Get compensation for a new car through the Lemon Law
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Office of Consumer Affairs and Business Regulation
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Under the Massachusetts Lemon Law, you’re eligible for different types of compensation for serious defects that impair the use, market value, or safety of your new car, motorcycle, van, or truck bought or leased in Massachusetts from a licensed dealer. The vehicle must be used by you for personal or family purposes and the defect must be discovered within the "term of protection" of 1 year or 15,000 miles of use from the date of the original delivery, whichever comes first.
Compensation options include cost of repairs, refunds, repurchase, and canceling a sale. There are steps and eligibility requirements for each of these options. 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).
Before you can become eligible for reimbursement under the Lemon Law, you’ll need to take the following steps.
You must allow the dealer and the manufacturer a reasonable number of attempts to repair the defect.
To be eligible for compensation, the problem must still be 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.
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.
A business day in this instance 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.
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).
Final repair attempt
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 that the repair requirements have been met or exceeded.
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. 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.
How to get Get compensation for a new car through the Lemon Law
Once your car is eligible for the Lemon Law, you may be offered one of the following options.
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.
Note: You have a right to reject the replacement car and demand 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 mileage.
Car Use Deduction Formula = Contract $ / 100,000 X Mileage
Motorcycle Use Deduction Formula = Contract $ / 25,000 X Mileage
You may keep your car until you have been given a refund or an acceptable replacement car. Miles driven during this time will be included when calculating the allowance for use.
A 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. You will not be reimbursed for lost wages or other consequential damages.
Note: You can't reject a refund and demand a replacement.
Refund for a leased vehicle
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.
Cancel the sale of a purchased vehicle
You may cancel the sale of a car if:
- It fails to pass inspection within 7 days from date of purchase (not the date of registration).
- The estimated costs of defects or repairs exceed 10% of the purchase price.
- You complete the proper steps detailed in Failed Inspection “How To” within 14 days of date of sale.
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If the manufacturer refuses to refund you or replace your vehicle, you can seek arbitration, mediation, or file suit in court.