A new car is supposed to offer reliability, safety, and peace of mind. Yet even brand-new vehicles can come with serious problems from the start.
According to Nolo, an estimated 1% of new vehicles are “lemons”, meaning they’re defective. It represents around 150,000 new cars sold every year. It’s frustrating, but it’s also potentially fatal.
The National Motor Vehicle Crash Causation Survey estimates that up to 59,100 crashes involve defects each year. Thankfully, all 50 states have so-called “lemon laws” on the books to protect and compensate consumers. In this guide, we discuss how the Texas lemon law works.
Key Takeaways
- The Texas lemon law is a state law to protect consumers who buy new vehicles with defects.
- Most vehicles are covered under lemon laws, including passenger vehicles, trucks, motorcycles, and towable recreational vehicles.
- The Texas Department of Motor Vehicles is responsible for processing claims and enforcing decisions under the state’s lemon laws.
- Successful lemon law claims require defects to be substantial and impact a vehicle’s safety, use, or market value, meaning not every defect will qualify under the law. Additionally, manufacturers must be given a reasonable number of attempts to repair the defect.
- Used vehicles may be covered under the lemon law, but only if the defect was reported while the vehicle was still under the original manufacturer’s warranty.
- Options for remedies when your car is proven to be a lemon include free repairs, a fair replacement of the vehicle, or a refund.
- Pursuing these claims can be complicated. The best way to handle lemon law claims is to hire an attorney to manage the process and ensure your legal consumer rights are protected.
What Is the Texas Lemon Law and How Does It Work?
The Texas lemon law can be found in the Texas Occupations Code Section 2301.601. It’s designed to protect consumers who purchase vehicles with pre-existing defects, ensuring that they’re not left out of pocket.
Since 1993, approximately 21,659 lemon law cases have been filed, representing over $121 million returned to consumers in repair and replacement value, per stats from the Texas Department of Motor Vehicles.
What is the Lemon Law?
Texas’s lemon law protects consumers who buy or lease defective new vehicles. It’s a state law administered and enforced by the Texas Department of Motor Vehicles, facilitating the repurchase, repair, and replacement of vehicles that meet the necessary criteria.
The law applies to any new vehicles that are purchased or leased, including cars, motorcycles, trucks, and even some recreational vehicles.
Over the years, lemon law cases have been growing in number nationwide. For example, in Los Angeles County, almost 10% of civil filings are lemon cases, per a report from CalMatters. It’s evidence of the public’s growing awareness of these laws and their right to seek recompense when they’ve got a lemon vehicle on their hands.
The History and Purpose of the Texas Lemon Law
Calling a vehicle a “lemon” is something that goes back to the early 20th century to denote a defective vehicle. The Magnuson-Moss Warranty Act was enacted by the federal government in 1975 to increase warranty protections for consumers who were sick of dealing with manufacturer defects.
Texas introduced its lemon law in 1983, with enforcement starting in 1985, to make claims more accessible and cost-effective. Since then, the law has been amended several times to expand coverage and make it easier to lodge complaints.
Who Qualifies for a Texas Lemon Law Claim?
Texas’s lemon laws outline strict criteria for who can file these claims, what types of vehicles are covered, and the conditions the plaintiff has to prove to show that their vehicle meets the definition of a lemon.
Understanding these criteria and ensuring your vehicle meets them is vital for making a successful claim.
Who Can File a Lemon Law Claim in Texas?
Ordinary Texas residents who buy, lease, or register a vehicle in the Lone Star State may file a claim. Still, other parties are also eligible, including retail purchasers, active military personnel, and owners who have transferred ownership and then registered it in Texas.
The law applies chiefly to new vehicles, but there are some cases where used vehicles may also qualify, such as if they’re still under the original warranty. It’s important to remember because the Consumer Federation of America estimates that at least one in six used vehicles has at least one defect.
What Types of Vehicles Are Covered?
Most vehicles are covered under Texas lemon laws. These include passenger vehicles, motorcycles, motor homes, neighborhood electric vehicles, All-Terrain Vehicles (ATVs), towable recreational vehicles, and even demonstrator vehicles.
