Informal Arbitration: Lemon Law
Whenever a contract is broken, you can sue in court. So, if you buy a defective vehicle and the company can’t fix it, you may hire an attorney and sue the manufacturer or dealer (usually.)
But most people don’t want to sue a manufacturer over a defective car. They just want their money back, or a new car, or to have the car fixed.
The Nebraska Lemon Law provides a choice for most citizens: they can use either:
The Lemon Law is intended to resolve complaints involving chronic car problems. It allows the owner a refund or replacement when a new vehicle has a substantial problem that is not fixed within a reasonable time. Nebraska’s criteria for a ‘lemon’ is strict, but there may be other options available, such as warranty claims, even if your car does not fit the Nebraska criteria for the lemon law.
Arbitration is an informal process that is used to obtain speedy resolution of a warranty dispute without going to court, and it is legally binding on the manufacturer only. At an arbitration hearing, you and the manufacturer testify before an impartial arbitrator about the condition and repair history of the vehicle. The arbitrator will decide what is fair based on the facts of the case.
Arbitration is a quick and does not require an attorney. Cases take less than 40 days once you have supplied the repair and service information for the arbiter’s consideration.
Arbitration does not require that a vehicle be a “lemon,” but it must be under warranty.
The arbiter’s decision is binding on the manufacturer only; that is, you may accept or reject the arbiter’s
decision. If you accept, the manufacturer will have to do as the arbiterdecides.
If you reject, then nothing will happen. The manufacturer will do nothing, and you are
free to sue in court, if you wish.
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A "lemon" is a motor vehicle with a defect which substantially impairs the use or market value and cannot be repaired after reasonable attempts. The vehicle must be:
The vehicle may be used for any purpose, that is, it may be used for business, family, household or personal purposes. It may be any size, from a motorcycle to a semi-truck. It may be leased from a dealer in Nebraska.
The vehicle cannot be a trailer or self-propelled motor home.
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A vehicle is presumed* to be a lemon if
*Note, however, that a vehicle may be a lemon even without the presumption.
An arbiter or judge might decide that a life-threatening defect, for example, does not need four
repair attempts before concluding the vehicle is a lemon.
On the other hand, an insignificant problem that remains unfixed might not be a lemon. That is, a
judge might find that a 1 year old vehicle with a history of noise problems is not a lemon, even though
the noise remains unfixed.
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A manufacturer is allowed to argue that the problem does not substantially impair
the use or market value of the vehicle or that the problem is a result of abuse, neglect, or
unauthorized modifications of the vehicle.
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Generally, arbitration is available for most vehicles under original warranty, regardless of the age of the vehicle.
A few manufactures do not have arbitration, so your only recourse is to sue.
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A lemon law dispute is between you and the manufacturer, and it does not include your
dealer. You must give the manufacturer written notification by certified mail, and he must have an
opportunity to fix the problem. As a practical matter, you should probably send notification after the
third repair attempt or after the vehicle has been in the shop 30 cumulative days.
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The Nebraska Lemon Law provides that a manufacturer must pay, should a vehicle be a lemon, the full purchase price for the vehicle including all sales tax, license and registration fees, and any similar governmental charges (minus a reasonable amount for the use of the vehicle.) It will also pay your reasonable attorney’s fee.
If you accept a buy-back that does not include taxes and fees, the Nebraska Department of
Revenue will not refund taxes or fees. You will simply loose that money.
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As with any legal matter, you must present your best case. And this is easiest with
documentation from the dealer, so keep all records of every repair. This includes times that the
dealer could find nothing wrong. And it also includes every trip into the shop, e.g., taking the
vehicle for diagnosis and bringing it back for the part to be installed is two trips.
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You may always hire an attorney to help you organize and present your case. You will probably need one if you decide to sue the manufacturer in court rather than going through arbitration. An attorney is optional at arbitration – you decide if one would be helpful.
You will have to notify the manufacturer of your vehicle by certified mail to begin the lemon law claim. The claim will be arbitrated through the BBB AUTO LINE and application may be made on the internet. The BBB Auto Line phone number is: 1-800-334-2406
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General Motors prefers that you use the following addresses to notify them, by certified letter, about your lemon law claim.
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The following manufacturers are not certified, that is, they will not refund taxes and fees, although they may agree to repurchase or replace the defective vehicle. You do not have to use arbitration: you may sue directly in court. If you wish to try arbitration contact:
BBB AUTO LINE 1-800-334-2406.
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DaimlerChrysler Motor Corporation (Dodge, Plymouth, Jeep, And Eagle)does not use arbitration. You may sue DaimlerChrsyler directly if you wish.
United States DaimlerChrysler Motors Corp. Customer Center, PO Box 21-8004, Auburn Hills MI 48321-8004. Telephone:1-(800)-992-1997