325F.665 - Minnesota Lemon Laws for New Motor Vehicles

325F.665 - New Motor Vehicle Warranties; Manufacturer's Duty to Repair, Refund, or Replace

Subdivision 1 – Definitions

  1. "Consumer" is,
    • A buyer who buys a motor vehicle not to resale but to fulfill personal, family, or household needs
    • A person to whom the new motor vehicle is transferred during the express warranty period
  2. "Manufacturer" is,
    • A person or a firm engaged in the business of manufacturing, importing or assembling motor vehicles.
    • A person, who manufactures, assembles or distributes a minimum of 10 vehicles in a year.
  3. "Manufacturer’s express warranty" and "warranty" is a written warranty offered at the time of sale of a vehicle which includes any terms or conditions patterned to the enforcement of obligations under the warranty.
  4. "Lease" is a contract granting use or holding of a property during a specified time for a specified payment.
  5. "Motor vehicle" means
    • A passenger automotive as defined in section 168.011, subdivision 7, which also includes pickup trucks and vans
    • An automotive chassis or van portion of recreational vehicle sold or leased within the state as defined in section 168.011, subdivision 25
  6. "Informal dispute settlement mechanism" is an arbitration procedure to resolve issues between a consumer and a manufacturer regarding the nonconformities of a motor vehicle arising within the warranty period.
  7. "Motor vehicle lessor" is a person
    • Holding title to a motor vehicle leased under a written lease contract
    • Holding the lessor's rights under such agreement
  8. "Early termination costs" means expenses and commitments incurred by a lessor on account of an early termination of a lease contract and return of a motor vehicle to a manufacturer under subdivision 4.

Subd. 2 - Manufacturer's Duty to Repair

If a new motor vehicle turns out as defective or does not conform to the express warranties, and the consumer notifies the defect to the manufacturer within the term of express warranties, or during 2 years, then the manufacturer will be liable for making the repairs and conforming the vehicle to all express warranties, in spite of the fact that such repairs are made after the expiration of such term or such 2 year period.

Subd. 3 - Manufacturer's Duty to Refund or Replace

  1. If, after a reasonable number of attempts, the manufacturer is unsuccessful in determining or removing the defects which directly affects the use or value of the motor vehicle, then it becomes obligatory to the manufacturer to either replace the new motor vehicle with an equivalent automotive or refund the full purchase price, including the cost of modifications made by the manufacturer during 30 days of the delivery of a vehicle plus sales or excise tax, license fees and registration fees, reimbursement for towing and rental vehicle expenses incurred by the consumer less a reasonable allowance for the consumer's use not over and above 10 cents per mile driven or 10% of the purchase price, whichever is fewer. The consumer has the right to reject a replacement if s/he like to have a refund.

    It shall be an affirmative defense to any claim under this section that,

    • The defect doesn’t affects the use or market value,
    • Nonconformity is due to abuse, neglect, or unauthorized modifications or alterations of a motor vehicle by the consumer.
  2. It shall be acknowledged that a reasonable number of attempts have been made to remove the defects if:
    • The manufacturer has repaired the same nonconformity 4 or more times during the 2 year of the delivery of a motor vehicle but the defect still exists.
    • The vehicle is out of order or in custody of a manufacturer for a cumulative of 30 days within the warranty period or 2 year period whichever comes earlier but the defect still exists.
  3. If the nonconformity is due to failure of the braking or steering system of the new motor vehicle and can result in death or serious bodily injury and the manufacturer has attempted the repair at least once during the warranty period or within two years of the delivery of the new motor vehicle but the nonconformity still exist.
  4. The period of repairs shall be extended anytime due to war, invasion, strike, fire, flood, or other natural disaster.
  5. The consumer should inform the manufacturer about the nonconformity of a motor vehicle through a written notification. If the notice is received by the dealer, then it’s the duty of such dealer to forward it to the manufacturer by certified mail, return receipt requested.
  6. Nothing in this chapter shall restrict a consumer from receiving a refund or replacement, if the consumer has reported the defect to the manufacturer within the term of the applicable express warranty.
  7. At the time of purchase or lease, the manufacturer must provide directly to the consumer a written statement on a separate piece of paper, in 10-point all capital type, in substantially the following form:

