VEHICLES COVERED BY THE WISCONSIN LEMON LAW

The Wisconsin lemon law covers any motor driven vehicle that (1) is required to be registered or is exempt from registration as a nonresident or foreign-registered vehicle, and (2) a consumer purchases or accepts transfer of in Wisconsin. This includes a demonstrator or executive vehicle, but does not include mopeds, semitrailers, or trailers designed for use in combination with a truck or truck tractor.

The lemon law does not cover previously-owned vehicles.¹

CONSUMERS COVERED BY THE WISCONSIN LEMON LAW

The Wisconsin lemon law covers any of the following —consumers“:

1. The purchaser of a new motor vehicle, if the vehicle was purchased from a dealer for purposes other than resale;

2. A person to whom the motor vehicle is transferred during the warranty period unless the vehicle is transferred for purposes of resale;

3. A person who may enforce the vehicle‘s warranty; and

4. A person who leases a motor vehicle under a written lease.

The lemon law does not cover a former lessee who purchases the vehicle at the expiration of the lease term.²

PROBLEMS COVERED BY THE WISCONSIN LEMON LAW

The Wisconsin lemon law covers vehicle —nonconformities.“ A nonconformity is defined as a condition or defect that (1) is covered by an express warranty of the manufacturer³ applicable to the motor vehicle or to a component of the motor vehicle and (2) substantially impairs the use, value or safety of a motor vehicle. A nonconformity does not include a condition or defect that is the result of abuse, neglect, or unauthorized modification or alteration of a motor vehicle by a consumer.

MANUFACTURER‘S DUTY TO REPAIR

A nonconformity must be repaired if, before the expiration of the warranty or one year after the vehicle‘s first delivery to the consumer œ whichever is sooner, the consumer reports the

¹ Schey v. Chrysler Corp., 228 Wis.2d 483 (Ct. App.), review denied 228 Wis.2d 174 (1999). ² Varda v. General Motors Corp., 242 Wis.2d 756 (Ct. App.), review denied 246 Wis.2d 174 (2001). ³ Malone v. Nissan Motor Corp., 190 Wis.2d 437 (Ct. App. 1994); Bushendorf v. Freightliner Corp., 13 F.3d 1024 (7^th Cir. 1993).

nonconformity to the manufacturer, lessor, or the any of manufacturer‘s authorized dealers and makes the vehicle available for repair.

MANUFACTURER‘S DUTY TO REPURCHASE OR REPLACE A VEHICLE

If after a reasonable attempt to repair the nonconformity is not repaired, the manufacturer must either repurchase the vehicle or, if the vehicle is owned, replace the vehicle. [The Wisconsin lemon law does not provide for replacement of a leased vehicle.]

REASONABLE NUMBER OF REPAIR ATTEMPTS

The Wisconsin lemon law defines —reasonable attempt to repair“ as the occurrence of any of the following within the term of a vehicle‘s warranty or within one year after the vehicle‘s first delivery to a consumer, whichever is sooner:

1. The same nonconformity is subject to repair by the manufacturer, lessor, or any of the manufacturer‘s authorized dealers at least four times and the nonconformity continues. A nonconformity may be —subject to repair“ if the vehicle was presented to the dealership for repair⁴; or

2. The vehicle is out of service for an aggregate of at least 30 days because of warranty nonconformities. A vehicle is out of service if it is not capable of rendering service as warranted due to a nonconformity, even though the vehicle may be in possession of the consumer and may still be driven by the consumer⁵, as long as the consumer provided notice and made the vehicle available for repair.⁶

NOTICE

To receive a replacement or refund, a consumer must notify the manufacturer to request one of these remedies⁷ and must offer to transfer title of the motor vehicle to the manufacturer.

DISPUTE RESOLUTION

If a manufacturer participates in an informal dispute settlement procedure and that procedure has been certified by the Department of Transportation as complying with applicable regulations, a consumer may not bring an action in court under the lemon law unless the consumer first resorts to that informal dispute settlement procedure.

⁴ Chmill v. Friendly Ford-Mercury of Janesville, Inc., 144 Wis.2d 796 (Ct. App. 1988). ⁵ Vultaggio v. General Motors Corp., 145 Wis.2d 874 (Ct. App. 1988). ⁶ Carl v. Spickler Ent., Ltd., 165 Wis.2d 611 (Ct. App. 1991). ⁷ Berends v. Mack Truck, Inc., 252 Wis.2d 371 (Ct. App. 2002).

