Standards Of The Iowa Lemon Law
The lemon law covers motor vehicles that are purchased or leased in Iowa and motor vehicles purchased or leased in other states if the consumer is a resident of Iowa at the time the consumer’s rights under the lemon law are asserted. The lemon law appears to cover used vehicles, but does not cover mopeds, motorcycles, motor homes, or vehicles with a G.V.W. rating of over 10,000 pounds.
Vehicles Covered
Vehicle Converters
The lemon law provides a Lemon Law Rights Period that ends at the earlier of:
- The expiration of the manufacturer’s written warranty;
- 24 months after the date of the initial retail delivery of a motor vehicle to a consumer; or
- The first 24,000 miles of operation after such delivery.
Vehicle Converters
Lemon Law Rights Period
The lemon law provides a Lemon Law Rights Period that ends at the earlier of:
- The expiration of the manufacturer’s written warranty;
- 24 months after the date of the initial retail delivery of a motor vehicle to a consumer; or
- The first 24,000 miles of operation after such delivery.
Problems Covered
Manufacturer’s Duty To Repair
Notice And Opportunity To Repair
Manufacturer’s Duty To Repurchase Or Replace A Vehicle
“Substantially Impair”
Reasonable Number Of Repair Attempts
- the same nonconformity that substantially impairs the motor vehicle continues to exist after it has been subject to examination or repair at least three times by the manufacturer or its authorized service agent, plus a final attempt by the manufacturer to repair the vehicle made within 10 days after receipt of the consumer’s notice of the need to repair the nonconformity by express, certified or registered mail;
- a nonconformity that is likely to cause death or serious bodily injury continues to exist after it has been subject to examination or repair at least once by the manufacturer or its authorized service agent, plus a final attempt by the manufacturer to repair the vehicle made within 10 days after receipt of the consumer’s notice by express, certified or registered mail; or
- the vehicle is out of service for repair of any nonconformity that substantially impairs the motor vehicle for a cumulative total of thirty (30) or more calendar days, exclusive of down time for routine maintenance. The 30-day time period may be extended if repair services are unavailable because of war, invasion, strike, fire, flood, or natural disaster.
Dispute Resolution
The lemon law provisions requiring repurchase or replacement of a nonconforming motor vehicle do not apply to a consumer who has not first used an informal dispute settlement procedure if:
- The procedure has been certified by the Attorney General as complying with lemon law regulations; and
- At the time of the vehicle’s purchase or lease, the manufacturer clearly and conspicuously disclosed to the consumer in written materials accompanying the vehicle how and where to file a claim with the procedure.
Time Period For Filing Claims
Remedies Under The Iowa Lemon Law
Repurchase Of Owned Vehicles
The Iowa lemon law provides that a manufacturer must pay the following amounts when it repurchases an owned vehicle under the lemon law:
- Vehicle purchase price. This means the cash price paid for the vehicle appearing in the sales agreement, including any net allowance given for a trade-in vehicle;
- Collateral charges. These are defined as additional charges to a consumer wholly incurred as a result of the acquisition of the motor vehicle, and include all use taxes and title charges; the cost of any manufacturer-installed or agent-installed options; and all earned finance charges; and
- Incidental charges. These are defined as reasonable costs (not including loss of use, loss of income, or personal injury claims) incurred by the consumer as a direct result of the nonconformity, and include towing charges and costs of alternative transportation;
- Less a reasonable offset for use by the consumer.
The refund must be made to the consumer and lienholder of record, if any, as their interests appear. At the time of the refund, the consumer or lienholder must furnish to the manufacturer clear title to and possession of the motor vehicle.
