How to Reject a Car for Immediate Problems
You have done your homework, carefully selected the car, paid for it, and you are ready to drive it away. You expect to have many years of driving satisfaction and few problems. But here are some examples of problems that may come up immediately and suggestions for how to resolve them:

Problem #1:
In the excitement of taking delivery of your new car, you did not notice that the dealer provided you with a car which has a beige fabric interior although you ordered a car with brown leather seats. You discover this problem after you drive out of the dealership.

Solution:
Immediately drive back to the dealership to point out the problem. (Your purchase agreement specified that the seats were supposed to be leather.) If the dealer refuses to take the car back or agree to some other solution that you may suggest, such as an adjustment in price, consider formally “rejecting” the vehicle. Under state law, you can reject goods that do not conform to the contract if you do so immediately. You may want to hire a lawyer to write a proper letter of rejection. You should not exercise ownership over the car after you have formally rejected it.

Problem #2:
Three blocks from the dealership, on your way home, the car dies. The dealer tows the car back, and notes that a major problem has developed which needs to be fixed.

Solution:
Consider “rejecting” the car, as explained in Problem #1. If it is a new car, you might want to contact the regional office of the manufacturer. (Consult your owner’s manual for this information.) Sometimes manufacturers’ representatives can help to resolve problems quickly by offering replacement vehicles. If it is a used car, you may want to have it towed to an official inspection station to obtain a “rejection sticker.” Cars that will not run automatically fail inspection because they are unable to pass the safety and emissions test. This can be especially helpful if you purchased the car from a private seller, who has no repair responsibilities (see page 53).

There is no three-day right to cancel a car contract for any reason. You need other grounds to cancel.

Most car purchasers will not experience immediate problems. To be prepared for any trouble you may have with the car later:

Read the warranty and any additional service contracts you may have purchased so you understand any steps you must take to keep those protections in place or to get warranty service;
Read the owner’s manual to determine what routine maintenance procedures you must follow;
Put your purchase contract, finance documents, owner’s manual and all warranties in a safe place.

Remember, you must get your car inspected by an official inspection station. For your own protection, arrange for the inspection yourself; do not let the seller do it. Have the vehicle inspected within 7 days of purchase.

The next sections will explain the steps you can take if your newly purchased car turns out to be a “lemon.”

Lemon Aid Law
If you have problems with your car soon after purchasing it from a dealer or a private party the state Lemon Aid Law (Massachusetts General Laws Chapter 90, section 7N), could be a lifesaver.

The law allows you to demand your money back if the car fails inspection within 7 days of purchase and repairs necessary to make it pass are estimated to cost more than 10% of the purchase price, REGARDLESS OF WHETHER THERE IS ANY WARRANTY OR THE SELLER HAS PUT “AS IS” ON THE BILL OF SALE.

The time periods and other requirements of this law are very strict. Do not miss a deadline or you could miss out on a refund.

To get a refund under the Lemon Aid Law:

The vehicle must receive a rejection sticker within seven (7) calendar days of purchase. Note that this law requires you to have the vehicle inspected within 7 calendar days of purchase to claim any rights under the lemon aid law — but another state law requires you to have the vehicle inspected within 7 calendar days of the date of first “registration” — which may be the 7th day following the purchase. Protect your rights and have the vehicle inspected within 7 days of the purchase date.
You must get a written statement from the garage showing the date the car was rejected, why it failed, what repairs are necessary (remember, only inspection–related defects count) and how much they would cost (it must be more than 10% of the purchase price to return the car for a refund);
The statement must be signed by the inspector;
You must physically return the vehicle to the seller within 14 calendar days of purchase, along with a copy of the statement from the inspection station and a letter from you demanding your money back under this law.

If the car is rejected because of body problems but the inspection station does not do body work, get a statement documenting that the car failed and why, and a separate estimate from a body shop showing what it would cost to fix the problem.

Take a friend or relative along as a witness when you return the vehicle. (You will need a ride home, anyway.)

If the seller refuses to take the car back, both you and your witness should go to a notary (you can find one at a bank, city or town hall, or insurance agency) and sign a statement indicating that on that date you attempted to return it, but the seller refused. Whether you leave the car on the seller’s land is your decision. Remember, the car remains legally your property, and you will be responsible for any damage to it. Do not drive the car with the rejection sticker except to get it home or to a repair shop.