    "IMPORTANT: IF THIS VEHICLE IS DEFECTIVE, YOU MAY BE ENTITLED UNDER THE STATE'S LEMON LAW TO REPLACEMENT OF IT OR A REFUND OF ITS PURCHASE PRICE OR YOUR LEASE PAYMENTS. HOWEVER, TO BE ENTITLED TO REFUND OR REPLACEMENT, YOU MUST FIRST NOTIFY THE MANUFACTURER, ITS AGENT, OR ITS AUTHORIZED DEALER OF THE PROBLEM IN WRITING AND GIVE THEM AN OPPORTUNITY TO REPAIR THE VEHICLE. YOU ALSO HAVE A RIGHT TO SUBMIT YOUR CASE TO THE CONSUMER ARBITRATION PROGRAM WHICH THE MANUFACTURER MUST OFFER IN MINNESOTA."

  8. As stated in Minnesota lemon laws, “the amount of the sales or excise tax to be paid by the manufacturer to the consumer under paragraph (a) shall be the tax paid by the consumer when the vehicle was purchased less an amount equal to the tax paid multiplied by a fraction, the denominator of which is the purchase price of the vehicle and the numerator of which is the allowance deducted from the refund for the consumer's use of the vehicle”.

Subd. 4 - Manufacturer's Duty to Consumers with Leased Vehicles

The rights of a leased motor vehicle consumer are same as the rights of a consumer who buys a new motor vehicle, but, if it is clarified that the manufacturer must allow return of the leased vehicle pursuant to subd. 3, then the lessee is entitled for a refund not for a replacement vehicle. The manufacturer shall refund full purchase price plus any early termination costs, not to exceed 15% of the vehicle's original purchase price, less the amount actually paid by the consumer on the written lease.

Subd. 5 - Resale or Re-Lease of Returned Motor Vehicle

  1. A returned motor vehicle may not be resold or re-leased in this state unless:
    • the manufacturer offers the same warranty it provided to the original purchaser, except that the term of the warranty need only last for 12,000 miles or 12 months after the date of resale, whichever is earlier
    • the manufacturer provides a statement in writing to the consumer on a separate piece of paper, in 10-point all capital type, in substantially the following form:

      "IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT CONFORM TO THE MANUFACTURER'S EXPRESS WARRANTY AND THE NONCONFORMITY WAS NOT CURED WITHIN A REASONABLE TIME AS PROVIDED BY MINNESOTA LAW."

  2. The motor vehicle may not be resold in this state, if a new motor vehicle has been returned under the provisions of subdivision 3 due to failure of the braking or steering system of the motor vehicle likely to cause death or serious bodily.

