Arkansas Lemon Laws

§ 4-90-401-Title

This subchapter shall be known and may be cited as the "Arkansas New Motor Vehicle Quality Assurance Act".

History. Acts 1993, No. 285, § 1; 1993, No. 297, § 1

§ 4-90-402-Legislative Determinations and Intents

The Arkansas General Assembly identifies that a motor vehicle is a major attainment to a consumer and if that vehicle turns out as defective, then, it creates suffering for the buyers. The Arkansas General Assembly also identifies that a franchise responsible for the repairs is an authorized service agent of the manufacturer, and the manufacturer or its dealer is liable to make repairs within a specified period of time. Arkansas General Assembly also provides some statutory procedures to help consumers in getting replacement or a refund for a vehicle of which the repairing agent fails in fixing the nonconformity condition.

History. Acts 1993, No. 285, § 2; 1993, No. 297, § 2

§ 4-90-403-Definitions

As used in this subchapter, unless the context otherwise requires:

  1. "Calendar day" means a day reckoned from midnight to midnight expect an official holiday.
  2. "Collateral charges" are the additional charges which the consumer incurs in acquiring a vehicle. According to this subsection, collateral charges include, but not limited to, manufacturer-installed or agent-installed items, earned finance charges, sales taxes, title charges, and charges for extended warranties provided by the manufacturer, its subsidiary, or agent.
  3. "Condition" means a general problem that may be attributable to a defect in more than one (1) part.
  4. "Consumer" means,
    • a person who buys a vehicle, not for the purpose of lease or resale but for personal use, or
    • any other person who has been assigned a right to claim any defect under expressed warranty period, or
    • to whom the title of the vehicle has been transferred or registered.
  5. "Incidental charges" means the costs incurred by a buyer like, towing charges or the costs of obtaining alternative transportation, due to nonconformity, but shall not include loss of use, loss of income, or personal injury claims.
  6. "Lease price" means the aggregate of,
    • The purchasing price
    • Collateral charges, if any
    • Any extra charges paid to another person for getting the car leased
    • Insurance cost or any other cost incurred for the benefit of the lease
    • An amount equal to state and local sales taxes, not otherwise included as collateral charges, paid by the lessor when the vehicle was initially purchased
    • An amount equal to five percent (5%) of the lessor's actual purchase price.
  7. "Lessee" a person who leases a vehicle or any other product for a year or more with a written agreement signed by both lessor and lessee which provides that the lessee is responsible for repairs to such motor vehicle.
  8. "Lessee cost" means all previous costs including, deposit and rental payments, paid to the lessor by lessee against the leased vehicle.
  9. "Lessor" means a person who leases a vehicle or who holds title to a motor vehicle leased to a lessee under the written lease agreement.
  10. "Manufacturer" is a person engaged in the business of transforming raw material into motor vehicle fro sale.
  11. "Motor vehicle" or "vehicle" A self-moving vehicle having four or more wheels and which is used to fulfill transportation, personal, family, or household needs is a motor vehicle.
  12. "Motor vehicle quality assurance period" means a period that starts from the date of delivery or from the date of replacement of a vehicle till 24 months or 24,000 miles, whichever comes later.
  13. "Nonconformity" any defect that impairs the use or market value of a vehicle or takes place during normal use but doesn’t occurred by abuse, neglect, modification, or alteration, any accident or other damage of the motor vehicle prohibited by the manufacturer.
  14. "Purchase price" means the cash price paid for the purchase of motor vehicle to make it appear in the sales agreement or contract, including all net allowance for a trade-in.
  15. "Replacement motor vehicle" means a motor vehicle which is of equal value and is of same capacity to be replaced, as the motor vehicle replaced existed at the time of the original acquisition.
  16. "Warranty" is the warranty specified by the manufacturer or dealer assuring that the vehicle doesn’t have any defect or in case any defect arises, the manufacturer would be responsible for its repair.

History. Acts 1993, No. 285, § 3; 1993, No. 297, § 3; 1995, No. 302, § 1

§ 4-90-404-Notice by Consumer - Disclosure by Manufacturer, Agent, or Dealer

    • A buyer must notify the manufacturer of a claim under this subchapter if the manufacturer has made the disclosure required by subsection (b) of this section.
    • However, if the manufacturer has not made the required disclosure, the consumer is not required to notify the manufacturer of a claim under this subchapter.
    • The manufacturer must provide a written statement that explains the consumer's rights and obligations at the time of the consumer's purchase or lease of the vehicle.
    • Consumer Protection Division of the Office of the Attorney General prepares the written statement containing the telephone number of the Consumer Protection Division which will help consumer in contacting the department for obtaining any information regarding Arkansas lemon laws.
    • The manufacturer shall be liable to the State of Arkansas for a civil penalty of $25.00-$1,000, if he doesn’t provide a written statement to the buyer.
    • In the warranty manual, the manufacturer should clarify to the consumer that written notice of the nonconformity would be required before the buyer may be eligible for a refund or replacement of the vehicle.
    • The manufacturer must provide the consumer the address and phone number for its zone, district, or regional office for this state at the time of vehicle purchase, to which the buyer must send notification.

