Resolving Used Car Lemon Law Disputes

Wait! Before you buy that used car, find out if it's a certified lemon, courtesy of CarFax and CARFAX. Buying an "as is" car is very risky.

Once you hand over that money and sign your name on the dotted line, that car is your problem no matter what happens. Get a Free Car Check and make a better buying decision.

Get your personal credit rating from the 3 major credit bureaus - 3 Bureau Credit Report
Get cheap DVDs and CDs at a CD Music Club - CD Music Club
Get a free cell phone with T-Mobile nationwide - T Mobile Cellular Phone

Third-party mediation and arbitration programs should be a last resort. They seldom produce miracles.

In a dispute over service or the performance of your new vehicle, we advise that you exhaust each rung up the ladder of solutions before considering bringing in a third party. That means starting with the dealership. This will strengthen your case, should you proceed to mediation or beyond.

If the dealer can't solve your problem, take it to the manufacturer's district or regional representative (your owner's manual should contain this address and phone number). The next avenue should be a mediation or arbitration program.

A few automakers mediate customer disputes internally, but most participate in a program that allows dissatisfied owners to seek resolution through an independent third party.

These programs usually involve the consumer and the manufacturer, not the dealer. The consumer presents a complaint, supported by documentation (repair receipts, correspondence, etc.) to a mediator or arbitration panel. The manufacturer's representative presents its side of the story. Then, after considering both sides, the panel issues a decision or a recommendation.

Some findings are binding on the manufacturer. Remedies could range from providing the consumer with the repair they requested (such as repainting the car) to, in rare cases, providing the customer with a new vehicle. When a panel sides with the manufacturer's position, pursuing the complaint grows difficult for the consumer.

Two mediation/arbitration services handle the bulk of cases:

The Council of Better Business Bureaus operates the Auto Line program, which provides mediation and arbitration of disputes over manufacturing defects on vehicles still under warranty. Consumers should first contact the Better Business Bureau (BBB) headquarters at 1-800-955-5100. The BBB will refer the complaint to the appropriate automaker and try to arrange a resolution.

Mediation is provided by the Automotive Consumer Action Program (AUTOCAP), a service directed by the National Automobile Dealers Association (NADA) but performed by state or local dealer associations. BMW, Honda/Acura, Isuzu, Jaguar, Mitsubishi, Nissan/Infiniti, and Volvo use the AUTOCAP mediation program.

Both programs first try to settle the dispute in an informal mediation stage that gets both sides of the story on the table and tries to find a solution. The vast majority of cases are resolved this way.

If you're dissatisfied with a mediator's recommendation, the next option is arbitration. With Auto Line, unsettled complaints are presented to an impartial volunteer who decides the outcome. With AUTOCAP, a panel of consumer volunteers and dealer representatives decides the outcome.

Some manufacturers, including Ford Motor Co. and Daimler-Chrysler, run their own arbitration programs. Most others work through an outside group. Your owner's manual should tell you which program will be used.

In any program, you'll present your case orally and/or in writing. You'll need complete records, including work orders, letters, receipts, and notices. You must prove the vehicle has a problem that both the dealer and manufacturer have failed in several attempts to fix it and that you've exhausted all other avenues. The manufacturer and/or dealer will then present its case through a representative familiar with repair problems.

Arbitration is similar to a court hearing, though less formal, and a lawyer is not required. The panel's decision is binding only on the manufacturer. The consumer can accept the verdict or go on to the next step: formal legal action.

Less than one-third of consumers have a dispute settled wholly their way. In most mediation and arbitration cases, however, the decision at least partially satisfies both sides.