The 1987 General Assembly enacted the "North
Carolina lemon law" to give better remedies to North
Carolina consumers who buy or lease a new car that is a "lemon." The North
Carolina lemon law
(1) defines clearly which cars are lemons, (2) spells out exactly the relief to
which the purchaser of, and consumer leasing a lemon is entitled and (3)
provides that a manufacturer who unreasonably refuses to grant to the buyer of
or consumer leasing a lemon the relief to which he is entitled must pay the
consumer triple damages and attorney's fees.
North Carolina lemon law does not apply just to passenger cars. It covers any new motor
vehicle other than a house trailer, provided that the vehicle does not have a
gross vehicle weight of 10,000 pounds or more. Thus, the law covers pickup
trucks, motorcycles and most vans, as well as cars. And the purpose for which
the vehicle is purchased or leased is not relevant. But, any cars purchased or
leased prior to October 1, 1987 is not covered by the lemon law.
solutions does the
Lemon Law provide?
If the manufacturer has not fixed the vehicle after a reasonable number of
attempts, the purchaser or leasing consumer is entitled to choose a comparable,
new replacement vehicle or a refund. The statute is not specific as to what is a
comparable new replacement vehicle, though it would clearly include an identical
make and model. However, the consumer may choose a refund instead of a
replacement. The statute is very specific about how to determine the amount of
A purchaser is entitled to a refund of:
- The full contract price including, but not limited to, charges for
undercoating, dealer-preparation and installed options, plus the non-refundable
portions of extended warranties and service contracts;
- All supplemental or collateral charges, including but not limited to, sales
tax, license and registration fees, and similar government charges;
- All finance charges incurred by the consumer after he first reports the
defect to the manufacturer, its agent, or its authorized dealer; and
- Any incidental damages and monetary consequential damages, less a reasonable
allowance for the consumer's use of the vehicle.
include, among other things, reasonable expenses for inspecting and transporting
the vehicle (e.g., towing expenses), costs to cover alternate transportation
(e.g., rental car fees), and hotel expenses, if any. Monetary consequential
damages include the value of lost use generally.
A leasing consumer is entitled to a refund of:
- All sums previously paid by the leasing consumer under the terms of the
- All sums previously paid by the leasing consumer in connection with entering
into the lease agreement, including, but not limited to, any capitalized cost
reduction, sales tax, license and registration fees, and similar government
- Any incidental and monetary consequential damages.
Because it is the manufacturer that is responsible for the vehicle, the
leasing must recover from the manufacturer, not the lessor. The lessor also may
recover from the manufacturer. Remedies available to the lessor are described at
G.S. § 20-351.3(b)(2).
The statute defines a "reasonable allowance for use" as that amount directly
attributable to use by the consumer prior to his first report of the defect to
the manufacturer, its agent, or its authorized dealer, and during any subsequent
period when the vehicle is not out of service because of repair. "Reasonable
allowance is presumed to be the cash price of the vehicle multiplied by a
fraction having as its denominator 100,000 miles and its numerator the number of
miles on the vehicle attributed to the consumer." For example, if the cash price
of the vehicle was $20,000 and the purchaser or leasing consumer had driven the
car 10,000 miles before getting a refund, the owner would be entitled to the
full refund, less $20,000 (10,000/100,000), or $2,000.