Getting to Know Indiana’s Lemon Law
In Indiana, the "lemon law" comprises two primary statutes: the Motor Vehicle Protection Act (MVPA) and the New Vehicle Tax Refund Act (NVTRA). Both laws provide relief to consumers who purchase faulty vehicles that fail to perform as expected. Generally, these laws apply to new motor vehicles, motorcycles, all-purpose vehicles, and trucks that are bought or leased by individuals for purposes other than resale, subleasing or business.
The MVPA provides protection when a vehicle does not conform to its warranties after being presented to an authorized dealer three or more times for the same defect, or when a vehicle is out of service for repair for 30 or more days. A vehicle is also presumed to be a lemon if it has a nonconformity that the manufacturer has not repaired after four attempts. A nonconformity is a defect in a vehicle’s materials or workmanship that does not conform to the vehicle’s written warranty. Notably, even if none of these presumptions apply, a consumer may still bring a claim under the MVPA if the vehicle has a nonconformity and the only way to repair the nonconformity is to replace the entire part .
In addition, a manufacturer must repair a vehicle free of charge if the consumer presents it to an authorized dealer within the period or mileage limit of the written warranty. If the manufacturer makes the repairs, but the defect or nonconformity continues to exist, the consumer may be entitled to a refund of the price of the vehicle. The price of the vehicle includes all other costs incurred by the consumer for title, license, and sales taxes. The MVPA also provides a means for a consumer to demand a refund of the taxes incurred by the consumer for the motor vehicle.
The NVTRA allows a consumer to offset the tax imposed on leasing a new vehicle against the consumer’s federal income tax. To be eligible for this benefit, however, a consumer must make the claim when filing for the return of any overpayment of a federal income tax. The NVTRA specifically contemplates the eligibility of those who have already paid tax on the full price of a leased motor vehicle.
Lemon Law Claim Qualifications
Eligibility for a Lemon Law Claim
In order to be eligible to file a lemon law claim in Indiana, the vehicle must meet certain criteria established by the Indiana Code and the Federal Magnuson-Moss Warranty Act.
As a preliminary matter, the vehicle must be purchased or leased within your eligibility under the Indiana Lemon Law. If you purchase a vehicle out of state, it is still protected. The eligibility requirements below will apply.
If you filed a claim under a warranty or additional inducement agreement the terms of your warranty/inducement agreement will apply.
The Lemon Law covers new vehicles with a purchase price less than $60,000.00. Used vehicles may be covered under the Magnusson-Moss Warrant Act.
A "motor vehicle" as defined under Indiana Lemon Law includes:
- Cars
- Pick-ups
- Vans
- Trucks
- SUVs
- Mopeds
- Motorcycles
All of the above must be sold or leased, except the moped. If you bought an ATV it is not protected.
The Lemon Law does not cover motorcycles.
An item on your vehicle that requires repair is considered a defect under the Indiana Lemon Law if the defect was:
- Substantial in nature
- Covered under warranty
- Reasonable repair attempts did not result in reasonable use and enjoyment.
- The repair attempts did not correct the defect.
Coverage is limited to the first 24 months/24,000 miles after you take the vehicle home, whichever occurs first. Older vehicles are covered under the Magnusson-Moss Warranty Act.
Tips for Filing a Lemon Law Claim in Indiana
If, after exhausting the dealership and manufacturer’s warranty process, you still have not received a satisfactory repair and/or replacement of your defective vehicle, you have the right to file a claim. The famed "Lemon Law" provides a simple process for such claims.
Step 1: Compile and Organize Documentation
To make the process more efficient for you and your attorney, start maintaining your proof of repairs and other records. These documents will help resolve the matter more quickly and be more convincing than your word alone.
Be sure to save your records for the following:
Step 2: Contact your attorney prior to taking other action
While you have the right to file a claim directly with the manufacturer, you may want to seek legal representation before proceeding with that action. An attorney who is experienced in lemon law cases will know how to best proceed with your claim. They will be able to present much more persuasive case than most individuals could, which could help to speed up the process.
Another benefit of hiring an attorney is that they can offer detailed guidance on how to complete the lemon law forms. They can also write any necessary letters to the manufacturer to aid in your cause. A letter from an attorney to the manufacturer makes a more powerful statement than one written by an individual. Attorneys can also communicate on your behalf with the manufacturer to negotiate better terms.
Step 3: Complete Forms & File with Consumer Complaint Center
Working with your attorney, you can complete the necessary forms to file your lemon law claim:
After you complete these forms, you must send them to the Indiana Consumer Complaint Center. It will assign your case an ID number, which the state will use when confirming it received your paperwork.
Step 4: Letter from Indiana Division of Consumer Protection
The Indiana Division of Consumer Protection will notify the manufacturer of your claim. The manufacturer has 15 days to respond. If they repair the problem to Indianapolis Division of Consumer Protection’s satisfaction, your claim will be closed. If, however, you’re not satisfied with the response, the Division will assign your case to an investigator. The investigation process can take a number of months.
Once the investigation closes, if the Indianapolis Division of Consumer Protection reaches a favorable settlement, it will close your case. However, if the settlement is at all unfavorable or you and your attorney are not satisfied, you can take the next step.