History. Acts 1993, No. 285, § 5; 1993, No. 297, § 5; 1995, No. 302, § 2.

§ 4-90-405-Required Warranty Repairs

If a motor vehicle is defective or does not conform to the warranty and the consumer notifies the manufacturer or authorized dealer during the warranty period, then, the manufacturer should make such repairs to correct the nonconformity.

History. Acts 1993, No. 285, § 4; 1993, No. 297, § 4.

§ 4-90-406-Failure to Make Required Repairs

    1. The consumer shall send a written notification to the manufacturer to allow the him a final attempt to cure the nonconformity if,
      • After three attempts, the manufacturer fails in correcting the nonconformity of the vehicle, or
      • After one attempt to repair a nonconformity that is likely to cause death or serious bodily injury.
    2. According to Arkansas lemon laws, the manufacturer must provide the consumer with the opportunity to have the lemon vehicle repaired within 10 days.
    3. There would be no need to ask the manufacturer for a final attempt to cure the nonconformity if,
      • the manufacturer forgets or fails to notify the consumer to bring the vehicle at the repair facility, or
      • the manufacturer fails to correct the nonconformity of the vehicle even after the third attempt.
      1. If the manufacturer, its agent, or authorized dealer has not conformed the motor vehicle to the warranty by repairing or correcting one (1) or more nonconformities that substantially impair the motor vehicle after a reasonable number of attempts, the manufacturer, within forty (40) days, shall:
        • At the time of its receipt of payment of a reasonable offset for use by the consumer, replace the motor vehicle with a replacement motor vehicle acceptable to the consumer; or
        • Repurchase the motor vehicle from the consumer and refund the full purchase price less a reasonable amount for use or for any physical damage sustained to the vehicle by the consumer.
      2. All collateral and reasonably incurred incidental charges should be included in replacement or refund.
      • The consumer must be given a right to choose a refund or a replacement.
      • At the time of such refund or replacement, the consumer shall provide to the manufacturer clear title to and possession of the motor vehicle.
    3. The amount of reasonable offset for use by the consumer shall be determined by multiplying the actual price of the new motor vehicle paid or payable by the consumer, including any charges for transportation and manufacturer-installed or agent-installed options, by a fraction having as its denominator one hundred twenty thousand (120,000) and having as its numerator the number of miles traveled by the new motor vehicle prior to the time the buyer first delivered the vehicle to the manufacturer, its agent, or authorized dealer for correction of the problem that gave rise to the nonconformity.
History. Acts 1993, No. 285, § 6; 1993, No. 297, § 6; 1995, No. 302, § 3.

§ 4-90-407-Refunds

    1. Refunds shall be made to the consumer according to their interests.
    2. Refunds shall be made to the lessor and lessee as follows:
      • The lessee shall receive the purchase cost less a reasonable offset for use; and
      • The lessor shall receive the purchase price less the aggregate deposit and rental payments previously paid to the lessor for the leased vehicle.
  2. If the manufacturer refunds the amount to the lessor or lessee, the consumer's lease agreement with the lessor shall be terminated upon payment of the refund and no penalty for early termination shall be assessed.

History. Acts 1993, No. 285, § 7; 1993, No. 297, § 7.

§ 4-90-408-Reimbursement of Towing and Rental Costs

If under this subsection, a vehicle is replaced or refunded, then, the manufacturer shall also reimburse the towing and rental costs incurred as a direct result of the nonconformity to the buyer.

History. Acts 1993, No. 285, § 10; 1993, No. 297, § 10.

§ 4-90-409-Option to Retain Use of Vehicle

According to § 4-90-409 of Arkansas lemon laws, a consumer can retain the vehicle until s/he gets a full refund or replacement from the manufacturer.

History. Acts 1993, No. 285, § 11; 1993, No. 297, § 11.

§ 4-90-410-Presumption Of Reasonable Attempts To Repair - Extension Of Time To Repair In Case Of War, Invasion, Strike, Fire, Flood, Or Natural Disaster

  1. A presumption of a number of attempts to correct nonconformity has been taken if,
    • The nonconformity is due to repair as provided in § 4-90-406(a), but the nonconformity continues to exist, or
    • The vehicle is out of service or under custody of a repairing agent for a total of thirty calendar days, or
    • There have been 5 or more repair attempts to any nonconformity conditions that impair the use and value of the motor vehicle to the consumer.
    • The thirty (30) calendar days in subsection (a)(2) of this section shall be extended due to war, invasion, strike, fire, flood, or natural disaster.
    • The manufacturer should provide the free use of a vehicle to any consumer whose vehicle is out of service beyond thirty days by reason of delayed repair as a direct result of war, invasion, strike, fire, flood, or natural disaster.
  3. The burden is on the manufacturer to show that the reason for an extension under subsection (b) of this section was the direct cause for the failure of the manufacturer to cure any nonconformity during the time of the event.