Subd. 6 - Alternative Dispute Settlement Mechanism

  1. According to Minnesota lemon laws, “any manufacturer doing business in this state, entering into franchise agreements for the sale of its motor vehicles in this state, or offering express warranties on its motor vehicles sold or distributed for sale in this state shall operate, or participate in, an informal dispute settlement mechanism located in the state of Minnesota which complies with the provisions of the Code of Federal Regulations, title 16, part 703, and the requirements of this section. The provisions of subdivision 3 concerning refunds or replacement do not apply to a consumer who has not first used this mechanism before commencing a civil action, unless the manufacturer allows a consumer to commence an action without first using this mechanism”.
  2. The information regarding informal dispute settlement mechanism as approved by the attorney general must be provided to the consumer and to each person who will arbitrate the consumer's dispute.
  3. If, under subdivision 3, it is determined that a consumer shall get either a replacement vehicle or a refund. The refund or replacement shall comprise of and itemize all amounts authorized by subd. 3. If the excise tax amount is not individually stated, or if the manufacturer applies for a refund after one year of the return of the motor vehicle, then the public safety department may refund the excise tax to the consumer, if any, as their interests appear on the records of the registrar of motor vehicles.
  4. It is clearly stated in Minnesota lemon laws that, “no documents shall be received by any informal dispute settlement mechanism unless those documents have been provided to each of the parties in the dispute at or prior to the mechanism's meeting, with an opportunity for the parties to comment on the documents either in writing or orally. If a consumer is present during the informal dispute settlement mechanism's meeting, the consumer may request postponement of the mechanism's meeting to allow sufficient time to review any documents presented at the time of the meeting which had not been presented to the consumer prior to the meeting”.
  5. The informal dispute settlement mechanism shall permit each party to come out and compose an oral presentation in the state of Minnesota unless the consumer concurs to submit the dispute for finding on the ground of documents alone or by telephone, or unless the party fails to appear for an oral presentation after reasonable prior written notice. If the consumer agrees to submit the dispute for decision on the basis of documents alone, then manufacturer may not participate in the discussion or decision of the dispute.
  6. Consumers shall have a chance to compete a manufacturer’s allegation that the defect comes within planned specifications for the vehicle by having the ground of the manufacturer's allege judged by a technical authority selected and paid for by the consumer for the informal dispute settlement prosecution.
  7. It is the duty of a manufacturer to present the technical service bulletin to the consumer at reasonable cost to the consumer, if the technical service bulletin straightforwardly relates to the specific mechanical problem. The mechanism shall analyze any such technical service bulletins submitted by either party.
  8. A consumer has to pay a participation fee which may not go beyond the conciliation court filing fee in the county where the arbitration is conducted.
  9. The parties can hire an attorney to be represented in an informal dispute settlement mechanism.
  10. The informal dispute settlement mechanism has all the evidence-gathering powers granted an arbitrator under section 572.14.
  11. A judgment of an informal dispute settlement mechanism must be in writing and signed.

Subd. 7 - Effect and Admissibility of Decision by Informal Dispute Settlement Mechanism

The judgment of the arbitrator is nonobligatory to the parties involved, unless otherwise agreed by the parties. Both the parties are entitled to take the decision to the district court to re-begin a trial within 30 days otherwise the court shall issue an order verifying the decision.

Subd. 8 - Treble Damages for Bad Faith Appeal of Decision

If a party has filed a case in district court in bad faith to assert a claim or defense that is playful and costly to the other party, then the court shall grant to the prevailing party 3 times the actual damages sustained, together with costs and disbursements, including reasonable attorney's fees.

Subd. 9 - Civil Remedy

Any consumer wounded by a breach of this section may claim to recover costs and disbursements, including reasonable attorney's fees.

Subd. 10 - Limitation on Actions

All the actions brought under this section must be initiated within 3 years from the date of delivery of an automotive, but if the consumer pertains to an informal dispute settlement mechanism within 3 years after the delivery, and if the consumer is upset by the judgment, then the civil action must be instigated within 6 months after the date of the final finding by the mechanism.

Subd. 11 - Remedy Nonexclusive

This section doesn’t limit the rights or cures available to a consumer under any other law.

Subd. 12 - Disclosure Requirement

Besides any analytical powers certified by law, the attorney general also has the right to inspect the records of the informal dispute settlement mechanism upon appropriate notice, and may make accessible to the public, but data on an individual may not be disclosed without the prior consent of the individual.

Subd. 13 - Dealer Liability

This section does not impose any restrictions on a dealer or creates any other ground of action by a consumer against a dealer, but for written warranties offered by the dealer apart from the manufacturer's warranties. The manufacturer has no right to ask a dealer for any reimbursement, including, any refunds or vehicle replacements, incurred by the manufacturer arising out of this section, unless there is a proof that such repairs had not been made by the dealer in a well-timed manner.