Arkansas Lemon Laws for Used Cars: What To Know
Photo by Estúdio Bloom on Unsplash
When you’ve just made one of the biggest purchases of your life, the last thing you want is to find out is that you’ve bought a big hunk of junk. Luckily, there are protections for consumers who have been sold lemon cars.
Every state has different Lemon Laws, and luckily Arkansas has some of the most consumer-friendly ones in place since The Arkansas New Motor Vehicle Quality Assurance Act, Act 297 of 1993 was passed. We’ll help walk you through what makes a car eligible for these protections and what your next steps are if it turns out your new car is a lemon.
Which Cars Are Eligible?
Most manufacturer’s new car warranties last only 12 months or 12,000 miles, whichever comes first. But Arkansas’s lemon laws protect new car owners for the first 24 months or 24,000 miles, whichever comes last.
The protection covers new cars under 10,000 pounds, but does not include mobile homes under that weight, except for the engine. This coverage is also transferred from the original owner to any subsequent owners as long as the car is still under the age or mileage restrictions.
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What counts as a lemon?
Arkansas lemon laws don’t help you just because you’re feeling a little bit of buyer’s remorse; you have to prove that the car has a problem that either poses a serious threat to the health of the driver, passengers, fellow motorists, and pedestrians if driven.
You also have to first attempt to have the car repaired to fix the grave problem. You should also report the problem to the manufacturer as soon as you notice it, then keep a detailed record when you take the car in to get repaired.
A problem so big that it risks the driver’s safety will almost certainly be covered by a new car warranty, so the first attempt shouldn’t cost you anything out of pocket; but if the problem comes up after the warranty has expired you will be on the hook for the costs.
If the problem can be fixed in one go, then your car won’t be considered a lemon and you can safely continue driving your new car. But if that first repair attempt doesn’t fix the problem, you must inform the manufacturer by certified mail that a fix was attempted but failed.
The manufacturer then has one last chance to fix it (they must take your car in for repair within 10 days, and have it repaired 10 days after they receive it) or else you are owed a full refund for the car (minus some money dependent on how much the car has been driven) or a replacement car.
If you had to pay for the initial repair attempt yourself because it wasn’t covered by the warranty, you may be reimbursed for that as well once your car is deemed a lemon.
If the defect isn’t life threatening, the requirements will be different. Your car still might be a lemon if it has a defect that substantially impairs the use of your vehicle (won’t start or move) or its market value.
If that is the case, the consumer must first make three attempts to remedy the problem. You should keep records of the repairs made and ask for a detailed report to prove that you did make efforts to repair the defect. After those three attempts, if the defect is still not fixed, you have to notify the manufacturer by certified mail (that way you can confirm the mail has been received) and they have one last opportunity to fix the problem.
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Once they receive that mail, they have the same 10 days to receive your car at a reasonably accessible repair facility, and they have 10 days to either fix the problem or call it a loss. If they can’t fix it, you are owed the refund on your car or replacement car within 40 days. And like the first case, if you had to pay for the repairs yourself, you are entitled to reimbursement for those repairs if your car is a lemon.
There are two more ways that your vehicle can be considered a lemon by the state of Arkansas: if the car has been out of service due to repairs for a total of 30 days, or there have been five failed attempts to remedy multiple problems that significantly impair the use of the car.
If one of these two conditions are met, then you do not need to offer the manufacturer a final opportunity to fix the defects. In that case, you can go straight to demanding a refund or replacement from the manufacturer.
Demanding a Refund or Replacement
You should write down and keep a copy of a letter to the manufacturer explaining why your car is a lemon and why you are owed compensation for the faulty vehicle. This letter should include the times the car was taken in for repair, how long it was there, and what problems it was there to resolve.
The letter should be sent to both the manufacturer and to an Independent Dispute Settlement Program (IDSP). Arkansas lemon laws require you to first go through private arbitration with an IDSP to determine if your car truly is a lemon and you are entitled to compensation. Different manufacturers can use different IDSPs, but they are all handled by either the National Center for Dispute Settlement or the Better Business Bureau Auto Line.
To see which IDSP you need to contact for your vehicle, their address, and the address of the manufacturer, check this guide from the Attorney General of Arkansas.
Once the manufacturer and the IDSP have received your demand, they have 40 days to hear the case for your refund or replacement in independent arbitration, where you can either represent your own case or hire an attorney. If you are granted compensation by the IDSP, you have 30 days to accept the decision and you will soon be given the refund or replacement for your vehicle.
If the IDSP decides your car is not a lemon but you disagree, you can file a lawsuit to assert your rights under Arkansas’s lemon laws.
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Your Refund or Replacement
If your car is determined to be a lemon, you can choose whether you will be compensated with a monetary refund, or a replacement vehicle. Whichever you choose, you will have to pay a reasonable allowance for vehicle use. This is determined by how many miles you had driven the car before you first had to take it in for repairs for the impairing defect.
The formula for the reasonable allowance you must pay (if you have the car replaced) or that will be deducted from your refund is: the original purchase price (OPP) times the mileage when it is brought in for repair (M), divided by 120,000. That is OPP x M ÷ 120,000.
Beyond that reasonable allowance, if you choose the refund, you are owed the dull purchase price, sales tax, registration fees, repairs not covered by warranty, and any rental cars needed while the car was being repaired.
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