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STANDARDS OF THE NEW JERSEY LEMON LAW

The following is a brief explanation of most relevant provisions of the New Jersey lemon law. The complete text of the lemon law can be found at N.J. Stat. Ann. § 56:12-29 et seq.

For more information about the lemon law, or to obtain a copy of “Consumer's Guide to the New Jersey Lemon Law,” consumers may call the New Jersey Division of Consumer Affairs, Lemon Law Unit at (973) 504-6226, or visit http://www.njconsumeraffairs.com/ocp/lemguide.htm .

VEHICLES COVERED

The New Jersey lemon law covers a passenger automobile (any motor vehicle used and designed for the transportation of passengers, other than an omnibus or school bus) and motorcycle that is purchased, leased or registered in New Jersey. The lemon law covers used vehicles, but does not cover the living facilities of motor homes.

The New Jersey Attorney General’s Office has indicated that the lemon law does not cover vehicles with a commercial registration.

CONSUMERS COVERED

The lemon law covers the following “consumers”:

1. The buyer or lessee, other than for purposes of resale or sublease, of a motor vehicle;

2. Any person to whom a motor vehicle is transferred during the duration of a warranty applicable to the motor vehicle; and

3. Any other person entitled by the terms of the warranty to enforce its obligations.

VEHICLE CONVERTERS

The lemon law applies to vehicle converters.

PROBLEMS COVERED

The lemon law covers any nonconformity, which it defines as a defect or condition that substantially impairs the use, value or safety of a motor vehicle.

The lemon law provides an affirmative defense if the manufacturer can show that the alleged nonconformity does not substantially impair the use, value, or safety of the new motor vehicle, or the nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the motor vehicle by anyone other than the manufacturer or its dealer.

MANUFACTURER’S DUTY TO REPAIR

If a consumer reports a nonconformity to the manufacturer or its dealer during the first 18,000 miles of operation or during the period of two years following the date of the motor vehicle’s original delivery to a consumer, whichever is earlier, then the manufacturer must make or arrange within a reasonable time all repairs necessary to correct the nonconformity.

MANUFACTURER’S DUTY TO REPURCHASE OR REPLACE A VEHICLE

If the manufacturer or its dealer is unable to repair or correct a nonconformity within a reasonable time during the first 18,000 miles of operation or during the period of two years following the date of the motor vehicle’s original delivery to a consumer, whichever is earlier, then the manufacturer must repurchase or replace the motor vehicle.

REASONABLE NUMBER OF REPAIR ATTEMPTS

The New Jersey lemon law establishes a presumption that a manufacturer or its dealer is unable to repair or correct a nonconformity within a reasonable time if, within the first 18,000 miles of operation or during two years following the date of the motor vehicle’s original delivery to a consumer, whichever is earlier, either of the following occurs:

1. Substantially the same nonconformity has been subject to repair three or more times by the manufacturer or its dealer and the nonconformity continues to exist; or

2. The vehicle is out of service due to repair for one or more nonconformities for a cumulative total of 20 or more calendar days since the original delivery of the motor vehicle and a nonconformity continues to exist.

The two year term and the 20 day period specified in this section are extended by any period of time during which repair services are not available to the consumer because of war, invasion or strike, or a fire, flood or other natural disaster.

NOTICE AND OPPORTUNITY TO REPAIR

The above presumption applies against the manufacturer only if (1) the consumer or someone on the consumer’s behalf notifies the manufacturer in writing, by certified mail return receipt requested, of a potential claim; and (2) the manufacturer has had one opportunity to repair or correct the defect or condition within ten calendar days following receipt of this notification. Notification by the consumer must take place any time after the vehicle has had substantially the same nonconformity subject to repair two or more times or has been out of service by reason of repair for a cumulative of 20 or more calendar days.

DISPUTE RESOLUTION

If the manufacturer has established or participates in an informal dispute settlement procedure pursuant to 15 U.S.C. Sec. 2310 and 16 C.F.R. Part 703, or pursuant to the requirements of the lemon law, a consumer may but is not required to submit a dispute to the informal dispute settlement procedure before participating in the Division of Consumer Affairs’ summary hearing procedure.