Step 5: Alternative Dispute Resolution Hearing
The State of Indiana Office of the Attorney General provides for an Alternative Dispute Resolution Hearing as a way for you and the manufacturer to negotiate your lemon law claim. You will complete the following form to initiate the ADR process:
After completing this form, arrange for two copies of it to be mailed to the following address:
Also mail a copy of the form to the manufacturer. The manufacturer will have 30 days to respond and negotiate your claim. If you are not satisfied with their response, you can either see if a settlement can be reached or head to the courts.
The alternate course of action is to file a lawsuit for damages for economic loss and breach of warranty. Again this is where your attorney will prove invaluable. They’ll be able to help you choose the proper venue, understand deadlines, and present an iron-clad case for your lemon law claim.
Legal Process and Resolution
Following the filing of a Lemon Law claim, an automaker will be given a period of time in which to resolve the matter. This typically does not take more than five days. The automaker has the option of completing a refund of the purchase, replacing the defective vehicle, or attempting to repair the vehicle again. If bad faith is involved, the process may move faster.
Failure to properly or promptly handle the situation may result in a suit on the automaker, which can be done by the customer. A customer can also choose to seek arbitration should they feel that it is necessary. Arbitration may be an option for moving a case to resolution quicker. This process does not involve going to court, so automakers and customers may find it a good option for resolving matters.
In Indiana, arbitration is possible through the state attorney general. This is a free service that will mediate between a customer and an automaker. It is not binding, though, so if the customer or automaker does not believe that it is a fair resolution, then courts will have to be utilized.
The Four Seasons Executive Court Resort and an Indiana statute for claims between $8,000 and $10,000 (now occurs in civil courts) are the two previous options used in Indiana for Lemon Law arbitration. These options are no longer available. Therefore, an Indiana Lemon Law attorney may be needed for parties not agreeing on the repair, replacement, or refund.
A Lemon Law attorney will understand how to file a suit on behalf of a customer. There are exceptions to the time frame, but a suit must be filed within four years of the refusal of the automaker to resolve the issue.
Common Pitfalls
One common pitfall consumers face is ignoring their state’s wrinkle presumption until the end of a repair trip or the expiration of the state’s lemon law time limit. While it is required that the repair attempt have an out-of-service time during the trip, Indiana doesn’t specify what type of out-of-service time is sufficient. However, we don’t see how a consumer will have any chance of winning a case making a Lemon Law claim in Indiana if it turns out the repair trip’s out-of-service time was insufficient and the vehicle is later repaired, because the consumer will forever have to prove the warranty defect was present during the failed repair trip.
You should keep records and make dealer notes during all trips. The notes should clearly track all out-of-service events in terms of time , and any failures or defects. Also, make sure to keep copies of the initial repair repair order in their vehicle file.
Another mistake Citrus Lemon Law clients frequently mention is failing to track their initial pre-repair objection with the dealer until the end of the final repair trip. Because the pre-repair notice will only list a warrantable defect, it should be tracked until the final repair trip. We stress this point as much as possible to our clients. Simply put, if a dealer acknowledges the consumer’s objection in writing, we think the written summary and resolution are a "best practice."
Seeking Legal Guidance
There are a number of advantages to having a lawyer represent you in a lemon law claim, Indiana or otherwise. Most importantly, the lemon law process is more challenging than it may seem to a layperson. There are multiple steps involved, and a failure to meet the requirements of each step could result in the loss of your entire claim.
A lawyer will not only be knowledgeable about the process, but will have resources at his or her disposal to investigate the facts of your case and build you a strong claim. For example, you may have concerns about whether the repair attempts on your vehicle were sufficient. A lawyer can look at the notes your dealership provided and make an assessment. A more complicated question would be whether your car has an "unknown" or "forest green" metallic paint color. In that event, an effective lawyer would have contacts with other lemon law attorneys, mechanics, body shop owners and members of the press who could help.
Remember, manufacturers don’t like having defective products returned to them and are not afraid to fight lemon law claims tooth-and-nail. In fact, they often hire attorneys who specialize in lemon law claims, spelling "lemon law" backwards to find them. As a consumer, you need to go into this battle with the best representation you can get. It pays for itself in the long run.
Lemon Law Concerns in Indiana FAQ
Consumers might have a few questions as they pursue their claim or consider the benefits of filing one. Here are a few answers to those questions.
1. What types of defects are covered under Indiana’s lemon law?
A lemon law warranty is that in a reasonable period of time after delivery to the consumer, the nonconformity has not been repaired. A "nonconformity" means a defect or malfunction or any component or system of a motor vehicle that: (A) substantially impairs the use, market value, or safety of a motor vehicle; and (B) is not of a nature that can be remedied by adjustments or repairs for the vehicle over which the manufacturer has no control.
2 . How long is the warranty for?
The warranty lasts for a period of 2 years from the date of original delivery of the vehicle to the consumer or the first 24,000 miles of operation of the vehicle, whichever event occurs first.
3. Do I have to hire a lawyer to pursue my legal claim?
No, but it is advisable to enlist the aid of a local law firm. In Indiana, damages caps are against a dealership and a manufacturer or their agent may be disqualified.
4. What if the vehicle is out of warranty and I am still having problems?
While the lemon law would not apply, it doesn’t mean you are out of luck. Speak with the manufacturer about your concerns, many manufacturers offer additional warranties beyond the new car warranty for situations like this.