Get a mechanic to declare that the car cannot be repaired to the standard of a new car with a replacement engine and perhaps you can win on this. Negotiate with them for longer and free warranties if not, as one possibility. You really can't understand why they wont take a car back that they can't resell as new?
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They won't give you a new car because they already have your money from the last one and they don't make any money from just replacing it for free; in fact, they will lose money. The lemon laws in each state what is a lemon in that state, and it is up to the owner to prove it if the manufacturer or dealer won't agree. New Jersey has both a new car lemon law and a used car lemon law so which one applies will depend on if you bought it new or used. The definitions are different under each law so your best bet is to find a lemon lawyer near you and find our for sure what law applies and how it will work. Look for one under the find a lawyer tab at Avvo or call your local attorney bar association and ask for a referral. Or you can go to Naca.net, the only national organization of consumer law lawyers, and check under the find a lawyer tab for one near you.
This answer is for general purposes only and does not establish an attorney-client relationship. The law in your state may differ and your best answer will always come from a local attorney that you meet with privately. For a Free Online 50 State National List of Consumer Law Lawyers, click on this link (http://tinyurl.com/79ku5jx) and find one near you
The NJ Dept of Consumer Affairs has a pretty good pamphlet on topic, I've attached it here.
Essentially, if your new car has less than 24,000 miles on it and experiences a repeating issue 3 or more times that can be fixed OR is in the shop more than 20 days for any reason, it might be a lemon. There are always proof issues and you have some procedural hurdles to deal with (is the issue one that "subtantially impairs the safety/value/use& enjoyment" of the vehicle is a big one) and notice requirements. You can go directly to the Dept of consumer Affairs OR hire an attorney.
In your case, if they fixed the engine and you're happy, there are still issues with the value of the vehicle-as-repaired vs the vehicle as if new that could be actionable.
NJ lemon law cases will garner successful plaintiffs attorneys fees/costs plus the full value of the car (less a carve-out for use depreciation)
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