For most people, a new car is one of the biggest purchases they will ever make. Occasionally that car turns out to be a dud that returns to the shop again and again with the same problem. Every state has a lemon law to protect buyers in that situation. But what actually makes a car a lemon, what does the buyer have to do, and what do they get back?
In this TalksOnLaw interview, Joel Cohen sits down with Steve Lehto, a Michigan attorney who has spent his entire career handling lemon law cases for thousands of consumers and is the author of The Lemon Law Bible. Lehto walks through how lemon laws work, using Michigan as his model, the paper trail that wins cases, and the federal Magnuson-Moss Warranty Act, which covers almost everything else.
What Makes a Car a Lemon
All 50 states have lemon laws for new vehicles with defects so serious they cannot be fixed. Lehto notes that Michigan's law, in the home of the Big Three, is middle of the road, while states such as California and Wisconsin are more generous. Generally, the defect must be "substantial," meaning it impairs the vehicle's use or value, and in some states its safety. Lehto's practical test: if a stranger buying your car would demand a lower price because of the problem, it is substantial. A stalling engine qualifies. A wobbly rearview mirror does not.
Repair Attempts and Days in the Shop
A car usually becomes a lemon in one of two ways: repeated repair attempts for the same defect, typically four, or extended time out of service, often around 30 days, during the warranty period. The details vary by state. In Michigan, for example, the first repair attempt must occur in the first year. Courts read these laws in the consumer's favor. Three different fixes for the same stalling problem count as repairs of the same "defect or condition." A new engine that fails and takes 45 days to replace can make a lemon on its own. Lehto explains that modern cars, packed with computer modules and software that can conflict with one another, often defeat even well-meaning dealers.
When the Bright Lines Fall Short
The bright-line tests can be unforgiving. Lehto recalls a client whose steering wheel came off in his hands on the road. Under Michigan's statute, one repair did not make a lemon. "When does it become a lemon?" the client asked. "After it falls off two more times." Lehto brought the case under a different legal theory. The part was later recalled. Lemon laws provide one remedy, not the only one.
The Last-Chance Letter
Dealers are independent businesses, not the manufacturer, so the manufacturer may not know about a problem car. Many states, including Michigan, require a written "last-chance" notice to the manufacturer that demands a final repair. Manufacturers sometimes send field service engineers who can fix what the dealer could not. If the final attempt fails or the manufacturer does not respond, the car qualifies. Skipping the letter where it is required can defeat a claim.
Refund or Replacement, and Who Pays the Lawyer
A qualifying buyer can typically choose a refund or a comparable replacement vehicle. Lehto estimates that roughly one in a hundred new cars is a lemon, so some manufacturers treat buybacks as a cost of doing business while others fight them. Lemon laws are workable because of fee shifting: a consumer who wins recovers attorney's fees and costs from the manufacturer. That lets lawyers take strong cases at no charge to the client. Some manufacturers run programs to settle documented claims before suit. When a case goes to trial, the fee award can exceed the value of the car.
Build the Paper Trail
Lemon law cases are won on documents, Lehto says, not on witnesses. The two essentials are the purchase agreement, which shows the parties, the vehicle, the price, and the date, and a repair order for every visit, even when the work is under warranty. If a problem is intermittent, consumers can record it safely on a phone. A visit counts even if the dealer says it cannot find anything wrong, because the law turns on reporting the defect. If one dealer keeps failing, Lehto recommends trying another: it may fix the car, and if not, the case gets stronger.
What Is Covered and What Is Not
Coverage varies by state. Michigan's law covers passenger cars, light trucks, and SUVs bought for personal or household use. It does not cover motorcycles, RVs, boats, or commercial vehicles. Manufacturers can defend on grounds of abuse or neglect, so owners should follow the maintenance schedule and keep receipts for every oil change, whether done at a dealer, at an independent shop, or at home.
Calculating the Refund
Refunds are reduced for trouble-free use. Michigan prorates the price over an assumed 100,000-mile life, so a buyer whose first complaint came at 25,000 miles gives up about a quarter of the price. Leased and financed vehicles are covered, and lenders must cooperate in unwinding the deal. The goal is to put the buyer back where they were before the purchase. That means no recovery for rebates or for pain and suffering, but reimbursement of out-of-pocket costs such as towing and rental cars.
Magnuson-Moss: The Federal Lemon Law
For everything else, there is the federal Magnuson-Moss Warranty Act, which covers consumer products sold with a written warranty. If a product cannot be fixed after a reasonable number of attempts, the consumer may be entitled to a refund or replacement, but the Act never says what "reasonable" means. Lehto has used it for RVs, whose repair orders read "like a bad house," as well as motorcycles, snowmobiles, sewing machines, and even a machine gun. The Act also shifts attorney's fees, but judges may balk when the fees dwarf the price of an inexpensive product.
What to Know Now
The basic lemon law framework Lehto describes remains in place, and his advice to keep every purchase document and repair order is more important than ever. Cars have become even more software-driven, with electric powertrains, driver-assistance systems, and over-the-air updates. That raises new questions about how to count remote software fixes as repair attempts and how to document intermittent electronic problems. Many dealers now use electronic contracting, so buyers should make sure they receive and save complete copies. Federal protection against the dealer sales tactics Lehto warns about remains thin: the Federal Trade Commission's Combating Auto Retail Scams (CARS) Rule, which would have barred deceptive pricing and add-on practices, was struck down by the Fifth Circuit in January 2025 before it took effect. Magnuson-Moss continues to bar warrantors from conditioning coverage on dealer-only service or branded parts. The Federal Trade Commission has enforced that rule against manufacturers, which confirms Lehto's point that owners can use independent shops as long as they keep records.
The biggest changes have come in litigation. Manufacturers increasingly try to enforce arbitration clauses found in dealers' sales contracts. In 2025, the California Supreme Court held that a manufacturer that was not a party to the dealer's contract could not compel arbitration on that basis. California, whose lemon law generates a very large share of the country's cases, also enacted reforms in 2024 and 2025 that add pre-suit notice, early document exchange, and mediation for manufacturers that opt in. Its supreme court has also held that used cars sold with a remaining factory warranty generally are not "new motor vehicles" under the state's lemon law. Manufacturers argue that fee shifting encourages too much litigation over routine repairs. Consumer advocates respond that fee shifting is what makes it possible for ordinary buyers to enforce their rights. Both sides agree that the outcome usually turns on the paper trail.