History. Acts 1993, No. 285, § 12; 1993, No. 297, § 12.

§ 4-90-411-Diagnosis or Repair - Documentation

  1. Under this subsection, a manufacturer cannot refuse to identify or repair any vehicle for the purpose of avoiding liability.
  2. According to Arkansas lemon laws,
    • It’s the responsibility of a manufacturer to provide a written repair order to the consumer each time the vehicle is brought in for repair.
    • The repair order must include all work done on the vehicle, including examination of the vehicle, parts, and labor.

History. Acts 1993, No. 285, § 13; 1993, No. 297, § 13

§ 4-90-412-Resale of Returned Nonconforming Vehicle

§ 4-90-412 of Arkansas lemon laws states that, if a manufacturer repurchases or replaces a motor vehicle, the motor vehicle may not be resold in Arkansas unless,

History. Acts 1993, No. 285, § 14; 1993, No. 297, § 14.

§ 4-90-413-Affirmative Defenses

It is an affirmative defense to the manufacture that:

History. Acts 1993, No. 285, § 15; 1993, No. 297, § 15.

§ 4-90-414-Informal Proceeding as Precedent

    1. Any manufacturer doing business in this state or offering express warranties is eligible to enter in an informal dispute settlement proceeding
    2. The provisions defined in § 4-90-406(b)(1) and (2) relating to refund or replacement do not apply to a consumer who has not first used this informal proceeding before commencing a civil action, unless the manufacturer allows a consumer to commence an action without first using this informal procedure.
      • The manufacturer should send a written notice of the existence of the procedure to the consumer
      • The notice must include the incorporation of the informal dispute settlement procedure into the terms of the written warranty to which the motor vehicle does not conform.
  2. The Consumer Protection Division of the Office of the Attorney General certifies an informal dispute procedure which should meet,
    1. The minimum requirements of the Federal Trade Commission for informal dispute settlement procedures as set forth in 16 C.F.R. § 703.1 et seq., as in effect on the date of adoption of this subchapter, unless any provision of 16 C.F.R. § 703.1 et seq. is in conflict with this subchapter, in which case the provisions of this subchapter shall govern
    2. A reasonable time, not to exceed thirty (30) days after the decision is accepted by the buyer, within which the manufacturer or its agent must fulfill the terms of its decisions.
      • No documents shall be received by any informal dispute procedure unless those documents have been provided to each of the parties in the dispute at or prior to the proceeding, with an opportunity for the parties to comment on the documents either in writing or orally.
      • During the informal dispute proceeding, a consumer can request a delay in the proceeding to review any documents which had not been presented to him before.
      • According to § 4-90-414 of Arkansas lemon laws, “the informal dispute procedure shall allow each party to appear and make an oral presentation within the State of Arkansas unless the consumer agrees to submit the dispute for decision on the basis of documents alone or by telephone, or unless the party fails to appear for an oral presentation after reasonable prior written notice”.
      • the manufacturer may not be allowed to join the dispute discussion, if the consumer chooses to submit the dispute for decision on the basis of documents alone
    5. Consumers shall be given an adequate opportunity to contest a manufacturer's assertion that nonconformity falls within intended specifications for the vehicle by having the basis of the manufacturer's claim appraised by a technical expert selected and paid for by the consumer prior to the informal dispute settlement hearing
    6. A consumer cannot be asked for a fee to participate in an informal dispute procedure
    7. Both the parties can avail the services of a lemon attorney to be represented in an informal dispute proceeding.
      • The Arkansas lemon laws allow a minimum of 6 members to be presented annually in the informal dispute procedure. This pool is appointed with the advice and consent of the Consumer Protection Division of the Office of the Attorney General.
      • Selected strictly by rotation, one (1) member shall hear disputes scheduled for a particular session unless the consumer requests a panel of three (3) members, in which case three (3) members shall hear disputes scheduled for a particular three-member session.
      • If the informal dispute procedure requires the services of an independent examiner, such person shall be selected from a pool of not less than four members who are appointed annually with the recommendation of the Consumer Protection Division of the Office of the Attorney General.
    2. Upon notification to the administrator of any informal dispute procedure that a determination has been made by the Consumer Protection Division of the Office of the Attorney General that a member of any pool is not conforming to standards of fairness and impartiality, that member shall be immediately removed from the pool.

History. Acts 1993, No. 285, § 16; 1993, No. 297, § 16.

§ 4-90-415-Enforcement - Exclusivity - Costs and Expenses

History. Acts 1993, No. 285, §§ 17-19; 1993, No. 297, §§ 17-19.

§ 4-90-416-Time Limitation for Commencement of Action

History. Acts 1993, No. 285, § 20; 1993, No. 297, § 20.

§ 4-90-417-Deceptive Trade Practices

A violation of any of the provisions of this subchapter shall be deemed a deceptive trade practice under § 4-88-101 et seq.