There is no specific time limit for the seller to give your money back. If a car dealer refuses to make reasonable arrangements for a refund, you can file a complaint with the consumer agency in your area, or you can sue the seller, regardless of whether it is a dealer or a private party. Small Claims Court handles disputes up to $2000; if the purchase price was more, you should consult with an attorney.

You cannot force the seller to repair the car under the Lemon Aid Law, but you and the seller can come to an agreement concerning repairs, if you choose. In most cases, it is better to cancel the deal if the car is defective soon after purchase. Get any agreement you make in WRITING.

A free fact sheet about the Lemon Aid Law can be obtained from the state Office of Consumer Affairs (see Appendix A-7).

How to Revoke Acceptance
If a new car develops problems after purchase, you probably will not be able to get an immediate refund or replacement. Under state law, a buyer can “revoke acceptance” of any product if defects are discovered that cause it to be “substantially impaired.” However, this is a difficult argument for consumers to make without the assistance of an attorney. Contact a lawyer if your problem does not fit under one of the specific auto lemon laws and you want to “revoke acceptance” under this general legal principle.

New Car Lemon Law
Consumers who have serious problems with new cars they purchase or lease from Massachusetts dealers may be protected by the New Car Lemon Law (Massachusetts General Laws Chapter 90, section 7N-1/2). The law provides that:

A consumer can demand a refund or replacement by the manufacturer if the vehicle has a defect which substantially impairs its use, market value or safety and which has not been repaired after a reasonable number of attempts during the “protection” period.

Auto homes, off-road vehicles, and vehicles used primarily for business purposes are not covered by this law, but motorcycles are.

All of the required repair attempts (except the “last chance”) must occur during the first year or 15,000 miles from the date of delivery. For demonstrators, the time begins when they are first put into service, not when consumers buy them.

Be sure to get a copy of the repair order each time you bring your car for service, even if it is under warranty, and even if the problem is only checked and no repairs are actually made.

After you have given the dealer a “reasonable” number of repair attempts, the manufacturer has a “last chance” to fix the car.

To notify the manufacturer, send a letter by certified mail, return receipt requested. Give a history of there pairs, explain what still needs to be fixed, and state that you are giving the manufacturer one last chance to fix the car.

The manufacturer has 7 business days from receiving your notice to make the last chance repair.

If the final repair is unsuccessful or the manufacturer fails to make it, you can file for state certified arbitration up to 18 months after purchase.

How do you know if the problems with your car are “substantial defects” covered under the New Car Lemon Law?

Obviously, if the car will not start, its use is substantially impaired. But other types of problems, such as intermittent stalling, may be considered to substantially impair a vehicle’s use or safety. To show substantial impairment of market value, the defect(s) must reduce the current resale price by at least 10%, or the cost of repairing the defect(s) must be estimated to be at least 10% of the current value.

If you have given the manufacturer and dealer the required number of chances to fix the vehicle and it is still defective, your car enters “lemonhood” and you are entitled to a refund or replacement. Notify the manufacturer in writing that this is the case.

You can always demand a refund if you meet the law’s requirements, but you cannot demand a replacement. If you request a replacement, many manufacturers will agree.

Your refund should include sales tax, finance and Registry charges, rental expenses and towing, but costs such as attorney’s fees and consequential damages are not reimbursable. There will also be a deduction for the number of miles you put on the car. To calculate the deduction, divide the original purchase price by 100,000 and multiply the resulting figure by the number of miles you have put on the car. For leased vehicles, divide the amount of payments made under the lease to date by 100,000, and multiply the resulting figure by the number of miles you have put on the car.

If you are offered a replacement car instead of a refund, there is no mileage deduction unless you agree to one as part of a settlement with the manufacturer.

If the manufacturer refuses to buy back a car that you believe has met the requirements of the lemon law, you can request state-certified arbitration through the Office of Consumer Affairs. As of the date of publication CAR SMART, there is no charge for arbitration.

Arbitration requests must be received by the Office of Consumer Affairs within18 months of delivery of the car.

For more details about the New Car Lemon Law and the arbitration process, you can obtain a free pamphlet from the Office of Consumer Affairs (see Appendix A-7).

