

I am covered by Missouri’s Lemon Law and my new vehicle has a defect. What is my next step?

Report it to the manufacturer as soon as possible! Under Missouri’s Lemon Law, owners of new vehicles are responsible for reporting problems or defects in writing to the manufacturer. Following the complaint, the manufacturer must be given a “reasonable” number of attempts to correct the problem. Missouri’s Lemon Law states this requirement is met if (1) the vehicle has been in the repair shop for the same problem four or more times and the problem still exists, or (2) the vehicle has been out of service because of a problem covered by warranty for 30 or more working days since the delivery of the vehicle.

I’ve reported the defect, but the manufacturer is unable to fix my car. How will I be reimbursed?

If the reported problem cannot be fixed in a reasonable number of repair attempts the manufacturer has the option to either offer the consumer a cash refund or a vehicle of comparable value. Under the Lemon Law in Missouri, manufacturers are permitted to deduct a “reasonable allowance for the consumer’s use of the vehicle” from the refund. Missouri law also requires that a replacement vehicle must be acceptable to the consumer. Additionally, Missouri law provides that the warranty of a new vehicle with reported problems may be extended if the manufacturer has not repaired the new vehicle by the expiration of the applicable time period. For additional information, click here.

After several attempts to fix my vehicle’s defect, the manufacturer and I disagree about whether my car conforms to warranty and whether I should receive a refund. What options do I have to resolve this dispute?

If the manufacturer provides a reasonable number of attempts and indicates that it doesn’t believe the consumer is owed a refund, but the consumer still believes the vehicle does not conform to warranty, the consumer must submit a complaint to the manufacturer. Most auto manufacturers in Missouri have appeals procedures, often with arbitration boards, to resolve problems consumers have with the manufacturer or car dealership. Throughout the dispute procedure, the manufacturer is permitted to make a settlement offer, which the consumer may accept or reject. If a consumer resorts to an informal dispute settlement procedure, an action must be commenced within 90 days following the procedure’s final action.

If the consumer rejects the settlement offer, he may commence a court action against the manufacturer or dealer (1) within the earlier of six months following expiration of the express warranty, or (2) 18 months following the date of the vehicle’s original delivery to the consumer. The consumer is allowed to recover a sum equal to the aggregate amount of costs and expenses incurred, including attorney’s fees, if he prevails.

On the other hand, if the court determines that the claim was filed in bad faith or solely for the purpose of harassment, then the consumer will be liable for all costs and reasonable attorney’s fees incurred by the manufacturer. Missouri’s Lemon Law allows several affirmative defenses for the dealers and manufacturers of new vehicles including: (1) an alleged nonconformity does not substantially impair the use, market value, or safety of a motor vehicle; (2) a nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of a motor vehicle; (3) a claim by a consumer was not made in good faith; and (4) any other affirmative defense allowed by law.

Consumer Tips Regarding Missouri’s Lemon Law:

  1. If you suspect your new vehicle has a defect, report it to the manufacturer as soon as possible!
  2. If a defect in your new car has been “fixed” but you believe problems still exist, do not hesitate to report the defect to the car’s manufacturer again.
  3. Do not settle for less than what you are guaranteed in your warranty! There are appeals processes if you and the car manufacturer disagree about a defect. Know your rights as the owner of a new vehicle!

Credit Repair Series (3 of 3): Credit Repair Agencies

In Part 2 of our series, we covered how to identify and correct inaccurate information on credit reports. In Part 3, we will discuss the businesses that offer these services professionally: credit repair agencies.

Overview and Concerns
A “credit services organization” (or agency) is defined under Colorado law as, “any person, including a nonprofit organization exempt from taxation under section 501 (c) (3) of the federal “Internal Revenue Code of 1986″, who, with respect to the extension of credit by others, represents that such person can or will, in return for the payment of money or other valuable consideration by the buyer, improve or attempt to improve a buyer’s credit record, history, or rating.” CRS § 12-14.5-103(2). It should be noted that attorneys acting in their normal capacity are excepted from this definition.

Not only has the State of Colorado taken the time to define this occupation legally, but an entire series of laws (known as the Colorado Credit Services Organization Act, CRS § 12-14.5-101, et seq.) has been written with an eye to protect consumers. The state legislature has summarized their concerns, “[c]ertain advertising and business practices of some credit services organizations have worked a financial hardship upon the people of this state, often those who are of limited economic means and inexperienced in credit matters. Credit services organizations have significant impact upon the economy and well-being of this state and its people.” CRS § 12-14.5-102(1)(b).

The savvy consumer should be aware that bad actors are present within the field of credit repair. At a minimum, remember that nobody can promise results. Other things to look out for include: payment up-front, offers such as “guarantee plans,” agencies that sell advice, etc. Most of the time when a credit report contains an inaccuracy, a savvy consumer will be able to address the issue themselves, provided they are willing to see the process through to its end.

Complex Matters
This series has been aimed at educating consumers on how to obtain their credit report and how to challenge inaccurate credit report information. A great deal of the time, a credit repair agency will not be able to offer you anything you cannot get for yourself. That said, every credit situation is different, and complex issues can arise regarding liens, taxes, and collection actions. If the credit repair task ahead of you is complex, credit repair agencies do have the benefit of repetition, and a reputable agency is one possible way to resolve complex issues.

Selecting a credit repair agency, should you decide you need one, is beyond the scope of this series. However, at minimum, savvy consumers should use the usual due diligence before selecting anyone to help them with any financial issue. A partial list of research tools appears below:

Google

(you can search business reviews in the Google Local section of your Google+ account)

Better Business Bureau

Do your homework before contacting an agency: the last thing your credit horror story needs is a sequel. In the end, remember that when it comes to credit repair you will always be your primary advocate. Stay credit vigilant, and good luck.