VEHICLES COVERED BY THE ARKANSAS LEMON LAW

The Arkansas lemon law covers motor vehicles that are licensed, purchased, or leased in Arkansas and primarily designed for transportation of persons or property over public streets and highways. The lemon law does not cover mopeds, motorcycles, or the living facilities of motor homes. Except for motor homes, the lemon law does not cover vehicles with a G.V.W. rating of over 10,000 pounds. Used vehicles might be covered if transferred during the MVQA period.

CONSUMERS COVERED BY THE ARKANSAS LEMON LAW

The Arkansas lemon law covers:

1. The purchaser or lessee, other than for the purpose of resale or sublease, of a new or previously untitled motor vehicle; and

2. Any other —person“ entitled to enforce the obligations of a manufacturer‘s new vehicle warranty during the duration of the Motor Vehicle Quality Assurance period [see definition below], provided the purchaser has titled and registered the motor vehicle as prescribed by law.

The definition of —person“ includes any natural person, a partnership, firm, corporation, association, joint venture, trust, or other legal entity.

PROBLEMS COVERED BY THE ARKANSAS LEMON LAW

The Arkansas lemon law covers vehicle nonconformities. A nonconformity means any specific or generic defect or condition, or any concurrent combination of defects or conditions, that:

1. Substantially impairs the use, market value, or safety of a motor vehicle; or

2. Renders the vehicle nonconforming to the terms of an applicable manufacturer‘s express warranty or implied warranty of merchantability.

The Arkansas lemon law provides the manufacturer with an affirmative defense if it can be shown that:

1. The nonconformity, defect, or condition does not substantially impair the use, value or safety of the vehicle; or

2. The nonconformity, defect or condition is the result of an accident, abuse, neglect or unauthorized modification or alteration of the vehicle by persons other than the manufacturer, its agent, or authorized dealer.

This information is not intended as legal advice. Please direct specific questions to your legal counsel.

THE MOTOR VEHICLE QUALITY ASSURANCE PERIOD

The Arkansas lemon law establishes a Motor Vehicle Quality Assurance period, which will be referred to as the MVQA period. The MVQA period is the period of time that:

BEGINS on the date of original delivery of a motor vehicle to a consumer^* AND

ENDS 24 months after the date of the original delivery of the vehicle to a consumer, or the

first 24,000 miles of operation attributable to the consumer, WHICHEVER IS LATER.

NOTICE TO THE MANUFACTURER

The Arkansas lemon law provides that, if a motor vehicle has a nonconformity and the consumer reports the nonconformity to the manufacturer, its agent, or authorized dealer during the MVQA period (see definition above), the nonconformity must be corrected, even if the repairs are made after the expiration of the MVQA period.

After 3 attempts have been made to repair the same nonconformity, or after 1 attempt to repair a nonconformity likely to cause death or serious bodily injury, the consumer must notify the manufacturer BY CERTIFIED OR REGISTERED MAIL of the need to repair the nonconformity in order to allow the manufacturer a final attempt to cure the nonconformity.

FINAL REPAIR ATTEMPT

Within 10 days after receipt of the certified or registered notice from the consumer, the manufacturer must provide the consumer with the opportunity to have the vehicle repaired at a reasonably accessible repair facility. Repairs must be accomplished within 10 days after the vehicle is delivered by the consumer to that repair facility.

The requirement that the manufacturer be given a final attempt to cure the nonconformity does not apply if:

1. The manufacturer fails to notify and provide the consumer with the opportunity to have the vehicle repaired at a reasonably accessible repair facility; or

2. The manufacturer fails to perform the repairs within 10 days after the vehicle is delivered by the consumer to the designated repair facility.

MANUFACTURER‘S DUTY TO REPURCHASE OR REPLACE A VEHICLE

If the manufacturer, its agent, or authorized dealer has not conformed the motor vehicle to the warranty by repairing or correcting one or more nonconformities that substantially impair the motor vehicle after a reasonable number of attempts, the manufacturer must repurchase or replace the vehicle within 40 days.

*

If the consumer has received a replacement vehicle from the manufacturer, the lemon law rights period begins on the date of delivery of the replacement vehicle to the consumer.

This information is not intended as legal advice. Please direct specific questions to your legal counsel.

REASONABLE NUMBER OF REPAIR ATTEMPTS

The Arkansas lemon law provides a rebuttable presumption that the manufacturer and its authorized service agent have had a reasonable number of attempts to repair a vehicle if any of the following occurs:

1. A nonconformity continues to exist after it has been subject to repair three times by the manufacturer and/or its dealers PLUS a final repair attempt by the manufacturer after receipt of certified or registered mail notice from the consumer;

2. A nonconformity that is likely to cause death or serious bodily injury continues to exist after it has been subject to repair one time by the manufacturer and/or its dealers PLUS a final repair attempt by the manufacturer after receipt of certified or registered mail notice from the consumer;

3. The vehicle is out of service by reason of repair, or attempt to repair, any nonconformity for a cumulative total of 30 calendar days^*; or

4. There have been 5 or more attempts, on separate occasions, to repair any nonconformities that together substantially impair the use and value of the vehicle to the consumer.