The reasonable offset for use is determined by the following formula:
| Reasonable offset for use | = | # miles at time of manufacturer’s third repair attempt of same nonconformity, or at first attempt to repair a nonconformity likely to cause death or serious bodily injury, or at 20th cumulative day that vehicle is out of service for repair for nonconformity | X | vehicle’s purchase price |
| ————————————– | ||||
| 120,000 | ||||
Repurchase Of Leased Vehicles
The Iowa lemon law provides that the manufacturer must pay the following amounts when it repurchases a leased vehicle:
To the Lessor: the lease price, defined as –
- 105% of the lessor’s actual purchase costs, minus the total of all deposit and lease payments paid by the lessee to the lessor;
- Collateral charges (see above), if applicable;
- Any fee paid to another to obtain the lease;
- Any insurance premiums or other costs expended by the lessor for the benefit of the lessee, and
- An amount equal to state and local use taxes paid by the lessor when the vehicle was purchased, not otherwise included as collateral charges.
To the Lessee:
- All deposit and lease payments paid by the lessee to the lessor;
- Collateral charges, defined as additional charges to a consumer wholly incurred as a result of the acquisition of the motor vehicle, and include all use taxes and title charges; the cost of any manufacturer-installed or agent-installed options; and all earned finance charges; and
- Incidental charges, defined as reasonable costs (not including loss of use, loss of income, or personal injury claims) incurred by the consumer as a direct result of the nonconformity, including towing charges and costs of alternative transportation;
- Less a reasonable offset for use by the consumer.
The consumer’s lease agreement with the lessor is terminated upon payment of the refund and no penalty for early termination can be assessed. At the time of the refund, the consumer or lessor must furnish to the manufacturer clear title to and possession of the motor vehicle.
The Iowa lemon law states that a reasonable offset for the consumer’s use of a leased vehicle shall be deducted from the amounts a manufacturer pays to the lessee when it repurchases or replaces a vehicle. The reasonable offset for use is determined by the following formula:
| Reasonable offset for use | = | # miles at time of manufacturer’s third repair attempt of same nonconformity, or at first attempt to repair a nonconformity likely to cause death or serious bodily injury, or at 20th cumulative day that vehicle is out of service for repair for nonconformity | X | lease price plus 2% of purchase price |
| ————————————– | ||||
| 120,000 | ||||
Replacement Of Owned Or Leased Vehicles
If a manufacturer replaces a vehicle under the Iowa lemon law, the consumer must receive a replacement vehicle acceptable to the consumer that is identical or reasonably equivalent to the replaced motor vehicle as it existed at the time of original acquisition. The replacement must be performed within 40 days of receipt the consumer’s payment for a reasonable offset for use as determined by the appropriate formula above. In addition, the manufacturer must pay:
- Collateral charges. These are defined as additional charges to a consumer wholly incurred as a result of the acquisition of the motor vehicle, and include:
- all use taxes and title charges;
- the cost of any manufacturer-installed or agent-installed options; and
- all earned finance charges.
- Incidental charges. These are defined as reasonable costs (not including loss of use, loss of income, or personal injury claims) incurred by the consumer as a direct result of the nonconformity, and include:
- towing charges; and
- costs of alternative transportation.
At the time of the replacement, the consumer, lienholder, or lessor must furnish to the manufacturer clear title to and possession of the motor vehicle.
The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. This disclosure is required by rule of the Supreme Court of Iowa.
Memberships and offices in legal fraternities and legal societies, technical and professional licenses, and memberships in scientific, technical and professional associations and societies of law or field of practice do not mean that a lawyer is a specialist or expert in a field of law, nor do they mean that such a lawyer is necessarily any more expert or competent than any other lawyer.
A description or indication of limitation of practice does not mean that any agency or board has certified such lawyer as a specialist or expert in an indicated field of law practice, nor does it mean that such lawyer is necessarily any more expert or competent than any other lawyer. All potential clients are urged to make their own independent investigation and evaluation of any lawyer being considered. This notice is required by rule of the Supreme Court of Iowa.
See Iowa Code of Professional Responsibility DR 2-101(A), DR 2-101(C), DR 2-105(A)(3)(c) (1997).