Filing an Automotive Breach of Warranty Lawsuit

Warranty law is designed to protect consumers when their vehicle doesn’t live up to the promises made by a dealer or manufacturer. Whether you’re dealing with persistent repairs, misleading warranty terms, or delays, understanding your rights is the first step.

“The biggest challenge we face is educating the public that legal help is out there,” says Scott M. Cohen, a consumer lawyer who represents car owners in car warranty claims. “We can help people in these situations because most people are unaware that there are laws that will protect them in a situation where they buy a car or truck that has problems and can’t be fixed.”

Lemon laws and federal breach of warranty claims each provide different paths to recovery, but navigating either can be complicated. A consumer protection attorney can help you avoid missteps, document your case properly, and pursue the compensation you’re entitled to.

What Is a Car Warranty?

A vehicle warranty is a legally binding promise regarding the condition or performance of a vehicle. It could include terms that require the manufacturer or seller to repair, replace, or refund.

Several types of warranties provide different types of coverage.

Express Warranty

Express warranties are written or clearly stated promises by the manufacturer or dealer. They are typically found in sales contracts, owner’s manuals, and dealer advertising. They will list what the warranty covers, such as what’s covered, duration of coverage, and the repair/replacement process.

Implied Warranty

Implied warranties are automatic legal protections under state law, even if not written. There are two types:

• Implied warranty of merchantability. The vehicle is fit for ordinary use and cannot have serious mechanical defects at the time of sale.
• Implied warranty of fitness for a particular purpose. Applies when the seller recommends a vehicle for a buyer’s specific needs.

A manufacturer or dealer can add additional warranties. These are often called an extended warranty or third-party warranty. This is optional coverage purchased by the vehicle buyer. They typically go into effect when the original warranty expires. These warranties generally have stricter claims processes and limited scope.

The Magnuson-Moss Warranty Act (MMWA) requires warranties on consumer products to be clearly written and allows consumers to sue for breach of warranty. The Federal Trade Commission (FTC) enforces the MMWA. Each state has adopted rules governing commercial transactions. These standards are outlined in the Uniform Commercial Code (UCC). It covers express and implied warranties in vehicle sales.

What Is a Breach of Warranty?

A breach of warranty occurs when a product does not perform as promised under the terms of the covering warranty. This applies to both express warranties and implied warranties. A breach gives the consumer the right to pursue remedies such as repair, replacement, refund, or damages.

A court will analyze whether the facts meet the threshold of a breach of warranty coverage. Sometimes, it isn’t just a defective product; it needs to be more than that. It will also consider whether proper repair attempts were made within a reasonable time.

Understanding Your State’s Lemon Law

If the vehicle is relatively new, the owner may have a claim under their state’s lemon law. However, requirements can be stringent. For example, in Indiana, where Cohen practices:

• The vehicle must suffer substantial impairment to value, use, or safety
• That impairment is not repairable by the maker or dealer
• At least four repair attempts have been made — the first attempt being made within the first 18 months or 18,000 miles of the vehicle, or the vehicle is out of service a total of 30 days or more.

For vehicle owners who may not meet these requirements, a federal breach of warranty claim under the MMWA offers broader relief.

Differences in Breach of Warranty Claims vs. Lemon Law

Cohen says it’s easier to prove a claim under MMWA than under state lemon law. For example, the vehicle defect doesn’t have to be significant as the lemon law requires. However, the damages available under a breach of warranty may be less. The measure of damages under a breach of warranty claim will be the difference in the value of the goods as warranted versus the value of the goods as accepted. “Basically, the amount the consumer overpaid for the vehicle,” Cohen adds.

Other differences in breach of warranty claims include:

• The owner may still have a claim after selling the vehicle
• Subsequent purchasers may have a claim if they are still under warranty
• Lessees of vehicles can bring a claim for breach of warranty
• Owners have a much longer period of time to bring a breach of warranty claim

Steps To Take Before Filing a Lawsuit

If the vehicle is under warranty when a defect is discovered, the owner may be able to recover from the manufacturer. This may be possible even past the expiration of the warranty due to a four-year statute of limitations for these claims for consumer protection.

“If there is a failure of the warrantor to comply with an obligation of their warranty, you can bring a claim for damages,” Cohen says. “Many people do not realize that, let’s say, seven years into a 10-year warranty, the owner begins to have problems with the vehicle’s engine, and the manufacturer can’t fix it. Those people do have recourse. Unfortunately, many of these people don’t realize they can do something about it. They can find a lawyer to get them damages for the manufacturer’s failure to repair.”

What Can You Recover in a Breach of Warranty Case?

If you have a breach of warranty claim, the court’s goal is to make you whole from the loss you suffered due to that breach.

Consumers can file in small claims court for small value claims. They do not necessarily need an attorney in small claims court, since the process is simplified. If the claim amount is too high, the legal action must go through the civil court system in the correct jurisdiction. This process can be more complicated, so having a lawyer to advise can be helpful.

Remedies available for a breach of warranty lawsuit include repair costs, a refund for the purchase, diminished value reimbursement, or rescission of the contract. In addition to damages, some states allow for the recovery of attorney fees.

Some jurisdictions let consumers recover for the time they could not use the vehicle. This cold includes rental car costs or inconvenience damages. Other damages that could be available include towing expenses, missed work, or other costs related to the warranty issue (if allowed under law or contract. Punitive damages are possible in some jurisdictions but are less common in warranty issue claims.

Claimants for breach of warranty are often required to participate in arbitration, a manufacturer-funded informal dispute resolution process. This process is free to consumers, and the results are not binding on the vehicle owner. If the owner is dissatisfied with the result, the owner can still file a lawsuit in court. Cohen suggests contacting a law firm and asking for a free consultation with an attorney before the dispute resolution process.

Why You Should Consult a Lemon Law Attorney

Navigating a lemon law claim on your own can be overwhelming. A qualified consumer protection lawyer can clarify your rights, determine whether your situation meets the legal standard for a breach of warranty, and explain what kind of compensation you might be entitled to.

Use the Super Lawyers directory to connect with an experienced consumer law attorney who knows how to handle vehicle warranty claims.