Know before you go
- New car protection runs for 24,000 miles or two years from delivery, whichever comes first.
- Used car claims are free to file; new car claims carry a $50 fee refunded if you win.
- A Lemon Law hearing is usually scheduled within about 20 days of an accepted application.
New Jersey has two lemon laws. One covers new cars and motorcycles bought, leased or registered in the state. The other covers used cars bought from licensed dealers. Both run through the same state office, the Lemon Law Unit of the Division of Consumer Affairs, and both offer a faster, cheaper route than a regular lawsuit. The details, though, differ in ways that matter.
The two laws side by side
| Question | New Car Lemon Law | Used Car Lemon Law |
|---|---|---|
| Who is covered | Anyone who buys, leases or registers a new car or motorcycle in New Jersey | Buyers of used passenger cars from licensed New Jersey dealers |
| Protection period | 24,000 miles or two years from delivery, whichever comes first | The dealer warranty: 90, 60 or 30 days depending on mileage |
| Defect | Substantially impairs use, value or safety, or a serious safety defect | A material defect in a covered engine, transmission or drive part |
| Filing fee | $50, refunded if you win | None |
| Not covered | Commercial vehicles, motor home living quarters, damage from accident, abuse or outside repairs | Cars under $3,000, over seven model years, over 100,000 miles, total losses, as-is and private sales |
New car: the path to a claim
1. Report every defect and keep the paperwork
Tell the dealer or manufacturer about the problem right away and make sure each repair order describes it, with dates and odometer readings in and out. Keep every repair order and receipt and a record of each contact. The application depends on them.
2. Send the last-chance letter
Before filing, you must give the manufacturer one final chance to repair the defect. The letter goes to the manufacturer, not the dealer, by certified mail with a return receipt, to a regional address the Lemon Law Unit provides. It can be sent after two failed repair attempts for the same defect, or after the vehicle has been out of service for a total of 20 days, or 45 days for a motor home. For a serious safety defect, one failed attempt is enough. The letter must reach the manufacturer before 24,000 miles and within two years of delivery. The Division publishes a sample letter in its consumer brief.
3. Allow the final repair
The manufacturer has 10 days from the date on the return receipt to repair the car. If the defect remains afterward, you can apply to the Lemon Law Unit. To qualify for a hearing, the state’s brief lists three repair attempts, proof the last-chance letter was received and a defect that still exists.
Used car: the dealer warranty is the key
The Used Car Lemon Law works through the warranty the dealer must give on qualifying cars. If, during that warranty, the dealer fails to fix the same covered defect after at least three attempts, or the car is out of service for 20 cumulative days while the dealer works on it, the buyer may be entitled to a refund of the full purchase price, excluding sales tax and fees and less deductions for excessive wear and personal use. The buyer pays a $50 deductible per covered repair. Which cars qualify and for how long is covered in Buying a Used Car in New Jersey: The Buyers Guide, the Dealer Warranty and the Myth of the 3-Day Cancel.
Tip: Call the Lemon Law Unit at 973-504-6226 before you send anything. Staff do not give legal advice, but they can confirm the manufacturer’s correct address, mail you an application and answer questions about deadlines.
What happens after you apply
- The Unit reviews the application and approves it, rejects it or returns it for corrections.
- For a new car, the $50 fee is requested after approval; used car claims are free.
- The manufacturer or dealer receives a copy, and in used car cases the Unit first tries to resolve the dispute.
- A hearing is usually set within 20 days, depending on availability at the Office of Administrative Law, in Newark, Trenton or Atlantic City.
- The administrative law judge issues an initial decision within 20 days of the hearing.
- Within 15 days of that, the Director of Consumer Affairs issues a final decision adopting, rejecting or changing it.
Either side can appeal the final decision to the Appellate Division within 45 days. Under the Division’s 2012 guidebook, a manufacturer that appeals must post a bond equal to the award plus $2,500 toward the consumer’s attorney fees.
What a new car refund can include
If you win a new car case, the manufacturer is ordered to take the vehicle back and issue a refund. The Division’s guidebook lists items the refund may include: the purchase price or lease costs, finance charges, reasonable attorney fees, the $50 application fee, repair costs, reasonable rental car costs while the car was out of service for the defect, expert witness fees and towing. A manufacturer may offer a replacement vehicle instead, but you are not required to accept it.
A deduction for use comes off the refund. It equals the purchase price multiplied by the mileage when the car first went in for the defect, divided by 100,000. In the guidebook’s example, a $19,500 car first repaired at 9,500 miles carries a deduction of $1,853, for a refund of $17,647.
Other routes
You may use a manufacturer’s own arbitration program if it has one; the state process remains available afterward if you have not settled. You can also file a private lawsuit, but once a civil action is filed or decided, the Lemon Law program is no longer available. Attorneys are not required at the state hearing, and in new car cases a winning consumer’s reasonable attorney’s fees are paid by the manufacturer. In used car cases, the Division’s brief notes that attorney fees are not part of the refund.
If the dispute is really about how the car was sold rather than a defect, the Consumer Fraud Act may apply instead; see The New Jersey Consumer Fraud Act in Plain Language: What It Covers and How to Use It.