But what vehicles aren’t covered? Generally, here are the vehicles that aren’t protected:
- Used vehicles (in most circumstances)
- Repossessed vehicles
- Non-travel trailers
- Boats
- Farm equipment
Conditions Required for a Vehicle to Be Considered a Lemon
The Texas lemon criteria leave little room for doubt as to whether a vehicle is considered a lemon. Drivers must demonstrate that their vehicles have substantial defects, are covered by an active manufacturer’s warranty, and that reasonable repair attempts have been made.
In detail, here’s what qualifies as a lemon car in Texas:
- A defect substantially impedes use, safety, or market value.
- A manufacturer’s written warranty must still be active.
- The consumer must report the defect to the manufacturer or dealer while the warranty is still active.
- All dealers and manufacturers must be given a reasonable number of attempts to ensure consumers get their vehicles properly repaired.
- Drivers must give the manufacturer or dealer written notice of the defect and an opportunity to fix it.
- The defect remains unresolved after the manufacturer or dealer has had a reasonable number of repair attempts.
In short, you can’t just come across a defect and then file a lemon law claim. It’s a defined process that gives manufacturers and dealers fair warning and an attempt to solve the problem.
Identifying a Lemon Vehicle
Knowing what to look for in a vehicle is crucial for reporting defects in time. However, it’s also a matter of safety, as severe defects could increase your chances of getting into a serious car accident.
According to the National Highway Traffic Safety Administration (NHTSA), over 390 million vehicles have been recalled due to safety concerns since 1966. But even when general recalls aren’t required, individual cars may have defects, and it’s up to drivers to spot the red flags.
Signs Your Vehicle May Be a Lemon
Texas law mentions serious defects and abnormalities without going into further detail. Generally, legal precedent and common sense indicate that defects like persistent mechanical issues, safety concerns, and multiple unrelated defects would qualify under the law as a lemon vehicle.
Here are the signs to look for:
- Persistent Problems – Transmission failures, electrical malfunctions, and engine stalling.
- Safety Issues – Steering problems, faulty brakes, and malfunctioning airbags.
- Multiple Unrelated Defects – On the other hand, you may have a collection of unrelated defects. Together, they diminish the value and reliability of the vehicle, which would mean the motor vehicle qualifies as a lemon.
Additionally, your vehicle counts as a lemon simply because it’s constantly out of service for repairs. This means 30 or more days within the first two years, cumulatively or in the first 24,000 miles after purchase.
Reasonable Repair Attempts: What Counts?
The concept of “reasonable number of repair attempts” referenced in the Texas statutes isn’t an undefined idea. Experienced personal injury lawyers use three tests, as outlined by the Texas Department of Transportation:
- Four-Times Test – The same defect has received four repair attempts within the first 24,000 miles or 24 months, and it still presents repeated problems.
- Serious Safety-Hazard Test – Any defects that could be classified as life-threatening malfunctions, like defective brakes, have been repaired twice within the first 24,000 miles or 24 months, and it still hasn’t been resolved.
- 30-Day Test – Your vehicle has been out of action due to repairs for 30 days or more within the first 24,000 miles or 24 months. Note that this is cumulative, not consecutive.
Meeting just one of these thresholds is enough for your car to be classified as a lemon in Texas and eligible for a lemon law claim.
The Lemon Law Process in Texas
Filing a lemon law claim means following the defined process from start to finish. The Texas DMV is responsible for facilitating and establishing the process. Miss out on any step and you risk compromising your claim.
So, how do you go about making a claim?
Steps to Take if You Suspect You Have a Lemon
- Review Your Warranty/Owner's Manual – Start by understanding what your original vehicle warranty covers and the processes the manufacturer has outlined if you’ve detected a defect. It’s not necessarily the same for every manufacturer.
- Document the Issues – Gather and organize everything related to your vehicle’s issues, including repair attempts and dealer/manufacturer communications.
- Provide Written Notice – Send a letter by certified mail to the manufacturer or dealer's service department about the defect and give them an opportunity to repair the vehicle. There are templates online for what a written notice looks like.
- File a Formal Complaint – Submit a formal complaint to the Texas Department of Motor Vehicles. Note that this must be done within six months of your express warranty term expiring, 24 months after buying the vehicle, or 24,000 miles after the vehicle was delivered. The earlier of the dates applies.