Other New Car Lemon Remedies
Manufacturer-Sponsored Arbitration
Some manufacturers, such as Ford Motor Company, have their own arbitration programs. While these programs do not apply the standards of the Massachusetts Lemon Law, they can be helpful, especially if your problem does not fit under the lemon law criteria. Typically, complaints are heard by a neutral hearing officer or a panel, and the manufacturer is required to comply with any decision made in the 48 consumer’s favor. Also some manufacturers participate in the Better Business Bureau’s Auto Line program. Call 1-800- 955-5100 to determine if your car is eligible.

Manufacturers’ Warranties and Extended Service Plans
Defects may be covered by the manufacturer’s warranty or an extended service contract that you purchased. Read the terms of the plan carefully. Most warranties and service contracts require consumers to contact a specific office for authorization before any repairs are made. If the manufacturer or warranty company says that the problem is not covered, ask why.

The dealer or manufacturer may disagree with you about whether a problem does in fact exist. In that case, get a “second opinion” from a competent, independent mechanic. If you have an extended service contract, the warranty company may require you to pay to have the problem diagnosed by a repair shop before a decision is made as to whether the problem will be covered.

Consumers generally do not know enough about cars to argue about what repairs are necessary or if they fit within the terms of the warranties or service agreements. A trusted, reputable mechanic may be able to translate “car talk” into plain language and give you the information you need to successfully make your case.

Secret Warranties
Manufacturers will sometimes repair defects that are not covered by warranties, or defects that occur after the normal warranty periods have expired, on the basis of goodwill. In some cases manufacturers have “secret warranties” that only dealers know about under which they will cover specific problems without publicly acknowledging that the problems exist or issuing a formal recall.

If you have a problem that you feel is unusual given the mileage and maintenance record of the car, check with a local dealer to see if there are any technical bulletins or internal memos regarding the problem. Even if there are not, ask if the dealer is willing to contact the manufacturer on your behalf. Dealers can be good allies if they agree that the problems should be covered by the manufacturer. If you are turned down by a dealer, you can contact the manufacturer directly to try to change the decision.

Are You the Only Person with This Problem?
Sometimes it helps to have information to prove that you did not cause the problem with the car and that other owners are having the same difficulties. Where can you get this documentation?

The Center for Auto Safety, a non-profit consumer advocacy group, tracks secret warranties and patterns of car defects. Send the Center a letter describing the problem with your car (including the year, make, model, vehicle identification number, mileage, and a specific description of the defect), along with a self-addressed, stamped businesssized envelope. The Center will send you free advice and a list of reports and information packets that are available. There are small fees for the materials (see resource listing in Appendix A-7).

Recalls
The National Highway Traffic Safety Administration (NHTSA), a federal agency, can tell you if there has been a recall or service bulletin on your car, filed by the manufacturer. Contact NHTSA to find out about pending investigations, crash test results, and rating of new tires. There is no charge for this information. You can also give NHTSA information about your own problem. Although the agency does not contact manufacturers about individual complaints, it does track complaints. If there are complaints from other people about the same car problem, you can get a detailed printout by calling NHTSA at 1-888-327-4236 or through the web site: www.nhtsa.dot.gov.

Leased Car Lemons
Under the federal Consumer Leasing Act, lessors are required to disclose in writing whether the standard warranties are available from the manufacturer or whether warranties are provided by the leasing company. The manufacturers’ warranties usually apply to new leased cars, but the coverage, requirements, and length of coverage may vary. Be sure to ask about this before you lease.

I’ll See You in Court
If problems with a new car you purchased or leased are not resolved through your own efforts, mediation or arbitration, you can always sue to try to get your money back or for reimbursement for repairs. In some cases, it may make sense to sue both the manufacturer and the dealer or lessor.

Small Claims Court currently handles disputes up to $2000, and does not require using an attorney. For a pamphlet about Small Claims Court, contact the Attorney General’s Consumer Complaint & Information Section, or Office of Consumer Affairs (listed at the end of this booklet). For problems involving larger amounts of money, you will need an attorney. You can get names from your local bar association or the Massachusetts Bar Association Lawyer Referral Service: 1-800-392-6164.

