Texas Lemon Law

How does the Lemon Law work?

The Texas Lemon Law is a state law administered by the Texas Department of Motor Vehicles that helps consumers who buy or lease new motor vehicles and have repeated problems getting their vehicles properly repaired under the manufacturer’s original warranty. The Lemon Law can help a consumer get the vehicle repurchased, replaced or repaired. It can be less complicated and less expensive than going to court.

What does it cover?

New vehicles, including cars, trucks, vans, motorcycles, all-terrain vehicles, motor homes, towable recreational vehicles (TRVs), and neighborhood electric vehicles that develop a defect(s) covered by a manufacturer’s written warranty. Demonstrator vehicles that have not been previously titled are considered new vehicles.

The law does not cover repossessed vehicles, non-travel trailers, boats, or farm equipment. Nor does it cover defects that do not substantially impair the use or market value of the vehicle such as minor rattles, radio static, etc.

Are used motor vehicles covered?

Your used vehicle may be covered under current state laws. Texas law related to warranty performance may cover your used vehicle if it is still covered by the manufacturer’s original warranty (not an extended service contract), or if the defect started and was reported to the dealer while under the manufacturer’s original warranty and the defect continues to exist, repair assistance for that problem may be available to you.

How do I know if my vehicle is a Lemon?

The vehicle must meet all of the following conditions:

1. It has a substantial manufacturing defect
2. The defect is covered by a manufacturer’s written warranty
3. The owner reports the defect to the dealer or manufacturer within the warranty term
4. The owner gives the dealer a reasonable number of attempts to repair the defect or condition
5. The owner gives the manufacturer written notice (preferably by certified mail) of the defect and at least one opportunity to cure the defect; (Sample letter)
6. The defect persists and substantially impairs the vehicle’s use or market value, or creates a serious safety hazard.

How many chances does the dealer get to fix the problem?

The law presumes you have given the manufacturer or authorized dealer a reasonable number of attempts to fix the defect if you pass one of the tests listed below. Determining if the dealer has had a reasonable number of repairs is easy. Simply see if you pass the four-times test, the serious safety-hazard test, or the 30-day test. The mileage requirements generally do not apply to TRVs or other vehicles that do not have an odometer.

Four-times test

You pass the four-times test if you have taken the vehicle to a dealership for repairs:

• Four times for the same defect within the first 24 months or 24,000 miles, whichever comes first, and the defect is still not repaired.

Serious safety-hazard test

A serious safety hazard is a life-threatening malfunction that substantially impedes your ability to control or operate the vehicle normally or that creates a substantial risk of fire/explosion.

You pass the serious safety-hazard test if you have taken the vehicle for repair of a serious safety-hazard:

• Twice during the first 24 months or 24,000 miles, whichever comes first, and the defect is still not repaired.

30-day test

You pass the 30-day test if your vehicle has been out of service for repair because of a defect covered by the original factory warranty:

• For a total of 30 days or more - not necessarily all at one time - during the first 24 months or 24,000 miles (if a comparable loaner vehicle was provided while the vehicle was being repaired, that time does not count toward the 30 days) a substantial defect still exists.

How long do I have to file a Lemon Law complaint?

A Lemon Law complaint must be filed within six (6) months following the earlier of:

1. Expiration of the express warranty term;
2. 24 months after purchase; or
3. 24,000 miles following the date of delivery of the vehicle (except TRVs).

The filing period is determined by which of the above events comes first. To be safe, the complaint should be filed as soon as the consumer realizes the dealer is having problems repairing the vehicle.

What happens if I win?

The law provides basic guidelines for what type of relief you may get if you prove your case. Every situation is different. The department reviews the facts of each particular case when making a decision.

If you win your case, the department can order one of the following (Please Note: only new vehicles can qualify for a refund or replacement):

Refund

The manufacturer must buy back the vehicle for the purchase price (including taxes, title and license fee) minus an amount charged for vehicle use. The amount deducted is decided according to a formula, (see spreadsheet links below) that takes into account the number of miles on the vehicle at the time of the hearing and other factors. This does not include any interest paid on the vehicle.

• Lease Repurchase Calculations
• Lemon Law Repurchase Calculations
• Towable Recreational Vehicle Repurchase Calculations

Replacement

The manufacturer must replace the defective vehicle with one that is comparable to the original vehicle (usually same make, model and accessories) and acceptable to the consumer, minus the mileage used. The consumer is responsible for any vehicle upgrades.

Repair

The manufacturer must fix the vehicle’s defects. Out-of-pocket expenses for repairs that should have been covered by the warranty may also be reimbursed.