Filing a Lemon Law Complaint: A Step-by-Step Guide
After you’ve followed the initial steps to notify the manufacturer or dealer that there’s a defect, you must then give them the chance to solve the issue. If your vehicle defect hasn’t been repaired, you can move to filing a lemon law complaint and begin negotiating the process of getting compensation.
So, what does this look like?
- File a complaint with the Motor Vehicle Dealer Online Complaint System, which is the service provided by the Texas Department of Motor Vehicles.
- Fill out the form, including all relevant details about your vehicle, its defects, and attempted repairs. These claims must be supported by formal documentation, such as repair orders, technical service bulletins, and email communications. It costs $35 to file this form.
- Wait for your complaint to be reviewed.
- You may be required to participate in mediation between you and the manufacturer, but this isn’t a given.
- If mediation fails, your case will proceed to a formal hearing. An administrative law judge oversees these hearings.
You’ll receive a final decision from the hearing examiner in writing within 60 days or fewer of your hearing date.
The Role of the Texas Department of Motor Vehicles in Lemon Law Cases
The Texas Department of Motor Vehicles is the ultimate authority in all lemon law cases in the Lone Star State. They handle the entire process from receiving complaints to enforcing final orders and managing appeals.
In a nutshell, they manage:
- Receiving complaints.
- Reviewing complaints.
- Mediating between drivers and manufacturers.
- Referring cases to the State Office of Administrative Hearings (SOAH).
- Issuing final decisions using the independent hearing examiner’s recommendations.
- Managing appeals.
Note that you don’t have to accept the final decision from the Texas Department of Motor Vehicles. You’re also entitled to file an appeal in a state district court in your county if you believe the decision was wrong.
Consumer Rights Under Texas Lemon Laws
All consumers have rights when buying or leasing a vehicle to ensure they’re not left out of pocket when their car has persistent defects that don’t improve after multiple repair attempts.
If your car is confirmed as a lemon and your lemon law claim succeeds, you’re entitled to one of three remedies:
- Repair – The manufacturer must repair the defect at no charge. If you’ve already paid for repairs yourself to fix a defect covered under an active warranty, you could be reimbursed for all repair costs.
- Replacement – The manufacturer agrees to provide a comparable vehicle as a replacement. It usually has to be the same make or model, but it won’t cover upgrades or extra features.
- Repurchase – The manufacturer buys the vehicle back from you at the purchase price, essentially refunding you for the vehicle. However, the manufacturer can deduct a reasonable allowance for any vehicle use. The repurchase costs will include any license, title, and tax fees.
Understanding Arbitration: How It Works in Lemon Law Cases
Arbitration and mediation are key parts of the dispute resolution process in lemon law claims. They’re less formal hearings, but are much faster than going to court.
The Texas Department of Motor Vehicles will encourage mediation to reach a suitable settlement. If no settlement can be reached, you’re entitled to file a formal complaint, have a hearing under an independent hearing examiner, and receive a decision.
If you’re not happy with the decision, you can file for a rehearing or make further appeals via a state district court.
Time Limits for Filing a Lemon Law Claim
All lemon law claims have a timeline attached to them. You’re required to file a claim within six months of one of the following expiring:
- Expiration of your express warranty term.
- 24 months after buying the vehicle.
- 24,000 miles since the vehicle was delivered to you.
The earliest of these three dates applies. If you don’t file your claim in time, you’ll lose the right to claim at all.
Texas Lemon Law for Used Cars
References to lemon laws are nearly always made in relation to new motor vehicles because this is what they were designed for. Sometimes, used cars may also fall under these laws, but only in certain circumstances.
Generally, a used vehicle must still have a manufacturer's original warranty to qualify. Warranties provided by dealers don’t count for lemon law claims purposes. Other than this requirement, the same rules apply as to new cars. The defect must be reported while the warranty is still active, and the manufacturer or dealer must receive a reasonable number of attempts to repair the defect.
On a side note, if a used vehicle is sold “as-is”, it’s not eligible for a claim under Texas’s lemon laws, as it’s implied that you were aware of the vehicle’s condition when you bought it.
How Claims Differ for Used Vehicles Past Warranty
Used vehicles that are past their original factory warranty don’t qualify under the Texas lemon law. However, there are other options open to you if you’ve been sold a defective vehicle, but they require filing formal lawsuits under different acts.