A consumer is not required to participate in either a manufacturer’s informal dispute settlement procedure or the Division of Consumer Affairs’ summary hearing procedure before filing an action in court.

TIME PERIOD FOR FILING CLAIMS

Not specified. Assuming that the UCC statute of limitations applies, a claim must be filed with BBB AUTO LINE within four years from the date the alleged defect is discovered.

Please note that certain actions must be taken within specified time frames when filing a lemon law claim with BBB AUTO LINE or when seeking a hearing with the Division of Consumer Affairs’ Automotive Dispute Resolution Program.

 

REMEDIES UNDER THE NEW JERSEY LEMON LAW

REPURCHASE OF OWNED VEHICLES

The New Jersey lemon law provides that a manufacturer must pay the following amounts when it repurchases an owned vehicle under the lemon law:

1. Purchase price of the original motor vehicle, including any stated credit or allowance for the consumer’s used vehicle;

2. The cost of any options or other modifications arranged, installed, or made by the manufacturer or its dealer within 30 days after the date of original delivery; and

3. Any other charges or fees, including but not limited to sales tax, license and registration fees, finance charges, reimbursement for towing and reimbursement for actual expenses incurred by the consumer for the rental of a vehicle equivalent to the consumer’s vehicle during the period during which the consumer’s vehicle was out of service due to a nonconformity;

4. Less a reasonable allowance for vehicle use.

Refunds must be made to the consumer and lienholder, if any, as their interests appear on the records of ownership.

The reasonable allowance for use is defined to mean the mileage at the time the consumer first presents the motor vehicle to the dealer or manufacturer for correction of a nonconformity times the purchase price of the vehicle, divided by one hundred thousand miles.

REPURCHASE OF LEASED VEHICLES

The New Jersey lemon law states that a manufacturer must pay the following amounts when it repurchases a leased vehicle under the lemon law:

To the lessee:

1. A full refund of the amount actually paid by the consumer under the lease agreement; and

2. Any other charges or fees actually paid by the consumer, including but not limited to sales tax, license and registration fees, finance charges, reimbursement for towing and reimbursement for actual expenses incurred by the consumer for the rental of a vehicle equivalent to the consumer’s vehicle during the period during which the consumer’s vehicle was out of service due to a nonconformity;

3. Less a reasonable use allowance for vehicle use.

To the lessor:

1. A full refund of the vehicle’s original purchase price plus any unrecovered interest expense;

2. Less the amount actually paid by the consumer under the lease agreement.

Refunds shall be made to the lessor and lienholder, if any, as their interests appear on the records of ownership. The consumer’s lease agreement with the motor vehicle lessor is terminated and no penalty for early termination is assessed.

The reasonable allowance for use is the mileage at the time the consumer first presents the motor vehicle to the dealer or manufacturer for correction of a nonconformity times the lease price of the vehicle, divided by one hundred thousand miles.

REPLACEMENT

When replacing a vehicle under the New Jersey lemon law, the manufacturer must ensure that any lien on the returned motor vehicle is transferred to the replacement vehicle. The reasonable allowance for use does not apply to a replacement.

