BILL ANALYSIS
SB 1718
Page 1
SENATE THIRD READING
SB 1718 (Sher)
As Amended August 30, 2000
Majority vote
SENATE VOTE :26-8
CONSUMER PROTECTION 5-0
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|Ayes:|Davis, Correa, Lempert, | | |
| |Machado, Wesson | | |
| | | | |
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SUMMARY : Expands the provisions of the lemon law to include new
motor vehicles with safety defects and vehicles used primarily
for business purposes. Specifically, this bill :
1)Allows consumers to assert the protections of the lemon law if
the same problem with the vehicle is "likely to cause death or
serious bodily injury if the vehicle is driven" and the vehicle
has been subject to repair two or more times by the
manufacturer or its agents, with the consumer at least once
directly notifying the manufacturer of the need to repair the
problem.
2)Includes within the scope of the lemon law new motor vehicles
bought or used primarily for business purposes weighing less
than 10,000 pounds.
3)Modifies the current notification process from the consumer to
an automobile manufacturer to state that the notification must
be sent "to the address, if any, specified clearly and
conspicuously by the [auto] manufacturer in the warranty or
owner's manual."
EXISTING LAW :
1)Defines a new motor vehicle as one that is bought for use
primarily for personal, family, or household purposes or for
dual use purposes (i.e., business and personal, family, or
household). Up to five dual use vehicles per registered owner
may assert the protection of the lemon law if the vehicle fits
the definition specified below.
2)States that the period within which a new motor vehicle may be
SB 1718
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presumed to be out of conformity with its express warranty (a
lemon), if the circumstances detailed in #3 below are met, is
within the first 18 months after delivery to the buyer or the
vehicle's first 18,000 miles, whichever occurs first.
3)States that a new motor vehicle may be presumed to be a lemon
if, during the time period specified in #2 above:
a) The same nonconformity has been subject to repair four or
more times by the manufacturer or its agents and the buyer
has at least once directly notified the manufacturer of the
need for repair of the nonconformity; or,
b) The vehicle is out of service by reason of repair of
nonconformities for a total of more than 30 days since
delivery of the vehicle, as specified.
FISCAL EFFECT : None
COMMENTS : According to the sponsor, Consumers for Auto
Reliability and Safety (CARS), this bill will close a "dangerous
lemon loophole" by allowing vehicles primarily used for business
purposes to gain the protections of the lemon law. The sponsor
notes that currently only personal use vehicles or dual use
vehicles (i.e., personal and business use) are provided
protection by the lemon law. CARS asserts that some
manufacturers "exploit the business use 'lemon loophole'" to
evade state laws aimed at protecting consumers from "lemon
laundering" (i.e., the undisclosed resale of defective
automobiles to unsuspecting consumers). This bill will close
that loophole.
One major provision of the bill adds a lower threshold of two
repair attempts for vehicles that are likely to cause death or
serious bodily injury if driven by the consumer. Currently, the
standard for asserting the lemon law's protections is four repair
attempts for the same problem or more than 30 days out of service
within the first 18 months or 18,000 miles, whichever comes
first. The sponsor notes that this provision will "improve
vehicle safety by reducing the number of times consumers must
experience a serious, potentially life-threatening safety problem
before they gain the benefit" of the lemon law. In order to
assert the lemon law's protections, consumers must still notify
the manufacturer of the need for repair prior to asserting the
presumption that a vehicle is a lemon.
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Representatives of most domestic and foreign automobile
manufacturers oppose the bill because they believe the two-repair
standard for safety-impaired vehicles doesn't provide sufficient
opportunity for an auto manufacturer to fix a problem that cannot
be repaired at a dealership. They also believe that the
expansion of the lemon law for up to five purely business
vehicles is premature, as 1998 legislation increasing the scope
of the lemon law from personal use to dual use has yet to be
fully evaluated.
Supporters, primarily comprised of consumer groups, attorneys and
automobile clubs, counter that it is not only unfair but
downright dangerous for consumers to have to get their new car
with a safety defect fixed four times before they can assert that
the vehicle is a lemon. They note that at least 12 other states
(i.e., Arkansas, Connecticut, Georgia, Hawaii, Iowa, Maryland,
Minnesota, Ohio, Texas, Virginia, Washington, and West Virginia)
allow auto manufacturers only one or two failed repair attempts
before the consumer can assert the vehicle is a lemon.
The August 25 amendments add a gross vehicle weight cap of 10,000
pounds to the business use provisions of the bill, and add joint
authors and coauthors.
The August 30 author's amendments modify the lemon law
notification process to require that consumers send written
notification to the manufacturer's address as specified in their
warranty or owner's manual. These amendments remove the prior
opposition of two automobile manufacturers, and have been agreed
to by the sponsor.
Analysis Prepared by : Robert Herrell / CONPRO / (916) 319-2089
FN: 0007140