The Center for Auto Safety may be able to provide you with information about class-action suits where you can join with other consumers experiencing the same problem.

Used Vehicle Warranty Law
Under the Used Vehicle Warranty Law (Massachusetts General Laws Chapter 90, section 7N-1/4) consumers who buy used cars from Massachusetts dealers that cost $700 or more and which have less than 125,000 miles on the odometer must be given specific warranties. You should be aware that the Used Vehicle Warranty Law does not apply to the leasing of a used car.

This law does not cover motorcycles, mopeds, dirtbikes, auto homes, offroad vehicles, and leased cars.

During the warranty period, the dealer is responsible for the full cost of parts and labor for any defect(s) that impairs the use or safety of the car. However, the warranty may provide that the consumer will pay a TOTAL of no more than $100 for covered repairs during that period. The specific amount, if any, must be written in the warranty.

This $100 maximum “deductible” is not “per repair” but is the total that the consumer can be asked to pay during the warranty coverage period.

If the dealer fails to give you a copy of the correct warranty at the time of purchase, you are still covered and the warranty period does not begin to run until you are given the proper warranty document.

The law requires the dealer to refund your purchase price if after a reasonable number of repair attempts for covered defects during the warranty period, the vehicle still has problems that impair its use or safety.

Unlike the New Car Lemon Law, defects do not have to be “substantial.” The Used Vehicle Warranty Law covers only use or safety defects and not problems that affect the vehicle’s value. Be sure to get a copy of your repair order each time you bring the car in, even if a problem is only checked and no work is done. You may need it later to prove you gave the dealer a reasonable number of chances to fix your car.

You must keep an accurate record of the number of days your vehicle was in the shop, and the date your warranty expires. Not all days in the shop count against the dealer; there are some “grace periods” while waiting for parts. Your warranty is automatically extended by the number of days in the shop.

If you have given the dealer a reasonable number of repair attempts during the warranty period, and your car still has a problem that affects its use or safety, you are entitled to your money back. Your refund includes some costs and excludes others:

In addition, there is a flat 15 cents per mile deduction for every mile put on the car from the day of delivery.

Even if your used car has not yet met the requirements for “lemonhood,” the dealer has the right to buy it back, rather than making the repairs.

If your car meets the requirements of the Used Vehicle Warranty Law, write to the dealer demanding a refund under this law.

State-Certified Used Car Arbitration
If the dealer refuses to refund your money, you can apply for an arbitration hearing through the Office of Consumer Affairs within six months of taking delivery of the car. As of the date of publication of CAR SMART, there is no charge for arbitration.

IMPORTANT CAUTION:
Unfortunately, while the majority of car dealers abide by the terms of the law, not all do. Some consumers who have won their arbitrations have found that the dealer still refuses to make the required refunds. In these cases, the consumers may have to sue to try to get their money.

Consumers do not have to go through arbitration first. They always have the option of suing, either instead of arbitration, or if they are not satisfied with the arbitrator’s decisions.

Private Party Sales Under the Used Vehicle Warranty Law
The Used Vehicle Warranty Law contains a special provision for private sales. There are no required warranties, or minimum price or maximum mileage restrictions. The law gives buyers the right to demand refunds if they discover defects that impair the safety or substantially impair the use of their cars within 30 days of the sale. However, a buyer has the difficult burden of proving that the seller knew about the defects and failed to disclose them at the time of purchase.

It is always a good idea to find out where the seller had the car serviced when you buy it — that way you may be able to determine if the seller was made aware of any problems previously.

Remember, if you buy a car from a private party the seller has no liability for repairs. However, even if the private party sells the car “as is,” you may still be covered under the Lemon Aid Law or this provision of the Used Vehicle Warranty Law.

For more details about the Used Vehicle Warranty Law, you can get a free pamphlet from the Office of Consumer Affairs (see Appendix A-7).

Implied Warranties
Another law, the “implied warranty of merchantability,” applies when you buy or lease a car from a dealer. Regardless of the sale or lease price or the amount of mileage at the time of sale, you can argue that the car should function for its intended purpose for a reasonable period of time — or the dealer has to make it right.

