Written by attorney Brett Shainfeld

Lemon Law: Service Contracts- it's now or never!

Service Contracts- it is now or never!

Buying a new or used vehicle, whether it is a car, truck, van, motorcycle, RV or ATV is an exhilarating experience. We get caught up in the emotion and excitement of making this purchase. In the midst of choosing from colors, options, and accessories, the dealership will offer the option of an service contract. While this may seem like another way the dealer can make a quick buck, there is much more to it than that, and something that should be given careful consideration.

Often times when purchasing a car we think:

“I am only going to have it for a short time."

“This car comes with a dealer/manufacturer warranty, which will cover any problems."

“This is a reliable brand, nothing will go wrong."

While these thoughts are common, they do not take into account the real reality of owning a carand the problems a person can experience. For example a Ford Fusion, comes with a 3 year/36,000 mile warranty, a BMW 335i comes with a 4 year/50,000 mile warranty, and a GMC Yukon comes with a 3 year/36,000 mile warranty. If with each of these vehicles, the first problem occurs 1 day after/1 mile after the manufacturer’s warranty, we are going to come out of pocket for each and every repair. If this problem persists and cannot be repaired, we will continue to pay to repair it each time with no recourse against the manufacturer or dealership for selling this “lemon." This type of problem is governed by the Magnusson-Moss Warranty Act, commonly referred to as the Federal Lemon Law, which compliments ** California lemon law**, as well as purchases lemon law across the country.

Section 2308 of Magnusson-Moss provides that no supplier (dealer or manufacturer) of a service contract may waive any implied warranties (warranties created by law) if at the time of the sale or within 90 days, the consumer enters into a service contract for the vehicle. This means that by entering into the service contract the dealer and manufacturer are creating a promise that the vehicle will be fixed within a reasonable number of attempts, even if the warranty has expired.

This lemon law allows us to have legal recourse for a vehicle which only started manifesting problems after the dealer or manufacturer’s warranty expired. Without this service contract purchased within 90 days of sale of the vehicle, we are without any recourse against the dealership or manufacturer, or as my pappy used to say, “up a creek without a paddle."

We should not think short-term when buying a vehicle, but rather think long and hard about our rights in the long-term. There is nothing worse than having a vehicle that is a lemon, but we are not protected under state lemon law or federal lemon law because we chose to save the extra few dollars and forego the service contract.

Finally, it should be noted that often times purchasing a service contract with a new vehicle is much cheaper than purchasing it a later stage, and that should we sell the vehicle or get rid of it by other means, such as a lemon law claim, we are entitled to the receive back the pro-rated portion of the service contract.

When purchasing a vehicle to get legal protection that extends beyond the manufacturer or dealer warranty, buy the service contract at the time of sale.

If we purchased a new or used car, with or without a service contract, and are experiencing multiple repairs for the same or similar issue, you may have rights under state lemon law and federal law. To find out exactly what can be done, contact a lemon law specialist today, like the lemon law attorneys at Shainfeld & Anvar, or visit them at .

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