Hawaii New Motor Vehicle Lemon Law

Hawaii New Motor Vehicle Express Warranty Enforcement (Lemon Law), Chapter 481i

§481I-1 - Legislative Intent

It is clearly identified by the legislature that a motor vehicle is one of the main consumer purchases but if it turns out as a lemon, then it creates a hardship for the consumer. The legislature further recognizes that a certified motor vehicle dealer is an authorized service agent of the manufacturer and that the dealer should remove the defects within a specified period of time. It is the goal of the legislature to make sure that consumers are made aware of their rights and are not refused the information, documents, or service necessary to exercise their rights.

§481i-2 - Definitions

"Business day" means a working day in which the manufacturer is normally open to carry out business transactions.

"Collateral charges" means all the additional costs incurred by the consumer to acquire a motor vehicle. It includes finance and interest charges, manufacturer-installed or agent-installed items, general excise tax, license and registration fees, title charges, and similar government charges.

"Consumer" is,

"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.

“Incidental charges" means those charges to the consumer which are directly incurred due to the nonconformity of the motor vehicle

"Lemon law rights period" is

"Lessee" means any consumer who leases a motor vehicle for 1 year or more pursuant to a written lease agreement which provides that the lessee is responsible for repairs to such motor vehicle or any consumer who leases a motor vehicle pursuant to a lease-purchase agreement.

"Motor vehicle" is,

"Nonconformity" means any defect or condition that impairs the use, value, or safety of a motor vehicle.

"Purchase price" means the cash paid to acquire an asset inclusive of any allowance for a trade-in vehicle, but excludes debt from any other transaction.

"Reasonable offset for use" means the number of miles attributable to a consumer up to the date of a settlement agreement or arbitration hearing, whichever occurs first.

"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.

"Settlement" means an agreement for repurchase or replacement of a motor vehicle between a manufacturer and a consumer which takes place after a dispute is has been resolved.

"Substantially impair" means which affects reliability of a new vehicle, or to diminish the resale value of the new motor vehicle.

[L 1992, c 314, pt of §1; am L 1998, c 197, §§1, 2; am L 2000, c 44, §1]

§481i-3 - Motor Vehicle: Express Warranties, Return

  1. If a consumer reports the nonconformity of a motor vehicle to the manufacturer within the lemon law rights period, then the manufacturer will be liable to conform the vehicle to such express warranties.
  2. If the manufacturer or repairing agent fails in removing the nonconformity of a vehicle after a reasonable number of attempts, then the consumer will be entitled for a replacement or a refund purchase price plus all collateral charges.
  3. It shall be an affirmative defense if the defect has been aroused due to abuse, neglect, or unauthorized modifications or alterations of a motor vehicle by a consumer.
  4. It shall be presumed that a reasonable number of attempts have been undertaken to conform a motor vehicle to the applicable express warranties, if, during the lemon law rights period, any of the following occurs:
    1. The manufacturer or repairing agent has tried to repair the defect at least three times but such nonconformity continues to exist
    2. The nonconformity is likely to cause death or serious bodily injury and the manufacturer has attempted the repair at least once but the defect continues to exist.
    3. The manufacturer or repairing agent has taken the vehicle for the purpose of repair for a total of thirty or more business days during the lemon law rights period.

      The lemon law rights period is conditional and could be extended due to war, invasion, strike, fire, flood or other natural disaster.

      The manufacturer will not be liable to repair the nonconformity unless he has received a written report of the nonconformity or nonconformities.

      Upon a second notice of the nonconformity, or, if the motor vehicle has been out of service by reason of repair in excess of twenty business days, the dealer shall notify the manufacturer of the nonconformity.

