The following provides a general overview of Ohio’s Lemon Law and Title Defect Rescission Act. For guidelines on complying with Ohio’s advertising laws for motor vehicles, please see the Attorney General’s Guidelines for Motor Vehicle Dealers, available at www.OhioAttorneyGeneral.gov/Publications. For information on auto repairs and services, please see the Repairs and Services section in this guide.
What is a lemon?
A “lemon” is a new motor vehicle that has one or more problems covered by the warranty that substantially impair the use, value, or safety of the vehicle. Ohio’s Lemon Law (starting at R.C. 1345.71) requires manufacturers to repair defects that affect the use, value or safety of a new motor vehicle within the first 12 months or first 18,000 miles of use, whichever comes first.
What vehicles are covered under the Lemon Law?
The Lemon Law covers new passenger cars, motorcycles, certain recreational vehicles, noncommercial motor vehicles, or those parts of any motor home that are not part of the permanently installed facilities for cold storage, for cooking and consuming of food or for sleeping. It does not cover mobile homes, recreational vehicles or any manufactured home.
Does the Lemon Law cover used cars?
The Lemon Law generally does not cover used cars, unless they fall within the protection period (that is, unless the problems occur within the vehicle’s first year or first 18,000 miles, whichever comes first). The Lemon Law does protect consumers even if the problem was discovered late within the protection period and the repair attempts extend beyond one year or 18,000 miles.
The law does not cover lemons that have been resold to consumers. However, when these used cars are offered for sale, they must include a notice describing the defect, and they must include a 12-month, 12,000-mile warranty or the remainder of the original warranty, whichever is greater. The manufacturer must also “brand” (place a notation upon) the resale title indicating the vehicle was returned because of nonconformance to the warranty. Vehicles returned for problems that could cause death or serious injury may not be resold in Ohio.
Consumers’ Rights Under the Lemon Law
Under the Lemon Law, the auto manufacturer must be given a reasonable opportunity to fix the problem, and if the problem is not corrected, the consumer might be eligible for a refund or a replacement.
A manufacturer has had a reasonable opportunity to fix the problem if, during the protected period, any of the following apply:
Substantially the same nonconformity has been subject to repair three or more times and either continues to exist or recurs;
The vehicle is out of service by reason of repair for a cumulative total of 30 or more calendar days;
There have been eight or more attempts to repair any nonconformity; or
At least one attempt has been made to repair a nonconformity that results in a condition March 2011 7 that is likely to cause death or serious bodily injury if the vehicle is driven, and the nonconformity either continues to exist or recurs.
Refund of the Full Purchase Price
The refund includes the full purchase price and incidental damages including, but not limited to, any fees charged by the lender or lessor for making or canceling the loan or lease and expenses incurred by the consumer as a result of the nonconformity, such as charges for towing, vehicle rental, meals, and lodging.
Lemon Law Notification
Manufacturers must provide every new vehicle buyer with a notice describing their legal rights under Ohio’s Lemon Law.
Resolving Lemon Law Disputes
Arbitration allows a neutral party to make a decision about a lemon if the consumer and manufacturer cannot reach a resolution. Consumers must use arbitration if the manufacturer participates in an arbitration program approved by the Ohio Attorney General. Contact the Attorney General for a list of approved arbitration programs.
Automotive Consumer Action Program (AUTOCAP) is a third party dispute resolution program for new motor vehicle dealers, sponsored by the Ohio Automobile Dealers Association. The Attorney General refers complaints involving AUTOCAP members to AUTOCAP for mediation. If the issue is not resolved, then it goes to arbitration and the resulting decision is final.
Warranties and Service Contracts
The federal Magnuson-Moss Warranty Act establishes requirements for entities that provide warranties. Under the law, if a manufacturer offers a warranty, the warranty must be available for the consumer to read before the purchase is made. A product sold “as is” has no warranty. A service contract is not a warranty as defined by federal law and should not be advertised as such.
Title Defect Rescission Fund
Licensed Ohio motor vehicle dealers are required to participate in a program called the Title Defect Rescission (TDR) Fund. Participating in the TDR Fund allows dealers to sell vehicles before obtaining the titles for those vehicles. A motor vehicle dealer may not display, offer for sale, or sell a used motor vehicle without having first obtained a certificate of title for the vehicle in the name of the dealer unless the dealer is a member of the TDR Fund.
When is an auto dealer required to participate in the TDR Fund?
All licensed dealers must pay into the fund when it falls below $300,000 and the Attorney General issues an assessment. If the dealer has been licensed as a motor vehicle dealer for less than three years in the state of Ohio, the dealer must post a surety bond of at least $25,000 with the Attorney General. Dealers who are unable to obtain a surety bond are not permitted to sell vehicles to which they do not hold title. New dealers who obtain a surety bond are not required to pay into the TDR Fund until the Attorney General performs another assessment.
What is the purpose of the TDR Fund?
The TDR Fund was created to maintain and administer refunds to retail purchasers of motor vehicles who suffer damages from motor vehicle dealers who fail to provide a valid certificate of title in the purchaser’s name within the statutorily required period of time. For more information, see R.C. 1345.52.
Under the law, the retail purchaser has an unconditional right to rescind the transaction and the dealer has an obligation to refund to the retail purchaser all monies paid, if one of the following applies:
The dealer fails to obtain a certificate of title in the consumer’s name after 40 days from the date of the purchase;
The certificate of title for the vehicle indicates that it is a rebuilt salvage vehicle, and that fact was not disclosed to the consumer in writing before the execution of the purchase agreement; or
The certificate of title for the vehicle indicates that the dealer has made an inaccurate odometer disclosure to the consumer.
When can a consumer apply for relief under TDR?
The consumer may apply to the Attorney General for payment from the TDR Fund of any monies paid for the purchase of the vehicle if:
The consumer notifies the TDR Fund participating dealer of one or more of the circumstances listed above; and
The dealer fails to refund the consumer all monies paid for the purchase of the vehicle or fails to reach a satisfactory compromise within three business days.
Additional Motor Vehicle Laws
The Motor Vehicle Collision Repair Operators Act (starting at R.C. 4775.02) requires registration and insurance for people who repair vehicles that have been damaged in collisions.
The Odometer Rollback and Disclosure Act (starting at R.C. 4549.41) makes it illegal to alter or conceal the mileage reading of a vehicle. It provides for a civil penalty of $1,000 to $2,000 for each tampered odometer, and requires written notice of odometer repair when an odometer is serviced.
Overview of Auto Laws:
A “lemon” is a new motor vehicle that has one or more problems covered by the warranty that substantially impair the use, value or safety of the vehicle.
Ohio’s Lemon Law covers vehicles within the first year or first 18,000 miles of use, whichever comes first.
Licensed Ohio motor vehicle dealers are required to participate in the TDR Fund.
It is illegal to alter or conceal a vehicle’s mileage reading.