The Magnuson-Moss Warranty Act is one route because the law covers consumers who bought products with warranties, which includes used vehicles. If the warranty terms aren’t honored, you can seek restitution.
The Texas Deceptive Trade Practices Act (DTPA) is another option open to you. The DTPA applies if the seller misrepresented the condition of the vehicle or didn’t disclose a known defect at the time.
Filing a lawsuit under either of these acts is far more complex and shouldn’t be done without an experienced lemon law attorney at your disposal.
Common Myths and Misconceptions About Lemon Law
Lemon law is filled with misunderstandings and misconceptions, which is why many Texans are left out of pocket when they get stuck with a defective vehicle. To help you understand your rights, here are five of the most common myths about these laws:
- Lemon Laws Only Apply to New Cars – Partially true. They mainly apply to new cars, but used cars that are still under their original manufacturer’s warranty are covered under these laws.
- Any Defect Makes a Car a Lemon – Not every defect qualifies under the law. The issue counts if it substantially impairs use, the defect poses a risk to safety, or it impacts its value.
- Filing a Claim is Complicated – It used to be complicated, but that’s changed. The dedicated online complaint process makes claiming more straightforward than ever.
- The Dealer Decides – The dealer can offer an informed opinion about whether your car qualifies as a lemon, but they don’t decide these claims. Claim eligibility is decided exclusively by the established legal regulations.
- You Can Only Get a Replacement – A comparable loaner vehicle is one option as part of a successful claim, but they’re not the only one. You can also opt for a free repair or a refund.
Connecting Lemon Law to Auto Accident Victims
Lemons aren’t just annoying. They’re contributors to car accidents, especially when the defect is related to a vehicle’s safety features. There are multiple shared challenges in seeking justice between lemon law claimants and car accident claimants.
In all cases, consumers face complex legal processes, resistance from insurers and manufacturers, and challenges in proving defects and who was at fault. That’s why a personal injury attorney is so valuable.
Importance of Legal Representation in Complex Vehicle Cases
Legal representation gives you peace of mind that you have an expert by your side. Proper legal counsel helps unpick the complexities of vehicle-related cases, especially when a lemon vehicle results in a car accident.
Lawyers will interpret all relevant laws, identify liable parties, and maximize the compensation you’re entitled to. Crucially, they will handle all the processes and procedures, enabling you to take a back seat and avoid making mistakes that could derail your claim.
How Team Justice Supports Victims in Navigating Legal Processes
At DJC Law, we champion the legal rights of consumers in Austin and the surrounding Travis County area, ensuring that you’re not left out of pocket because of the negligence of another driver or auto manufacturer.
Defective vehicles can wreck lives, which is why we handle everything on behalf of victims, including:
- Providing objective legal advice.
- Investigating your case.
- Gathering evidence.
- Negotiating with opposing parties.
- Representing you in court, if necessary.
It’s our tenacious, empathetic approach to justice that explains why we have over 1,300 positive Google reviews and a 99% case success rate. Schedule your free consultation to learn more today.
Conclusion: Protecting Your Rights Under the Texas Lemon Law
The Texas lemon law is there to protect you against manufacturers and dealers who sell defective vehicles and fail to fix their mistakes after fair warning. As part of enforcing road safety and defending consumers from being left out of pocket, we represent our clients in making claims and filing lemon law suits.
With over $400 million won on behalf of hardworking Texans, we’re best-placed to assert your legal right to damages. Start filing your lemon law claim and holding guilty parties to account by contacting us to schedule your free case evaluation now.
Frequently Asked Questions About Texas Lemon Law
Do I need an attorney to file a lemon law claim?
It isn’t mandatory to hire an attorney to file or manage your claim, but the process is more complicated than many think. Consumers often underestimate what these claims entail, making a lawyer a useful figure for representing your interests.
Who is responsible for the Texas lemon law?
The Texas Department of Motor Vehicles is empowered under state law to handle everything from receiving and reviewing complaints to making final decisions after formal hearings.
Can I drive my vehicle while filing a lemon law claim?
Yes, you can continue to use your vehicle as before while your claim is in progress. The one exception is if your vehicle is functionally unsafe to be on the road. If any other issues arise, keep records and amend your existing claim accordingly.