NEW JERSEY LEMON LAW SUMMARY

EXECUTIVE SUMMARY
TIME PERIOD FOR FILING CLAIMS Not specified. Assuming UCC statute of limitations applies, claim must be filed within four years from the date the alleged defect is discovered.
ELIGIBLE VEHICLE A passenger automobile or motorcycle purchased, leased or registered in New Jersey. Excludes the living facilities of motor homes and vehicles registered for commercial use. Covers used vehicles.
ELIGIBLE CONSUMER (1) Buyer or lessee, other than for purposes of resale or sublease, of a motor vehicle; (2) any person to whom a motor vehicle is transferred during the duration of a warranty applicable to the motor vehicle; and (3) any other person entitled by the terms of the warranty to enforce the obligations of the warranty.
TIME PERIOD FOR FIRST OCCURRENCE OR NOTICE Earlier of 18,000 miles or two years following original delivery to a consumer.
TIME PERIOD FOR REASONABLE NUMBER OF ATTEMPTS TO REPAIR Earlier of 18,000 miles or two years following original delivery to a consumer.
PRESUMPTION OR DEFINITION Presumption: within earlier of 18,000 miles or two years following original delivery to a consumer, either (1) three or more repair attempts or (2) out of service for 20 or more calendar days.
NOTICE TO MANUFACTURER For presumption to apply. Written notice, by certified mail return receipt requested, after the two or more repair attempts to same nonconformity or out of service for 20 or more calendar days.
FINAL OPPORTUNITY TO REPAIR For presumption to apply; must repair within 10 calendar days following receipt of consumer‘s written notice.
REASONABLE ALLOWANCE Refund only: mileage at time consumer first presents vehicle to dealer or manufacturer for correction of nonconformity, divided by 100,000, multiplied by purchase or lease price.
DISPUTE RESOLUTION Consumer may submit dispute to manufacturer‘s procedure or state-operated arbitration program.
DISCLOSURE TO SUBSEQUENT PURCHASER Yes.
TITLE BRANDING Yes.

 

NEW JERSEY LEMON LAW SUMMARY

1. Citation N.J. Stat. Ann. §§ 56:12-29 through 56:12-49; N.J. Admin. Code §§ 13:45A-26.1 through 13:45A-26.15.
2. Motor vehicle covered Covers a passenger automobile (all automobiles used and designed for the transportation of passengers, other than omnibuses and school buses) and motorcycle that is purchased, leased or registered in New Jersey. Covers used vehicles, but excludes the living facilities of motor homes. The New Jersey Attorney General‘s Office has indicated that the lemon law does not cover vehicles registered for commercial use.
3. Consumer covered (1) The buyer or lessee, other than for purposes of resale or sublease, of a motor vehicle; (2) Any person to whom a motor vehicle is transferred during the duration of a warranty applicable to the motor vehicle; and (3) Any other person entitled by the terms of the warranty to enforce the obligations of the warranty.
4. Nonconformity defined A defect or condition that substantially impairs the use, value or safety of a motor vehicle.
5. Warranty defined —Manufacturer‘s warranty“ or —warranty“ means any express or implied warranty of the manufacturer, of a new motor vehicle of its condition and fitness for use, including any terms or conditions precedent to the enforcement of obligations under the warranty.
6. Lemon law rights period Not specified.
7. Manufacturer‘s obligation to repair If a consumer reports a nonconformity to the manufacturer or its dealer during the first 18,000 miles of operation or during the period of two years following the date of the motor vehicle‘s original delivery to a consumer, whichever is earlier, then the manufacturer must make or arrange within a reasonable time all repairs necessary to correct the nonconformity.
8. Manufacturer‘s obligation to repurchase or replace If the manufacturer or its dealer is unable to repair or correct a nonconformity within a reasonable time during the first 18,000 miles of operation or during the period of two years following the date of the motor vehicle‘s original delivery to a consumer, whichever is earlier, then the manufacturer must repurchase or replace the motor vehicle.
9. Criteria for reasonable number of repair attempts Presumed if, within the first 18,000 miles of operation or during two years following the date of the motor vehicle‘s original delivery to a consumer, whichever is earlier, either of the following occurs: (1) Substantially the same nonconformity has been subject to repair three or more times by the manufacturer or its dealer and the nonconformity continues to exist; or (2) The vehicle is out of service due to repair for one or more nonconformities for a cumulative total of 20 or more calendar days since the original delivery of the motor vehicle and a nonconformity continues to exist.
10. Notice of nonconformity and final opportunity to repair The presumption applies against the manufacturer only if (1) The consumer or someone on the consumer‘s behalf notifies the manufacturer in writing, by certified mail return receipt requested, of a potential claim; and (2) The manufacturer has had one opportunity to repair or correct the defect or condition within ten calendar days following receipt of this notification. Notification by the consumer must take place any time after the vehicle has had substantially the same nonconformity subject to repair two or more times or has been out of service by reason of repair for a cumulative of 20 or more calendar days.
11. Affirmative defenses It is an affirmative defense that: (1) The alleged nonconformity does not substantially impair the use, value, or safety of the new motor vehicle, or (2) The nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the motor vehicle by anyone other than the manufacturer or its dealer.
 
