Will it be refund or replacement for a ‘lemon’ car? Owners to know soon

MANILA—The Department of Trade and Industry plans to publish by November the implementing rules and regulations of the Philippine Lemon Law, which seeks to protect consumers from business and trade malpractices related to the sale of motor vehicles.

“In preparation for the implementation of the said law, the DTI [is preparing] for the drafting of the IRR with its Consumer Protection and Advocacy Bureau at the forefront of this task,” the agency said in a statement.

“The CPAB is currently in the process of forming the technical working group for the drafting of the IRR which will be composed of the Department of Transportation and Communications and other relevant government agencies, and members from the private and consumer sectors to effectively implement the provisions of the Lemon Law,” it added.

Republic Act No. 10642 or the Philippine Lemon Law was signed by President Aquino last July 15 and will take effect by August 7 this year.

Under the Philippine Lemon Law, consumers who purchase a brand new car and experience defects in the course of one year may demand either a refund or replacement if after four repair attempts by the manufacturer, distributor, authorized dealer or retailer, the defects remain unresolved.

“Consumers are now appeased that their rights and welfare in the sale of motor vehicles will be protected against business and trade malpractices, and that redress is readily available for them at the DTI,” said Trade Undersecretary Victorio Mario A. Dimagiba.

The DTI will be the sole implementing agency of RA 10642, which means that it will be responsible for providing remedies in disputes related to the availment of rights provided for under the Lemon Law.

Prior to the Lemon Law, the DTI had been implementing the Alternative Dispute Resolution (ADR) system in addressing consumer complaints. This system will still be used by the agency under the newly enacted law.

“Even prior to the enactment of the Philippine Lemon Law, the DTI has already resolved certain cases related to motor vehicles not conforming to the standards and specifications of its manufacturer or distributor. Therefore, the Department is very much able and ready to provide what is expected from us with regards to consumer redress and the implementation of RA 10624,” Dimagiba said.

To assist businesses and consumers in understanding the Philippine Lemon Law, the DTI will soon be issuing a fact sheet containing the salient points of the law within the week.

source: business.inquirer.net

What is the lemon law?

A lemon law is a statute that obliges the manufacturer of the new vehicle that has a non-conformity (a persistent condition or fault that can cause the decrease in its value, use or safety) to provide a refund or a new replacement. Each state has its own lemon law and lemon laws in America can vary.

The father of lemon law statutes is the Magnuson-Moss Act. Enacted in 1975, it has become a landmark publication. It was aimed at promoting consumer rights to protect buyers against acquiring continually defective vehicles. It is an effective tool to counter deceptive warranty practices. It is applicable to goods with a price tag of over $25 bought after 4 July 1975 (the date the legislation came into force) with a major emphasis on automobiles.

The Act is centered on the express warranty that the manufacturer supplies the customer with. It facilitates bringing in warranty suits as it envisages the award of the attorney's fees. What is an express warrant? It is an oral or written confirmation by the manufacturer to remedy any defects or replace the vehicle if he fails to meet the specifications set forth within a stated period time, which is often referred to as a warranty period.

The Magnuson-Moss Act is to be applied to express written warranties. It can be useful if the manufacturer refuses to repair, refund or otherwise remedy the vehicle. Then the customer is to take the case to the arbitration court and to prove:

* the warranty is in place * it has been breached * the vehicle has developed a defect, * which was caused by the breach of warranty

The Federal Magnuson-Moss Warranty Act served as a basis for state lemon laws. The definitions of an express warranty and period differ from state to state too. Generally, the mileage under warranty makes 12,000-18,000 miles, while the warranty period ranges from 12 to 24 months.

Apart from the above-mentioned laws, there is the Uniform Commercial Code (UCC), which grants the customer the right for a refund or replacement of the vehicle that the manufacturer claimed to be defect-free. The UCC and Magnuson-Moss Act function in concert.

As for the "who's going to cover attorney's fees" question, about half of the states give you a chance to reimburse the attorney costs. If you bring in a suit under the Magnuson-Moss Act, in most states the manufacturer will repay you the attorney costs if you win the case. In some states, you will have to pay the manufacturer attorney's fees, if you lose it.

As for the used and leased cars, it again depends on the state. Some includes these vehicles into the law, other have separate laws for them.

To prove that you have a lemon maker, you have to present the documentation, which clearly shows that you have taken your car to the repairs for "a reasonable amount of times" and it hasn't been fixed. There should be dates, names of the dealer/manufacturer, a kind of defect and the entries made for the same defect should be identical. It can be a real fuss, and time and effort consumed to take an action to court. So try finding out as much about the vehicle you are going to buy as possible before you tear off a check.

This article submitted by Mike Daniels, auto-journalist. Futher information is available here - Lemon Cars

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