New Car Lemon Laws

New Car Lemon Laws (Magnuson Moss Warranty Act)

”Lemon” is commonly used in the 1800s as a term to describe people that are unfriendly.In American styled English,it is understood as a slang which means ”worthless materials”.

This has slowly evolved and has integrated as a term to describe to refer to a motor vehicle or car that is defective or consistently problematic.The Market for Lemons made famous by Nobel Prized economist George Akeloff used it as a case study to state the information asymmetry between car sellers and car buyers.

As sellers of new cars tend to have superior knowledge  and may tend to use it to their advantages in new car deals,the New Car Lemon Laws acts as an insurance to new car buyers from losing out in shady deals from getting defective or bad quality and performance new cars.

It basically acts as a legal procedure to resolve disputes between the new car sellers and new car buyers and defers in names,laws and acts according to the different states in United States to suit the local community.

The New Car Lemon Laws thus require the new car sellers (dealer or manufacturer) to disclose in repaired or repairable damages thru writing which is equal or exceeds $500 or 3% of the new car sellers stated retail price.This is thus integrated prior to the sales contract and would required the buyer’s approval thru acknowledgment that he/she is aware of the damages in the form of a signature.

Thus,if the seller fail to comply with the New Car Lemon Laws,the buyer will therefore be given the right to claim for a refund of the purchased priced of the defective car.

However,there is also the protection towards the new car sellers and a notice to the buyers with rules stated in the law saying that they are liable to refund only if the new car is either purchased within the first 24,000 miles or two years from the deal date.

With this assurance,new car buyers who have experienced disadvantages or scam when they buy a new car will have the benefit of getting either a replacements or refunds if the defective car is not repaired or serviced to its optimal condition