In contract law, a warranty is a written guarantee in which the manufacturer or retail seller of a product promises to repair or replace the product if it is necessary within a specified period of time after the purchase. In the case of a car, if it has defects that require repair, the warranty guarantees that the seller will make the repair or, in some cases, refund the buyer’s money.
Some car warranties provide a written guarantee of the car’s performance, while other guarantees are contained in statutes and do not depend on a written guarantee from the manufacturer or retailer.
A warranty should not be confused with an automobile service contract. They are similar but not the same. Both a warranty and a service contract promise repairs or payment for certain defects or problems in a person’s car. The main difference is that a service contract comes at a cost; it is something the purchaser of a vehicle has to pay for in addition to the price of the vehicle.
A purchaser should not have to pay an amount in addition to the purchase price of any product for a warranty. Car dealers generally sell service contracts with full disclosure of the fact that they are an extra product. But retailers of consumer goods often present a service contract as a warranty. However, they require payment, so they are really service contracts and not warranties.
Sometimes vehicle service contracts are worth their price, but often they are not. If a person is purchasing a new car, they should be able to rely on the fact that the car will operate as promised for at least as long as the life of most service contracts. If a buyer does not trust that this is so, then they may want to question why they are buying a particular car.
In deciding whether to purchase a particular vehicle service contract, a person should consider the following:
- Does the service contract offer the same protection that is offered by other warranties? If so, it probably is not worth the cost;
- How much the service contract costs and how long it lasts;
- Whether there is a deductible and if there is, how much is it. If there is a deductible, a person has to consider whether repairs that exceed that amount are likely to be needed within the life of the service contract. If not, a person does not really need the contract;
- What repairs and services the contract would provide;
- Who would perform the repairs;
- The company that would back the contract;
- Whether the person’s auto loan lender requires a service contract.
Car warranties and the laws that govern them were created to protect consumers from losing money on what is an important big-ticket item for most people and families, that is, buying a car.
How Does a Warranty Work?
The following are some warranties that protect consumers in car purchases.
- Express Warranties: Express warranties can be created orally or in writing. Because car sales may involve the expression of warranties in the form of commercials or other advertisements, a seller’s failure to comply with the promise they advertised can result in liability for breach of warranty;
- Implied Warranties: Warranties are unwritten guarantees that the product a person purchases meets a certain standard. Even if there is no discussion about whether the new car a person bought works the way it should, the law requires the seller to sell only vehicles that are functioning as car buyers expect them to;
- The Implied Warranty of Merchantability: Clearly, this is an implied warranty, which means that a manufacturer or seller does not have to express it orally or in writing to the buyer of a vehicle. It is implied by law. It provides that a vehicle offered for sale must be operational for use as the buyer intends to use it.
- So, if a person drives their new car off the car lot and it suddenly breaks down for no apparent reason, the seller has likely violated the implied warranty of merchantability. The seller must repair the car or compensate the buyer for their loss;
- The Implied Warranty of Fitness for a Particular Purpose: The implied warranty of fitness for a particular purpose is another type of implied warranty. This warranty relates to a vehicle that has been advertised or promised to meet some sort of special purpose, such as four-wheel drive or the capacity to haul cargo.
- If a seller promises that a vehicle is fit for a particular purpose, then the vehicle must perform as promised. If it does not, then the seller can be liable for breach of the implied warranty of fitness for a particular purpose;
- Statutory Warranties: A statutory warranty is a warranty mandated in state or federal statute. Statutory warranties are often designed to reduce the incidence of fraud by sellers. For example, in some states, a seller is legally required to offer warranties for passenger cars. These warranties must ensure that consumers are not charged for repairs that a car needs to reduce vehicular emissions below the limits set by law.
If a seller advertises or informs the buyer that the vehicle is being sold “as is” then any warranties do not apply to the transaction. Or, if the seller informs the buyer that the vehicle is damaged or in poor repair, then there may be no implied warranty. The buyer should know that they are taking a risk in buying the car.
In the following states, however, products are not allowed to be sold “as-is”:
- New Hampshire;
- West Virginia; and
- The District of Columbia.
This means that sellers of products in these states cannot disclaim implied warranties of merchantability or fitness for a particular purpose. Whenever a seller tells a person that a product is being sold “as-is” and the person then discovers that the product is defective, they should never assume that they do not have a claim against the seller for breach of warranty. A person should at least consult a vehicle warranty lawyer to find out if some sort of remedy is available to them.
Yet another kind of warranty is a “lemon law”. California is a state that has a “lemon law”, which is contained in California’s Song-Beverly Consumer Warranty Act. This law provides that a vehicle is presumed to be a “lemon,” slang for “a worthless thing,” if, within 18 months of the its purchase, or 18,000 odometer miles, the following occurs:
- The manufacturer has made 2 or more attempts to repair a warranty problem that is serious enough that it result in death or serious injury; or
- The manufacturer has tried to repair the same warranty problem at least 4 times; or
- The car has been out of service for 30 days or more for repair to warranty problems; and
- The owner has not caused the problems with the vehicle by abusing it.
If a person’s vehicle qualifies as a lemon, the manufacturer must either replace the vehicle or refund the full purchase price. If the manufacturer refuses or unreasonably delays offering either of these remedies, a person can request arbitration to settle the matter.
Today, all states have some form of a lemon law. Their specific provisions vary. For example, in some states, the manufacturer has to make 3 or more attempts to repair a problem before a vehicle can be considered a lemon. All states, however, offer some sort of warranty relief once a vehicle has met the requirements for qualification as a lemon.
What Happens If the Warranty Is Breached?
Most warranties have time limitations, meaning they are given effect for a limited period of time. They also require the buyer to use the vehicle and maintain it in a reasonable manner. If the buyer has used the vehicle properly and a problem occurs that is the result of a manufacturer’s defect, then the buyer is entitled to the remedy provided in the applicable warranties.
Sometimes the remedy takes the form of a repair by the manufacturer or retailer. Or, it can take the form of money damages to compensate the buyer. Consumers who have been unsuccessful in resolving the problem with a manufacturer or seller can report the incident to the Federal Trade Commission (FTC) and their state and local consumer protection agencies as well.
If state or federal agencies cannot provide relief, a civil lawsuit for breach of warranty may be an option.
Where Can I Get Legal Help for a Car Warranty Issue?
If within a year or two of your purchase of a car, it requires repair for defects, you may have a remedy in a mechanics law warranty. As can be seen, the law of warranties can be complicated and technical. Different warranties may apply to new and used car transactions. So, it is best to consult an auto lawyer near you. Your lawyer can determine what warranties may apply and provide you with a remedy.
If the manufacturer or seller does not agree to provide you with the repair or money damages to which you are entitled, your lawyer can help you pursue a solution through government agencies or the courts, if necessary.