New Jersey Lemon Law Statute
Title 56:12-29 – 56:12-49
§ 56:12-29. Findings, intentions
The Legislature finds that the purchase of a new motor vehicle is a major, high cost consumer transaction and the inability to correct defects in these vehicles creates a major hardship and an unacceptable economic burden on the consumer. It is the intent of this act to require the manufacturer of a new motor vehicle, or, in the case of a new motor vehicle that is an authorized emergency vehicle, the manufacturer, co-manufacturer, or post-manufacturing modifier, to correct defects originally covered under warranty which are identified and reported within a specified period. It is the further intent of this act to provide procedures to expeditiously resolve disputes between a consumer and a manufacturer, co-manufacturer, or post-manufacturing modifier when defects in a new motor vehicle are not corrected within a reasonable time, and to provide to award specific remedies where the uncorrected defect substantially impairs the use, value, or safety of the new motor vehicle.
§ 56:12-30. Definitions
As used in this act:
“Co-manufacturer” means, solely with respect to an authorized emergency vehicle as defined in R.S.39:1-1, any person that fabricates the authorized emergency vehicle utilizing a component or components of a new motor vehicle made by a manufacturer, other than modifying an existing standard model of a vehicle manufactured by a manufacturer, which component or components are obtained by the co-manufacturer from the manufacturer to fabricate the vehicle for use as an authorized emergency vehicle prior to an initial retail sale or lease of the emergency vehicle.
“Consumer” means a buyer or lessee, other than for purposes of resale or sublease, of a motor vehicle; a person to whom a motor vehicle is transferred during the duration of a warranty applicable to the motor vehicle; or any other person entitled by the terms of the warranty to enforce the obligations of the warranty.
“Dealer” means a person who is actively engaged in the business of buying, selling or exchanging motor vehicles at retail and who has an established place of business.
“Director” means the Director of the Division of Consumer Affairs in the Department of Law and Public Safety, or his designee.
“Division” means the Division of Consumer Affairs in the Department of Law and Public Safety.
“Informal dispute settlement procedure” means an arbitration process or procedure by which the manufacturer, or, in the case of an authorized emergency vehicle, the manufacturer, co-manufacturer, or post-manufacturing modifier, attempts to resolve disputes with consumers regarding motor vehicle nonconformities and repairs that arise during the vehicle’s warranty period.
“Lease agreement” means a contract or other written agreement in the form of a lease for the use of a motor vehicle by a person for a period of time exceeding 60 days, whether or not the lessee has the option to purchase or otherwise become the owner of the motor vehicle at the expiration of the lease.
“Lessee” means a person who leases a motor vehicle pursuant to a lease agreement.
“Lessor” means a person who holds title to a motor vehicle leased to a lessee under a lease agreement or who holds the lessor’s rights under such an agreement.
“Lien” means a security interest in a motor vehicle.
“Lienholder” means a person with a security interest in a motor vehicle pursuant to a lien.
“Manufacturer” means a person engaged in the business of manufacturing, assembling or distributing motor vehicles, who will, under normal business conditions during the year, manufacture, assemble or distribute to dealers at least 10 new motor vehicles.
“Motor vehicle” means a passenger automobile, authorized emergency vehicle, or motorcycle as defined in R.S.39:1-1 which is purchased or leased in the State of New Jersey or which is registered by the New Jersey Motor Vehicle Commission, except the living facilities of motor homes.
“Nonconformity” means a defect or condition which substantially impairs the use, value or safety of a motor vehicle.
“Post-manufacturing modifier” means, solely with respect to an authorized emergency vehicle as defined in R.S.39:1-1, any person who modifies the configuration of an existing standard model of a motor vehicle purchased from a manufacturer to adapt the vehicle for use as an authorized emergency vehicle prior to an initial retail sale or lease of the vehicle.
“Reasonable allowance for vehicle use” means the mileage at the time the consumer first presents the motor vehicle to the dealer, distributor, manufacturer, co-manufacturer, or post-manufacturing modifier for correction of a nonconformity times the purchase price, or the lease price if applicable, of the vehicle, divided by one hundred thousand miles.
“Warranty” means any warranty, whether express or implied of the manufacturer of a new motor vehicle, or, in the case of a new motor vehicle that is an authorized emergency vehicle, of the manufacturer, co-manufacturer or post-manufacturing modifier, of the vehicle’s condition and fitness for use, including any terms or conditions precedent to the enforcement of obligations under the warranty.
§ 56:12-31. Report of nonconformity; repairs
If a consumer reports a nonconformity in a motor vehicle to the manufacturer, or, in the case of a motor vehicle that is an authorized emergency vehicle, the manufacturer, co-manufacturer or post- manufacturing modifier, or its dealer or distributor, during the first 24,000 miles of operation or during
the period of two years following the date of original delivery to the consumer, whichever is earlier, the manufacturer, co-manufacturer, or post-manufacturing modifier shall make, or arrange with its dealer or distributor to make, within a reasonable time, all repairs necessary to correct the non-conformity.
Such repairs if made after the first 12,000 miles of operation or after the period of one year following the date of original delivery to the consumer, whichever is earlier, shall be paid for by the consumer, unless otherwise covered by a warranty of the manufacturer, co-manufacturer or post-manufacturing modifier, and shall be recoverable as a cost under section 14 [C.56:12-42] of this act.
§ 56:12-32. Refunds
If, during the period specified in section 3 [C.56:12-31] of this act, the manufacturer, or, in the case of an authorized emergency vehicle, the manufacturer, co-manufacturer, or post-manufacturing modifier, of that part of the motor vehicle containing the nonconformity, or its dealer or distributor, is unable to repair or correct the nonconformity within a reasonable time, the manufacturer, co-manufacturer, or post-manufacturing modifier shall accept return of the motor vehicle from the consumer.
In the case of a motor vehicle, other than an authorized emergency vehicle as set forth in paragraph (2) of this subsection, the manufacturer shall provide the consumer with a full refund of the purchase price of the original motor vehicle including any stated credit or allowance for the consumer’s used motor vehicle, the cost of any options or other modifications arranged, installed, or made by the manufacturer or its dealer within 30 days after the date of original delivery, and any other charges or fees including, but not limited to, sales tax, license and registration fees, finance charges, reimbursement for towing and reimbursement for actual expenses incurred by the consumer for the rental of a motor vehicle equivalent to the consumer’s motor vehicle and limited to the period during which the consumer’s motor vehicle was out of service due to the nonconformity, less a reasonable allowance for vehicle use.
In the case of an authorized emergency vehicle, the manufacturer, co-manufacturer, or post- manufacturing modifier shall provide the consumer with a full refund of the purchase price of the original emergency vehicle, depending on the source of the nonconformity, including any stated credit or allowance for the consumer’s used emergency vehicle, as well as any other charges or fees, including, but not limited to, sales tax, license and registration fees, reimbursement for towing and reimbursement for actual expenses incurred by the consumer for the rental of a substitute emergency vehicle, if applicable, for the period during which the consumer’s emergency vehicle was out of service due to the nonconformity.
Nothing in this subsection shall be construed to preclude a manufacturer, co-manufacturer, or post- manufacturing modifier from making an offer to replace the vehicle in lieu of a refund; except that the consumer may, in any case, reject an offer of replacement and demand a refund. Refunds shall be made to the consumer and lienholder, if any, as their interests appear on the records of ownership maintained by the Chief Administrator of the New Jersey Motor Vehicle Commission. In the event that the consumer accepts an offer to replace the motor vehicle in lieu of a refund, it shall be the manufacturer’s, co- manufacturer’s, or post-manufacturing modifier’s responsibility to insure that any lien on the returned motor vehicle is transferred to the replacement vehicle.
A consumer who leases a new motor vehicle shall have the same remedies against a manufacturer, co- manufacturer, or post-manufacturing modifier under this section as a consumer who purchases a new motor vehicle. If it is determined that the lessee is entitled to a refund pursuant to subsection a. of this section, the consumer shall return the leased vehicle to the lessor or manufacturer, co-manufacturer, or post-manufacturing modifier, and the consumer’s lease agreement with the motor vehicle lessor shall be terminated and no penalty for early termination shall be assessed. The manufacturer, co- manufacturer, or post-manufacturing modifier shall provide the consumer with a full refund of the amount actually paid by the consumer under the lease agreement, including any additional charges as set forth in subsection a. of this section if actually paid by the consumer, less a reasonable allowance for vehicle use. The manufacturer, co-manufacturer, or post-manufacturing modifier shall provide the motor vehicle lessor with a full refund of the vehicle’s original purchase price plus any unrecovered interest expense, less the amount actually paid by the consumer under the agreement. Refunds shall be made to the lessor and lienholder, if any, as their interests appear on the records of ownership maintained by the Chief Administrator of the Motor Vehicle Commission.
§ 56:12-33. Presumption of inability to correct nonconformity; written notification
It is presumed that a manufacturer, or, in the case of an authorized emergency vehicle, the manufacturer, co-manufacturer, or post-manufacturing modifier, or its dealer or distributor, is unable to repair or correct a nonconformity within a reasonable time if, within the first 24,000 miles of operation or during the period of two years following the date of original delivery of the motor vehicle to the consumer, whichever is the earlier date:
Substantially the same nonconformity has been subject to repair three or more times by the manufacturer, co-manufacturer, or post-manufacturing modifier, or its dealer or distributor, other than a nonconformity subject to examination or repair pursuant to paragraph (3) of this subsection because it is likely to cause death or serious bodily injury if the vehicle is driven, and the nonconformity continues to exist;
The motor vehicle is out of service by reason of repair for one or more nonconformities for a cumulative total of 20 or more calendar days, or in the case of a motorhome, 45 or more calendar days, since the original delivery of the motor vehicle and a nonconformity continues to exist; or
A nonconformity which is likely to cause death or serious bodily injury if the vehicle is driven has been subject to examination or repair at least once by the manufacturer, co-manufacturer, or post- manufacturing modifier, or its dealer or distributor, and the nonconformity continues to exist.
The presumption contained in subsection a. of this section shall apply against a manufacturer only if the manufacturer has received written notification, or, in the case of an authorized emergency vehicle, the manufacturer, and co-manufacturer or post-manufacturing modifier, if known, or the dealer or distributor, has received written notification, by or on behalf of the consumer, by certified mail return receipt requested, of a potential claim pursuant to the provisions of this act and has had one opportunity to repair or correct the defect or condition within 10 calendar days following receipt of the notification. Notification by the consumer shall take place any time after the motor vehicle has had substantially the same nonconformity subject to repair two or more times, or has been out of service by
reason of repair for a cumulative total of 20 or more calendar days, or in the case of a motorhome, 45 or more calendar days, or with respect to a defect or condition which is likely to cause death or serious bodily injury if the vehicle is driven, has been subject to examination or repair at least once, by the manufacturer, co-manufacturer, or post-manufacturing modifier, or its dealer or distributor.
Participating arbitrators shall be trained in arbitration and familiar with the provisions of this act.
Documents shall not be submitted to any dispute settlement body unless they have been provided to each of the parties in the dispute at least seven days prior to the commencement of the dispute settlement hearing. The parties shall be given the opportunity to comment on the documents in writing or with oral presentation.
No party shall participate in the informal dispute settlement procedure unless all other parties are also present and given an opportunity to be heard, or unless the other parties consent to proceeding without their presence and participation.
A consumer shall be given an adequate opportunity to contest a manufacturer’s, co-manufacturer’s, or post-manufacturing modifier’s assertion that a nonconformity falls within intended specifications for the vehicle by having the basis of this claim appraised by a technical expert selected and paid for by the consumer prior to the informal dispute settlement procedure. If the dispute settlement body rules in favor of the consumer, their costs and reasonable attorney’s fees shall also be awarded.
A dispute shall not be heard if there has been a recent attempt by the manufacturer, co-manufacturer, or post-manufacturing modifier to repair a consumer’s vehicle, but no response has yet been received by the dispute settlement body from the consumer as to whether the repairs were successfully completed. This provision shall not prejudice a consumer’s rights under this section.
The manufacturer, co-manufacturer, or post-manufacturing modifier shall provide, and the dispute settlement body shall consider, any relevant technical service bulletins issued regarding motor vehicles of the same make and model as the vehicle that is the subject of the dispute.
Any manufacturer, co-manufacturer, or post-manufacturing modifier who establishes or participates in an informal dispute settlement procedure, whether it meets the requirements of this section or not, shall maintain and forward to the director at six-month intervals the following records:
- The number of purchase price and lease price refunds requested, the number awarded by the dispute settlement body, the amount of each award, and the number of awards satisfied in a timely manner;
- The number of awards in which additional repairs or a warranty extension was the most prominent remedy, the amount or value of each award, and the number of awards satisfied in a timely manner;
- The number and total dollar amount of awards in which some form of reimbursement for expenses or compensation for losses was the most prominent remedy, the amount or value of each award, and the number of awards satisfied in a timely manner;
- The average number of days from the date of a consumer’s initial request to use the manufacturer’s, co-manufacturer’s, or post-manufacturing modifier’s informal dispute settlement procedure until the date of the decision and the average number of days from the date of the decision to the date on which performance of the award was satisfied.
§ 56:12-37. Dispute resolution
A consumer shall have the option of submitting any dispute arising under section 4 [C.56:12-32] of this act to the division for resolution, including disputes between a manufacturer, co-manufacturer, or post-manufacturing modifier regarding the source of nonconformities and resulting liability to the consumer. The director may establish a filing fee not to exceed the cost for the proper administration and enforcement of this act. This fee shall be recoverable as a cost under section 14 [C.56:12-42] of this act.
The director shall review a consumer’s application for dispute resolution and accept eligible disputes for referral to the Office of Administrative Law for a summary hearing. The hearing date shall, to the greatest extent possible, be convenient to all parties but shall be no later than 20 days from the date the application is accepted unless otherwise agreed. The Office of Administrative Law shall render a decision in writing to the director within 20 days of the conclusion of the hearing.
The director shall adopt, reject, or modify the decision no later than 15 days after receipt. Unless the director modifies or rejects the decision within the 15-day period, it shall be deemed adopted as final. Noncompliance with the decision within the specified time period may result in penalties of $5,000 per day.
The Office of Administrative Law may issue subpoenas to compel the attendance of witnesses and production of relevant documents.
A manufacturer, co-manufacturer, post-manufacturing modifier, or a consumer may appeal a final decision to the Appellate Division of the Superior Court. An appeal by a manufacturer requires a bond to cover the money award and anticipated attorney’s fees.
§ 56:12-38. Statistics
The Division of Consumer Affairs shall maintain an index of all motor vehicle disputes by make and model and compile statistics indicating compliance records with settlement decisions. These statistics shall be public records.
Manufacturers shall provide updated information on private arbitration or buy-back programs at six-month intervals.
56:12-39. Decision binding
A consumer is not required to participate in a manufacturer’s informal dispute settlement procedure before filing an action in court. However, a decision from the division’s summary hearing procedure is binding on all parties unless appealed.