STANDARDS OF THE MONTANA LEMON LAW
New Motor Vehicle Warranty Act
The following is an brief explanation of most relevant provisions of the Montana lemon law. The complete text of the lemon law can be found at Mont. Code Ann. 61-4-501 et seq.
CONSUMERS COVERED
The Montana lemon law covers consumers who fall into any one of the following categories:
- 1. The purchaser, other than for purposes of resale, of a motor vehicle;
- 2. Any person to whom the motor vehicle is transferred during the duration of the vehicle's express warranty; and
- 3. Any other person entitled by the terms of the express warranty to enforce the warranty.
Note that the Montana Department of Justice, which administers the New Motor Vehicle Warranty Act, interprets this provision to include the lessee of a motor vehicle.
VEHICLES COVERED
The lemon law covers “motor vehicle” defined as a self-propelled vehicle that is sold or registered in Montana and designed primarily to transport persons or property upon the public highways, including the nonresidential portions of a motor home.
“Motor vehicle” includes a motorcycle, but excludes a truck with a G.V.W. of 10,000 pounds or more, and a vehicle with problems that are caused by the abuse, neglect, or unauthorized modification or alteration by the purchaser.
VEHICLE CONVERTERS
The lemon law applies to vehicle converters.
PROBLEMS COVERED
The lemon law covers any defect or condition that substantially impairs the use and market value or safety of the motor vehicle to the consumer. This is referred to as a nonconformity.
The lemon law provides manufacturers with an affirmative defense if it can be shown that:
- 1. The alleged nonconformity does not substantially impair the use, market value or safety of the motor vehicle; or
- 2. The nonconformity is the result of abuse, neglect, or unauthorized modification or alteration of the motor vehicle by the consumer.
PERIOD OF TIME COVERED BY MONTANA LEMON LAW
The lemon law defines the warranty period as the period ending 2 years after the date of the original delivery of a new motor vehicle to the consumer, or during the first 18,000 miles of operation, whichever is earlier.
MANUFACTURER'S DUTY TO REPAIR
If a consumer notifies in writing the manufacturer or its agent, during the lemon law warranty period, that a new motor vehicle does not conform to all applicable express warranties, the manufacturer shall repair the motor vehicle at no cost to the consumer.
The manufacturer must clearly and conspicuously disclose to the consumer in the warranty or owner’s manual that written notification of a nonconformity is required, and must provide the name and address to which such notice must be sent.
MANUFACTURER'S DUTY TO REPLACE OR REPURCHASE A MOTOR VEHICLE
If the manufacturer or its agent or authorized dealer is unable to correct a nonconformity after a reasonable number of repair attempts during the lemon law warranty period, the manufacturer must replace or repurchase the new motor vehicle.
REASONABLE NUMBER OF REPAIR ATTEMPTS
The Montana lemon law creates a presumption that a manufacturer has had a reasonable number of repair attempts if, during the lemon law warranty period, either of the following occurs:
- 1. The same nonconformity has been subject to repair four or more times by the manufacturer, or its agent or authorized dealer and the nonconformity continues to exist; or
- 2. The vehicle is out of service because of the nonconformity for a cumulative total of 30 or more business days after notification to the manufacturer, agent or dealer.
The lemon law warranty period is extended by any period of time during which repair services are not available due to war, invasion, strike, fire, flood, or other natural disaster.
NOTICE AND OPPORTUNITY TO REPAIR
The above presumption applies against a manufacturer only if the manufacturer has received prior written notification from or on behalf of the consumer and has had an opportunity to cure the defect or condition.
The manufacturer must clearly and conspicuously disclose to the consumer in the warranty or owner’s manual that written notification of a nonconformity is required before the consumer is eligible for a refund or replacement, and must provide the name and address to which such notice must be sent.
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 is certified by the Department of Justice to be in substantial compliance with the provisions of 16 C.F.R. Part 703.
If the manufacturer has not established an informal dispute settlement procedure that is certified by the Department of Justice, the consumer may bring a grievance before the Department of Justice’s arbitration procedure.
TIME PERIOD FOR FILING CLAIMS
Not specified. The Department of Justice has approved the following filing period: A claim must be filed with BBB AUTO LINE within one year after the expiration of the earlier of (1) two years after the date of the vehicle’s original delivery to a consumer, or (2) the first 18,000 miles of operation.
REMEDIES UNDER THE MONTANA LEMON LAW
REPURCHASE
The Montana lemon law provides that a manufacturer shall pay the following amounts when it repurchases a vehicle under the lemon law:
- 1. The full purchase price;
- 2. Reasonable collateral charges, meaning all governmental charges, including but not limited to sales tax, property tax, license and registration fees, and fees in lieu of tax; and
- 3. Reasonable incidental damages, meaning expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected; any commercially reasonable charges, expenses or commissions in connection with effecting cover; and any other reasonable expense incident to the breach;
- 4. Less a reasonable allowance for the consumer’s use of the vehicle.
The refund is paid to the consumer and lienholder, if any, in proportion to their interests.
The reasonable allowance for use is an amount directly attributable to use of the motor vehicle by the consumer and any previous consumers prior to the first written notice of the nonconformity to the manufacturer or its agent and during any subsequent period when the vehicle is not out of service for repair. The lemon law provides the following formula to compute the reasonable allowance for use:
number of miles the vehicle traveled prior to total
reasonable the manufacturer’s acceptance of the vehicle contract
allowance = –--------------------------------------–––––- X price of
for use 100,000 the vehicle
[Note that BBB AUTO LINE arbitrators may use the mileage at the time of the hearing in this formula instead of the mileage at the time of the manufacturer's acceptance of the vehicle's return.]
REPLACEMENT
The Montana lemon law provides that manufacturer replace the vehicle with a new motor vehicle of the same model, style and value unless for reasons of lack of availability such replacement is impossible, in which case the manufacturer shall replace it with a comparable motor vehicle. The reasonable allowance for use does not apply to a replacement.
