Guide to New and Leased Car Lemon Law

Under the Massachusetts Lemon Law, you may receive compensation for your new car, motorcycle, van or truck if you bought it in Massachusetts from a licensed dealer and it has at least one defect that substantially impairs its use, market value, or safety. The vehicle must be used by you for personal or family purposes, and must not have been bought by or registered to a business. The defect(s) must be discovered and subject to a reasonable number of repairs during the "term of protection" of 1 year or 15,000 miles of use from the date of the original delivery, whichever comes first.

You can pursue compensation under the Lemon Law by dealing directly with the dealer or manufacturer. If your attempts to receive compensation aren’t successful, Lemon Law arbitration is available through the Office of Consumer Affairs and Business Regulation (OCABR). 

A vehicle is considered a lemon if it has at least one defect that substantially that impairs the use, safety, or market value and the car has not been repaired after a reasonable number of attempts.

The new car section of the Lemon Law covers:

• New cars, motorcycles, vans, or trucks purchased or leased in Massachusetts from a dealer for personal or family purposes
• Vehicles within the “term of protection” — 1 year or 15,000 miles of use from the date of original delivery, whichever is first
• Cars leased after July 1, 1997

You do not meet the basic qualifications for Lemon Law compensation if your vehicle does not meet the criteria above. 

If your car is eligible, you must be able to demonstrate specifically how the use, safety, or market value is substantially impaired by the defect. To prove the market value impairment, you must show that your vehicle is worth at least 10% less than it would be without the defect.One way to do this is by having your car appraised.

Step 1)  A reasonable number of repair attempts

You must allow the selling dealer, a dealer that the manufacturer authorizes, or the manufacturer a reasonable number of attempts to repair the defect. The law defines a reasonable number of repairs as 3 times for the same defect. If the problem is still present after 3 or more repair attempts within 1 year or 15,000 miles of the original date of delivery of the car  — whichever comes first — then you can move onto Step 2.

Please note: If your car is out of service during repair attempts for 15 or more business days, that also meets the requirement, even if there aren’t 3 separate repair attempts. Under this law, a business day is any day the service department of an authorized dealer is open for business.

During the repair process, make sure that you:

• Keep complete and accurate records of all contact with the manufacturer and dealer.
• Keep all receipts.

PS: You have a right to a dated, itemized bill for any repair work, including warranty repair work, under statewide Motor Vehicle Regulations (940 CMR 5.05).

Step 2) Final repair attempt

As long as you met the criteria in Step 1 within the first year/15,000 miles, you have up to 18 months from the date you first took possession of the vehicle to take the remaining steps. If the substantial defect continues after the dealer or manufacturer has made a reasonable number of repair attempts, you must give the manufacturer one final repair opportunity, not to exceed 7 business days, to fix the defect. The 7-day period begins when the manufacturer knows or should know that the repair requirements have been met or exceeded.

Before 15 months from the date of delivery, you’ll need to send a letter notifying the manufacturer that you have made reasonable repair attempts. You can send the letter after the term of protection has ended.

It is recommended that you send your notice by mail, return receipt requested, regular mail and by email to the manufacturer’s regional office. Keep copies of all documents.

At the end of the 7 business days, if the manufacturer has your car, you may pick it up whether it has been fixed or not. If the defect hasn’t been repaired, you have a right to the cost of repairs, a refund, or a replacement car. Alternatively, the manufacturer may offer to replace the vehicle instead of refunding your money, but they cannot force you to accept a replacement instead of a refund. 

If you have taken the steps and the manufacturer refuses to refund your money or offer an acceptable replacement, you may apply for arbitration as long as your application is received by the Office of Consumer Affairs and Business Regulation within 18 months from the date you first took possession of the vehicle. 

Replacement for a purchased vehicle

The manufacturer may offer you a replacement vehicle. A new “term of protection” starts from the date of delivery of the replacement car.

The manufacturer must reimburse you for the following costs:

• Transfer of registration fees
• Sales tax resulting from the replacement
• Towing or rental charges resulting from the defect

If you financed your car through the manufacturer and you accept a replacement car you don’t have to enter into any refinancing agreement that would create financial obligations beyond those in the original agreement.

The manufacturer can not force you to accept and pay the difference for a replacement car that is more expensive than the car you are trying to replace.

Note: Neither party can demand a replacement vehicle instead of a refund. 

Refund for a purchased vehicle

If you're offered a refund for a vehicle you purchased, you will receive the full contract price of the car, including all credits and allowances for any trade-in vehicle. A reasonable allowance for the amount you used the car for will be deducted based on the car’s purchase price and the miles you drove the car during the time you owned it.

Car Use Deduction Formula = Contract $ / 100,000 X Mileage

Motorcycle Use Deduction Formula = Contract $ / 25,000 X Mileage

The manufacturer must reimburse you for the following costs:

• Sales tax
• Registration fees
• Finance charges
• Dealer-added options
• Towing or rental charges resulting from the defect
• Unused portion of an extended warranty
• Unused portion of credit insurance
• Defect-related incidental costs

You’re also entitled to a pro-rated excise tax refund from your city or town hall. The manufacturer is not required to reimburse you for any other consequential damages, including lost wages.

If you're offered a refund for your leased car, you’ll receive the total lease payments you made under the agreement. A reasonable allowance for use will be deducted based on the total payments made divided by 100,000 and then multiplied by the mileage.  

Total lease payments made to date:  

______$/month X ______months  

(Note: include 1st payment, even if it was due at lease signing)  

Total payments made under the lease (total of the 3 payments below)  

Acquisition Fee not included in lease payments  

Cash paid at lease signing to reduce capitalized cost (e.g., down payment, balloon payments)  

Trade in allowance  

Additional expenses:  

Security Deposit:  

Sales Tax on Down Payment Amount:  

Registration Fees:  

Extended Warranty  

Non-reimbursed Towing Charges:  

Non-reimbursed Costs for Alternate Transportation:  

Repair Charges:  

Credit Life/Disability Insurance  

Documentary Preparation Fee:  

Settlements or Awards Received:  

Other: