Extended Warranty Lemon Law

April 19, 2010

The federal lemon law, the Magnuson-Moss Warranty Act, clearly states that a consumer can sue a “a supplier, warrantor or service contractor” to comply with ” any obligation…under a written warranty, implied warranty, or service contract.” 15 U.S.C. § 2310(d)(1). Based on this language, several courts have upheld the right of a consumer to file a lawsuit based on an unreasonable number of repair attempts paid for by an extended warranty.

Even though a consumer can sue, there are still several questions to answer. First, how long does a consumer have to file the lawsuit? Like for other federal lemon law cases, a consumer should have at least 4 years from the date of purchase of the extended warranty, though that date might be extended. How many repairs are unreasonable? Like the Missouri lemon law, four or more repairs is unreasonable, though fewer may also qualify as unreasonable.

The most interesting question is how much a consumer can recover. Many manufacturers and extended warranty companies try to claim that a consumer is limited to the purchase price of the extended wararnty. But that does not seem to be what the legislature intended, nor would it be fair to a consumer. Consider if a nonconformity with a vehicle resulted in the complete l0ss of use of the vehicle. Because the nonconformity would impair the use, value, or safety of the vehicle, not the extended warranty, a consumer should be able to recover the diminution of the value of vehicle itself.

Be sure to investigate the extended warranty company before paying money for their product.

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