  5. The manufacturer or its agent is liable to provide a written statement of all the work diagnosed or done to conform the motor vehicle under the warranty including a general description of the problem reported by the consumer or an identification of the defect or condition, parts and labor supplied, the date and the odometer reading when the vehicle was submitted for repair, and the date when the vehicle was made available to the consumer. The consumer shall sign and receive a copy of the statement or repair order.
  6. Upon request from the consumer, the manufacturer, or at its option its agent, distributor, or authorized dealer, shall provide a copy of any report or computer reading regarding inspection, diagnosis, or test-drive of the consumer's motor vehicle, and shall provide a copy of any technical service bulletin related to the nonconformity issued by the manufacturer regarding the year and model of the consumer's motor vehicle as it pertains to any material, feature, component, or the performance thereof.
  7. As written in §481i-3  of Hawaii lemon laws, “the manufacturer, its agent, distributor, or authorized dealer, shall provide the consumer at the time of purchase of the motor vehicle a written notice setting forth the terms of a state certified arbitration program and a statement of the rights of the consumer under this section in plain language, the form of which has been previously reviewed and approved by the department of commerce and consumer affairs for substantial compliance with title 16, Code of Federal Regulations, part 703, as may be modified by the requirements of this chapter. The written notice must specify the requirement that written notification to the manufacturer of the motor vehicle nonconformity is required before the consumer is eligible for a refund or replacement of the motor vehicle. The notice must also include the name and address to which the consumer must send such written notification. The provision of this statement is the direct responsibility of the dealer, as that term is defined in chapter 437”.
  8. The consumer should inform the manufacturer of the defects only if the consumer has received a written notice setting forth the terms of the state certified arbitration program and a statement of the rights of the consumer as set out in subsection (g).
  9. According to Hawaii lemon laws, “where the state certified arbitration program is invoke by the consumer of a motor vehicle under express warranties, a decision resolving the dispute shall be rendered within forty-five days after the procedure is invoked. However, the failure of an arbitrator to render a decision within forty- five days because of unforeseen circumstances shall not void any subsequent decision”.

    Any decision provided resolving the dispute shall provide suitable remedies including the following:

    • Replacement motor vehicle
    • Acceptance of the motor vehicle from the consumer, refund of the full purchase price, and all collateral and incidental charges.
  10. The decision must commence within one year following expiration of the lemon law rights period.
  11. No vehicle transferred to a dealer or manufacturer by a buyer or a lessee under this chapter or by judgment, settlement, or arbitration award in this State or in another state may be sold, leased, or auctioned by any person unless:
    1. the defects of the vehicle is evidently and conspicuously disclosed by the seller and must be signed by the manufacturer and the purchaser and must be in ten-point, capitalized type, in substantially the following form:

      "IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE A DEFECT(S) COVERED BY THE MANUFACTURER'S EXPRESS WARRANTY WAS NOT REPAIRED WITHIN A REASONABLE TIME AS PROVIDED BY LAW."

    2. The defect is corrected
    3. The manufacturer would be responsible for any nonconformity if it reappears within one year or 12,000 miles after the date of resale..

§481i-4 - Arbitration Mechanism

  1. The Department of Commerce and Consumer Affairs will institute and observe a state certified arbitration program which is in substantial conformity with title 16, Code of Federal Regulations, part 703, as may be modified by this section, and shall adopt appropriate rules governing its operation.
  2. To screen, hear and monitor the consumer complaints, the director of commerce and consumer affairs may contract with an independent arbitration organization.

    The following criteria shall be considered in evaluating the suitability of independent arbitration mechanisms: capability, objectivity, experience, nonaffiliation with manufacturers of or dealers in new motor vehicles, reliability, financial stability, and fee structure.

  3. Under this section of Hawaii lemon law, “if a consumer agrees to participate in and be bound by the operation and decision of the state certified arbitration program, then all parties shall also participate in, and be bound by, the operation and decision of the state certified arbitration program. The prevailing party of an arbitration decision made pursuant to this section may be allowed reasonable attorney's fees”.
  4. Any of the disputes submitted to the arbitration program in which the consumer chooses nonbinding arbitration shall not limit the authority of any party to a subsequent trial de novo upon written demand made upon the opposing party to the arbitration within thirty calendar days after service of the arbitration award, and the award shall not be admissible as evidence at that trial. If the party demanding a trial de novo does not improve its position as a result of the trial by at least twenty-five per cent, then the court shall order that all of the reasonable costs of trial, consultation, and attorney's fees be paid for by the party making the demand.
  5. The manufacturer will pay the filing fee of the state certified arbitration program which $200 and $50 to be paid by the consumer upon initiating a case for arbitration under this section. Every final decision in favor of the consumer issued by the independent arbitration mechanism shall include within its relief the return of the $50 filing fee to the consumer. The director of commerce and consumer affairs may establish a trust fund for the purpose of administering fees and costs associated with the state certified arbitration program.
  6. according to Hawaii lemon laws, “if a manufacturer fails to timely comply with a binding decision of a state certified arbitration program, his failure shall be prima facie evidence of an unfair or deceptive act or practice under chapter 480 unless the manufacturer can prove that it attempted in "good faith" to comply, or that the failure was beyond the manufacturer's control, the result of a written agreement with the consumer, or based on an appeal filed under chapter 658A”.
[L 1992, c 314, pt of §1; am L 1996, c 185, §1; am L 2001, c 265, §4]