The Texas Lemon Law Guide for New and Used Cars

September 23rd, 2024 by Tipton Ford Brownsville

Buying a new car is always super exciting, but it can quickly turn into a nightmare if your vehicle has constant problems. Luckily, Texas has a Lemon Law to protect you if you end up with a car that just won’t get fixed. Let’s break down what the Lemon Law covers, how it works, and what you can do if you think your vehicle qualifies.

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What Is the Lemon Law in Texas?

The Texas Lemon Law, administered by the Texas Department of Motor Vehicles, is designed to help consumers who buy or lease new vehicles and have ongoing problems getting them repaired under the manufacturer’s original warranty. If your vehicle has a serious issue that affects its use, safety, or value, and the dealership can’t fix it after several tries, the Lemon Law could step in. It offers a simpler, less expensive solution than going to court.

What Does It Cover?

The Texas Lemon Law covers a range of new vehicles, including cars, trucks, vans, motorcycles, all-terrain vehicles (ATVs), motor homes, TRVs, and electric vehicles. Even demonstrator vehicles that haven’t been previously titled are treated as new under this law.

However, there are limits to what’s covered. The law doesn’t apply to repossessed vehicles, non-travel trailers, boats, or farm equipment. It also won’t cover minor issues that don’t significantly impact the vehicle’s use or resale value, like small rattles.

Does it Cover Used Vehicles?

While the Texas Lemon Law primarily covers new vehicles, there may still be protections for used vehicles under certain state laws. If your used car is still covered by the manufacturer’s original warranty—not an extended service contract—and the defect began and was reported to the dealer while that warranty was active, you could be eligible for repair assistance. This applies even if the issue persists beyond the warranty period. So, although the Lemon Law doesn’t extend to most used cars, some warranty-related protections might still apply.

How Many Chances Does the Dealer Get To Fix The Problem?

Under the Texas Lemon Law, a dealer is typically given several opportunities to fix the issue before a vehicle can be considered a lemon.

The number of attempts depends on the nature of the problem. For most issues, the dealer is allowed four tries to repair the defect. If the problem isn’t resolved after these attempts, and it significantly affects the vehicle’s use, safety, or value, the vehicle may qualify for repurchase, replacement, or additional repairs.

In some situations, fewer repair attempts are needed for a vehicle to qualify as a lemon. If the defect poses a serious safety risk—such as brake failure or issues with steering—the law only requires two repair attempts before the vehicle may be considered a lemon. This helps protect drivers from potentially dangerous defects. Additionally, if your vehicle has been out of service for 30 or more days due to repairs within the first 24 months or 24,000 miles, that could also trigger Lemon Law protections. These provisions make sure that you’re not left with an unsafe or unreliable vehicle.

How to Know If Your Car Is a Lemon

Here’s how to know if your car might be considered a lemon under the Texas Lemon Law:

Substantial Defect: The vehicle has a significant manufacturing defect that is covered by the manufacturer’s written warranty.
Reported to Dealer: The owner reports the issue to the dealer within the warranty term and allows a reasonable number of attempts to repair it.
Written Notice: The owner must provide written notice to the manufacturer about the defect, giving them at least one opportunity to resolve the issue.
Ongoing Problem: The defect continues to exist after multiple repair attempts or has caused the vehicle to be out of service for 30 or more days within the first 24 months or 24,000 miles.
Impact on Use, Value, or Safety: The problem must substantially impair the vehicle’s use, market value, or create a safety concern, such as brake or steering failure.

How To Buy A Car In Texas

How to File a Lemon Law Complaint in Texas

Filing a Lemon Law complaint in Texas is a straightforward process that starts with gathering all necessary documentation. First, make sure you have detailed records of the vehicle’s defect, repair attempts, and any communication with the dealership or manufacturer. You’ll also need to show proof that you gave the manufacturer written notice about the issue and allowed them a final chance to fix it.

Once you’re ready, you can file a complaint with the Texas Department of Motor Vehicles (DMV). The easiest way is to complete the Lemon Law complaint form on their website. Along with the form, you’ll need to provide copies of your repair orders, vehicle purchase or lease agreement, and any other relevant documents. There’s also a filing fee involved, which is typically around $35. After submitting your complaint, the DMV will review your case and may arrange a hearing to determine if your vehicle qualifies as a lemon.

What Happens If You Win?

If you win your Lemon Law case in Texas, you’ll be entitled to one of the following remedies, depending on what the Texas Department of Motor Vehicles decides.

Vehicle Repurchase: If the DMV orders a repurchase, the manufacturer will buy back your vehicle.
Vehicle Replacement: In some cases, the manufacturer may be required to replace your vehicle with a new one of the same or similar model. This gives you a fresh start with a vehicle that doesn’t have so many issues.
Additional Repairs: If the DMV finds that the defect can still be fixed, they may order the manufacturer to perform the necessary repairs at no additional cost to you.

How to Get a Refund

If the Texas Department of Motor Vehicles rules in your favor, the manufacturer is required to buy back your vehicle. The refund will include the original purchase price, along with taxes, title, and license fees. However, there will be a deduction for the use of the vehicle. This amount is calculated based on a specific formula that considers the mileage at the time of the hearing and other factors. Keep in mind that the refund won’t include any interest you’ve paid on the vehicle. You can view the formula used for this deduction on the Texas DMV Lemon Law Formula page. If you financed the vehicle, the manufacturer will pay off the remaining balance on your loan, and you’ll receive the difference between the refund amount and what’s still owed. The Texas DMV oversees the process to ensure it’s handled correctly and efficiently, so you can move forward without the burden of a faulty vehicle.