12. Refund Purchased Vehicle Refund consists of: (1) Purchase price of the original motor vehicle, including any stated credit or allowance for the consumer‘s used vehicle; (2) The cost of any options or other modifications arranged, installed, or made by the manufacturer or its dealer within 30 days after the date of original delivery; and (3) Any other charges or fees, including but not limited to sales tax, license and registration fees, finance charges, reimbursement for towing and reimbursement for actual expenses incurred by the consumer for the rental of a vehicle equivalent to the consumer‘s vehicle during the period during which the consumer‘s vehicle was out of service due to a nonconformity; (4) Less a reasonable allowance for vehicle use. Leased Vehicle To the lessee: (1) A full refund of the amount actually paid by the consumer under the lease agreement; and (2) Any other charges or fees actually paid by the consumer, including but not limited to sales tax, license and registration fees, finance charges, reimbursement for towing and reimbursement for actual expenses incurred by the consumer for the rental of a vehicle equivalent to the consumer‘s vehicle during the period during which the consumer‘s vehicle was out of service due to a nonconformity; (3) Less a reasonable use allowance for vehicle use. To the lessor: (1) A full refund of the vehicle‘s original purchase price plus any unrecovered interest expense; (2) Less the amount actually paid by the consumer under the lease agreement. The consumer‘s lease agreement with the motor vehicle lessor is terminated and no penalty for early termination is assessed.
13. Replacement Replacement is not defined. It is the manufacturer‘s responsibility to insure that any lien on the returned vehicle is transferred to the replacement vehicle.
14. Reasonable allowance Applies to a refund but not to a replacement. The reasonable allowance for vehicle use is defined as: Mileage at the time consumer first presents vehicle to dealer or manufacturer for correction of a nonconformity purchase -------------------––––-------------------X or lease 100,000 price
15. Refund of sales tax Manufacturer refunds sales tax to the consumer. No provision for the manufacturer to obtain a refund of sales tax from the state.
16. Enhanced damages Not specified.
17. Attorney‘s fees In an action by a consumer against a manufacturer, brought in court or state-operated arbitration, a prevailing consumer will be awarded reasonable attorney‘s fees, expert witness fees, and costs.
18. Statute of limitations Not specified. Assuming that the UCC statute of limitations applies, a claim must be filed within four years from the date the alleged defect is discovered.
19. Manufacturer sponsored arbitration The consumer may submit a dispute to an informal dispute settlement procedure but need not before participating in the state-operated arbitration program or filing an action in court.
 
20. State-sponsored arbitration
The consumer has the option of submitting any dispute to the state-operated arbitration program. Although the consumer is not required to participate in the state program, a decision rendered by the state-operated arbitration program is binding on the consumer and manufacturer, subject to a right of appeal, and will preclude a court action under the lemon law.
21. Dealer liability Nothing in the lemon law imposes any liability on a dealer, or creates a cause of action by a consumer or manufacturer against a dealer.
22. Restrictions on resale of returned vehicles