REPURCHASE OF AN OWNED VEHICLE

The Wisconsin lemon law sets out the following amounts that a manufacturer must pay when it repurchases an owned vehicle under the lemon law:

1. The full purchase price (not including any cash rebate⁸);

2. Sales taxes paid by the consumer, as well as any other amounts paid by the consumer at the point of sale;

3. Finance charges incurred by the consumer; and

4. Collateral costs, which are defined as expenses incurred by a consumer in connection with the repair of a nonconformity, including the costs of obtaining alternative transportation;

5. Less a reasonable allowance for the vehicle‘s use.

Refunds must be made to the vehicle owner and to any holder of a perfected security interest in the vehicle, as their interests may appear. When the manufacturer provides the refund, the consumer must return the nonconforming motor vehicle to the manufacturer and provide the manufacturer with the certificate of title and all endorsements necessary to transfer title to the manufacturer.

The Wisconsin lemon law provides that a reasonable allowance for a vehicle‘s use is subtracted from the amounts that a manufacturer must pay when it repurchases a vehicle under the lemon law. This reasonable allowance for use may not exceed the amount set out in the following formula for an owned motor vehicle:

reasonable # miles vehicle driven before vehicle allowance = nonconformity first reported to X purchase for use motor vehicle dealer price -------------------------------100,000

In computing the reasonable allowance for use of a motorcycle, the denominator should be changed from 100,000 to 20,000.

REPURCHASE OF A LEASED VEHICLE

The Wisconsin lemon law sets out the following amounts that a manufacturer must pay when it repurchases a leased vehicle under the lemon law:

To the lessor: The current value of the written lease. This is defined as œ

1. The total amount for which the lease obligates the consumer during the period of the lease remaining after its early termination;

⁸ Church v. Chrysler Corp., 221 Wis.2d 460 (Ct. App. 1998).

1. The motor vehicle dealer‘s early termination costs [any expenses or obligation the lessor incurs as a result of early termination]; and

2. The value of the motor vehicle at the lease expiration date if the lease sets forth that value;

3. Less the motor vehicle lessor‘s early termination savings [any expenses or obligation the lessor avoids as a result of early termination of the lease and the vehicle‘s return]. This includes any interest charges the lessor would have paid to finance the motor vehicle. If the lessor does not finance the vehicle, the early termination savings includes the difference between the total amount for which the lease obligates the consumer during the period of the lease term remaining after the early termination and the present value of that amount at the date of the early termination.

To the lessee:

1. The amount the consumer paid under the written lease; and

2. Any sales tax and collateral costs [expenses incurred by a consumer in connection with the repair of a nonconformity, including the costs of obtaining alternative transportation];

3. Less a reasonable allowance for the vehicle‘s use.

When the manufacturer provides the refund, the consumer must return the nonconforming motor vehicle to the manufacturer. The lessor must provide to the manufacturer the certificate of title and all endorsements necessary to transfer title to the manufacturer.

The Wisconsin lemon law provides that a reasonable allowance for a vehicle‘s use is subtracted from the amounts that a manufacturer must pay when it repurchases a vehicle under the lemon law. This reasonable allowance for use may not exceed the amount set out in the following formula for a leased motor vehicle:

reasonable # miles vehicle driven before total amount for allowance = nonconformity first reported to X which the lease for use manufacturer, dealer, or lessor obligates consumer -------------------------------100,000

In computing the reasonable allowance for use of a motorcycle, the denominator should be changed from 100,000 to 20,000.

REPLACEMENT OF AN OWNED VEHICLE

The Wisconsin lemon law provides that a replacement vehicle must be a comparable new vehicle. A demonstrator may be a comparable replacement if the returned vehicle was also a demonstrator.⁹ The reasonable allowance for use does not apply to a replacement.¹⁰

⁹ Dussault v. Chrysler Corp., 229 Wis.2d 296 (Ct. App. 1999). ¹⁰ Chmill v. Friendly Ford-Mercury of Janesville, Inc., 144 Wis.2d 796 (Ct. App. 1988).

When the manufacturer replaces a vehicle, it must also refund any collateral costs [expenses incurred by a consumer in connection with the repair of a nonconformity, including the costs of obtaining alternative transportation].

When the manufacturer provides the replacement motor vehicle, the consumer must return the nonconforming motor vehicle to the manufacturer and provide the manufacturer with the certificate of title and all endorsements necessary to transfer title to the manufacturer.

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