Buying a new car is not something most people do without thought; it generally requires a large investment of time and money. We choose our purchase carefully, and we hope that it will suit our needs, without too much trouble, for years to come. Sometimes, however, things don't work out that way. Every now and again, some unlucky buyer will end up with a vehicle that has a problem that simply cannot be repaired. These problem vehicles are universally known as "lemons.'Every state has a "lemon law", which requires vehicle manufacturers to either replace vehicles that are determined to be lemons with a new vehicle of comparable value or to refund the purchase price. The process for filing a claim under your state's Lemon Law varies from state to state, but the process often results in a lawsuit, which can drag out the process for both parties.
An alternative to lawsuits that attempts to be fair to both parties in the dispute has been developed, this is known as arbitration. In many states, perhaps yours, arbitration is a required component of filing a lemon law claim. How does arbitration work?
Most states have assembled an arbitration panel, which consists of several individuals who are familiar with the auto industry, but not tied to it or employed by it in any way. Most owner's manuals of new cars will outline the process of applying for arbitration; if not, you may contact your state's Attorney General's office. Participation in the arbitration process, unlike a lawsuit, is often free; some states charge a nominal fee to file for an arbitration hearing.
It is usually not necessary to have an attorney for the procedure, but you may hire one if you wish. There are many attorneys who specialize in Lemon Law cases; if you feel uncomfortable handling your claim yourself you may wish to consult with one. The process usually requires that the manufacturer be notified in writing of the dispute and that your state's arbitration panel be notified. Each side in the dispute presents their case, either in writing or orally, and the arbitration panel usually comes to a decision within 60 days.
In most states, the panel's determination is binding on the part of the manufacturer; they must abide by the decision. The vehicle owner is usually not bound by the decision and remains free to sue should the panel rule in favor of the auto manufacturer.