Lemon Law If a motor vehicle is returned to the manufacturer under any state‘s lemon law or as the result of a legal action or an informal dispute settlement procedure, it may not be resold or released in New Jersey unless: (1) The manufacturer provides to the dealer or lessor, and the dealer or lessor provides to the consumer, the following written statement on a separate piece of paper in 10-point bold-face type: IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT CONFORM TO THE MANUFACTURER’S WARRANTY AND THE NONCONFORMITY WAS NOT CORRECTED WITHIN A REASONABLE TIME AS PROVIDED BY LAW (2) The dealer or lessor obtains from the consumer a signed receipt certifying that the written statement has been provided. The dealer or lessor may fulfill this obligation by making the required notation in a conspicuous and understandable manner on the vehicle buyer order form accompanying the sale or lease; and (3) The dealer or lessor notifies the Division of Motor Vehicles of the sale or transfer of ownership of the motor vehicle. Regulations If a motor vehicle is returned to the manufacturer under any state‘s lemon law or as the result of a legal action or an informal dispute settlement procedure, it may not be resold or released in New Jersey unless: (1) Upon receipt of the vehicle, the manufacturer, its agent or a dealer who accepts the vehicle must cause the words —RœRETURNED TO MANUFACTURER UNDER LEMON LAW OR OTHER PROCEEDING“ to be clearly and conspicuously stamped on the face of the original certificate of title, the manufacturer‘s statement of origin, or other evidence of ownership; (2) Within 10 days of receipt of the vehicle, the manufacturer, its agent or dealer must submit a copy of the stamped document to the Division of Motor Vehicles for permanent branding; (3) The manufacturer provides to the dealer or lessor, and the dealer or lessor provides to the consumer, the following written statement on a separate piece of paper in 10-point bold-face type: NOTICE OF NONCONFORMITY IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT CONFORM TO THE MANUFACTURER’S WARRANTY AND THE NONCONFORMITY WAS NOT CORRECTED WITHIN A REASONABLE TIME AS PROVIDED BY LAW (This notice is required under the New Jersey “Lemon Law”, N.J.S.A. 56:12-1 et seq., for vehicles that have been replaced or repurchased by the manufacturer as the result of any one of the following: a court judgment, or a final decision pursuant to a hearing or settlement by the Office of Administrative Law, or an arbitration proceeding between the manufacturer or its agent and a consumer.) (4) Upon delivery to the consumer of this statement, the dealer or lessor must obtain from the consumer a signed receipt on a separate piece of paper stating the following, in underlined 10point bold-face type: I ACKNOWLEDGE RECEIPT OF NOTICE OF NONCONFORMITY OF THIS VEHICLE, VIN NO. _________________ AS REQUIRED BY N.J.S.A. 56:12-35 (THE “LEMON LAW”).

Alternatively, the dealer or lessor may make the following notation in underlined bold-face type on the front page of the vehicle buyer order form or the lease form: NOTICE OF NONCONFORMITY OF THIS VEHICLE, FIN NO. _____________, HAS BEEN PROVIDED TO THE PURCHASER OR LESSEE, AS REQUIRED BY N.J.S.A. 56:12-35 (THE “LEMON LAW”). (5) The manufacturer, dealer or lessor must notify the Division of Motor Vehicles of the resale or release of the vehicle by requesting transfer of the branded title to the new owner or lessor, in writing.

 
23. Point of sale notice of lemon law rights Lemon Law At the time of purchase or lease of a motor vehicle in New Jersey, the manufacturer through its dealer or the lessor must provide directly to the consumer the following written statement on a separate piece of paper in 10-point bold-face type: IMPORTANT: IF THIS VEHICLE IS DEFECTIVE, YOU MAY BE ENTITLED UNDER NEW JERSEY LAW TO A REFUND OF THE PURCHASE PRICE OR YOUR LEASE PAYMENTS. FOR COMPLETE INFORMATION REGARDING YOUR RIGHTS AND REMEDIES UNDER THE RELEVANT LAW, CONTACT THE NEW JERSEY DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF CONSUMER AFFAIRS Regulations At the time of purchase or lease of a motor vehicle in New Jersey, the manufacturer through its dealer or the lessor must provide directly to the consumer the following written statement on a separate piece of paper in 10-point bold-face type: IMPORTANT: IF THIS VEHICLE IS DEFECTIVE, YOU MAY BE ENTITLED UNDER NEW JERSEY LAW TO A REFUND OF THE PURCHASE PRICE OR YOUR LEASE PAYMENTS. FOR COMPLETE INFORMATION REGARDING YOUR RIGHTS AND REMEDIES UNDER THE RELEVANT LAW, CONTACT THE NEW JERSEY DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF CONSUMER AFFAIRS, LEMON LAW UNIT, AT POST OFFICE BOX 45026, NEWARK, NEW JERSEY 07101, TEL. NO. (973) 504-6226. The manufacturer, through its dealer or lessor, must maintain a record substantiating compliance with this requirement and make the record available to the Division upon request.
24. Limitation on waiver Any agreement entered into by a consumer for the purchase or lease of a new motor vehicle that waives, limits or disclaims lemon law rights is void as contrary to public policy.





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