A nonrebuttable presumption arises if, after the consumer sends the required notice by certified or registered mail, the manufacturer fails to notify and provide the consumer with the opportunity to have the vehicle repaired at a reasonably accessible repair facility or the manufacturer fails to perform the repairs within 10 days after the vehicle is delivered by the consumer to the designated repair facility.

A manufacturer, its agent or authorized dealer may not refuse to diagnose or repair any vehicle for the purpose of avoiding liability under the lemon law. A manufacturer, its agent or authorized dealer must provide the consumer with a written repair order each time the vehicle is brought in for examination or repair. The repair order must include reference to each defect, nonconformity, or other complaint brought to the attention of the manufacturer, its agent or authorized dealer. Each presentation of the vehicle by the consumer with a reasonable opportunity to repair the vehicle is considered a repair attempt for the defects, nonconformities or other complaints noted in the repair order.

In the case of a motor home, where 2 or more manufacturers contributed to the construction of the vehicle, it shall be considered a repair attempt only if the facility is authorized by the manufacturer to provide warranty service for the vehicle. If a consumer presents their motor home for repairs at an authorized facility but decides to continue traveling rather than having the repairs done at that time, it does not count as a repair attempt.

*

This 30-day period is extended by any period of time during which repair services are not available as a direct result of war, invasion, strike, fire, flood, or natural disaster. The manufacturer or dealer must provide for the free use of a vehicle by the consumer after the 30-day period if delay is due to the problems listed above.

This information is not intended as legal advice. Please direct specific questions to your legal counsel.

DISPUTE RESOLUTION

A manufacturer doing business in Arkansas, entering into franchise agreements for the sale of its vehicles in Arkansas, or offering express warranties on its vehicles sold or distributed in Arkansas must operate or participate in an informal dispute settlement procedure. The informal procedure must be located in Arkansas and must comply with the lemon law.

The lemon law provisions requiring repurchase or replacement of a nonconforming motor vehicle do not apply to a consumer who has not first used the informal procedure before commencing a civil action, unless the manufacturer allows a consumer to forego the procedure or the manufacturer, its agent or authorized dealer has failed to provide the consumer with the Attorney General‘s description of the consumer‘s rights and obligations under the lemon law.

TIME PERIOD FOR FILING CLAIMS

The Arkansas lemon law requires actions to be commenced within two years following the date that the consumer first reports the nonconformity to the manufacturer, its agent, or authorized dealer, or following the date that the consumer files a claim with the informal dispute settlement procedure.

This information is not intended as legal advice. Please direct specific questions to your legal counsel.

Leased Vehicles

The Arkansas lemon law provides that the manufacturer must pay the following amounts when it repurchases a leased vehicle:

To the Lessor:

1. 105% of the lessor‘s actual purchase costs, minus the total of all deposit and rental payments paid by the lessee to the lessor;

2. Collateral charges (see above), if applicable;

3. Any fee paid to another to obtain the lease;

4. Any insurance or other costs expended by the lessor for the benefit of the lessee, and

5. An amount equal to state and local sales taxes, not otherwise included as collateral charges, paid by the lessor when the vehicle was purchased.

To the Lessee:

1. All deposit and rental payments paid by the lessee to the lessor; and

2. Incidental charges (see above), if applicable.

3. Less a reasonable offset for use and a reasonable offset for physical damage to the vehicle.

At the time of the refund, the consumer or lessor must furnish to the manufacturer clear title to and possession of the motor vehicle. The consumer‘s lease agreement with the lessor is terminated upon payment of the refund, and no penalty for early termination can be assessed.

Allowance for the consumer‘s use of or damage to vehicle

The Arkansas lemon law states that a reasonable offset for the vehicle‘s use is deducted from the amounts a manufacturer pays to the owner or lessee when it repurchases a vehicle. The reasonable offset for use is determined by the following formula:

# miles traveled by vehicle prior to time vehicle purchase price the consumer first delivered vehicle to the (including charges manufacturer, agent or dealer for correction of for transportation

the problem that gave rise to the nonconformity X and manufacturer–-----------------------------------------–––- installed options)

120,000

The Arkansas lemon law also provides that a reasonable offset be made for physical damage sustained to the vehicle while under the ownership of the consumer.

REPLACEMENT

If a manufacturer replaces a vehicle under the Arkansas lemon law, the consumer must receive a replacement vehicle that is identical or reasonably equivalent to the replaced motor vehicle as it existed at the time of original acquisition. The manufacturer must also pay all collateral and reasonably incurred incidental charges (see above).

The consumer is responsible for paying a reasonable offset for use of the vehicle. The reasonable offset for use is determined by the following formula:

# miles traveled by vehicle prior to time vehicle purchase price

the consumer first delivered vehicle to the (including charges Reasonable manufacturer, agent or dealer for correction of for transportation offset the problem that gave rise to the nonconformity X and manufacturer- for use = –-----------------------------------------–––-installed options)

120,000

The Arkansas lemon law also provides that a reasonable offset be made for physical damage sustained to the vehicle while under the ownership of the consumer.

At the time of the replacement, the consumer, lienholder, or lessor must furnish to the manufacturer clear title to and possession of the motor vehicle.

This information is not intended as legal advice. Please direct specific questions to your legal counsel.