If you buy or lease a used car from a dealer and the engine seizes within a few days, you may be able to require the seller to repair it or refund your money. How long your implied warranty rights last depends on your specific situation: how much you paid for the car, how old it is, how many miles are on it, how serious the problem is, and how soon the problem became apparent. Courts interpret the law on a case-by-case basis. Generally, however, it is not unreasonable to argue that any car should function properly for at least 30 days.

Dealers cannot sell or lease a car “AS IS,” no matter how much the car costs or how many miles are on it.

Problems with the Odometer Reading
Sometimes after consumers buy cars, they suspect that the mileage on the odometer may not be correct. If the odometer is not working properly, or if the car seems to need repairs prematurely, or if old paperwork is discovered with higher odometer readings, these may be indications that the odometer has been “spun” or reset, or was disconnected for a while.

How can you tell if the mileage is incorrect? It may not be easy. Ask your mechanic to look for signs of tampering. You can also pay a small fee for a title search through the Registry of Motor Vehicles, which will provide you with copies of past titles. If after doing this detective work you believe that the mileage is wrong, what can you do about it?

Odometer tampering is a violation of both state and federal law. If you can prove that the seller spun or reset the odometer, you can sue for $1500 or three times the amount of your damages, whichever is greater, along with court costs and attorney fees. There are also criminal penalties for odometer tampering.

You should report evidence of possible odometer tampering by car dealers to the Attorney General’s Office. That agency does not handle complaints regarding private sales. And unless you can document through paperwork or other evidence who tampered with the odometer it may be difficult to win an individual lawsuit to recover damages under the state odometer tampering law.

There is another legal theory that you can try to use to resolve odometer problems. A car seller must certify that the mileage is correct or that the true mileage is unknown.

If the mileage has been certified as correct and it turns out to be wrong, the consumer can argue that the seller created an “express warranty” about the number of miles on the car. Under general warranty law, sellers must stand behind any guarantees they make and are liable to consumers for damages if they do not.

Therefore the buyer can attempt to return the car for a refund or obtain an adjustment in the price based on the argument that the incorrect mileage is a breach of the seller’s express warranty and that the fact that the car has more mileage substantially impairs the car’s value.

How to Undo the Deal
When the seller agrees (or is ordered by an arbitrator or a court) to buy back the car under the Lemon Aid Law, the Used Vehicle Warranty Law, the New Car Lemon Law, or any other statute, how do you undo the deal?

If the car has not been registered yet, it is simple — you return the vehicle to the seller and get the amount of refund provided under the law, or an amount you agree to. If there is a previous title and it has already been signed over to you, you will have to return the title to the seller with a notarized statement including the date, the vehicle year, make, model, identification number, mileage, names and addresses of the buyer and seller, and an explanation that the purchase has been canceled. You should also contact the lender immediately to stop any loan that is being processed.

Once the car has been registered, its return is more complicated. If it is a new car and the deal is being canceled within a few days of purchase, you can withdraw the application for title by calling the Title Division of the Registry of Motor Vehicles at 617-351-9000.

For used cars, or new cars that are returned after more time has elapsed, you can speed up the process of getting the new title by calling the Registry at the number above. Once the new title is sent to you (or the lender), you sign it over to the seller. If you have obtained a loan to pay for the car, contact the lender to coordinate the exchange of title and the pay-off.

Do not forget to cancel the insurance. If you plan to purchase another car right away, you can leave the registration in effect and transfer it to the next car. If there is going to be a delay, or if someone else wants to buy and register the car you have returned, you should cancel the registration at the local Registry office.

Under the New Car Lemon Law and the Used Vehicle Warranty Law, your refund includes registration and title fees. The New Car Lemon Law also entitles you to a refund of your sales tax. Under the Lemon Aid Law the seller or manufacturer is not required to refund these costs.

You can apply for a partial refund of your registration fee through the local Registry office. The Registry also has the forms for applying for the return of your sales tax from the Department of Revenue. Follow the directions on the forms carefully, and remember that there is a 180-day time limit.

IMPORTANT NOTE:
If you are returning a car under the Used Vehicle Warranty Law and the seller deducts from the purchase price for mileage, you cannot get your sales tax back. Sales tax is only returned by the state when the full payment is refunded. Since the law does not require the dealer to refund the sales tax, you may lose the sales tax in that instance.