HB 986 -- New Motor Vehicle Warranties

Co-Sponsors:  Reid, Lowe, Johnson (61), Selby, Coleman, Hoppe

This bill revises Missouri's Lemon Law.

The time period for conforming a vehicle to the expressed
warranty under the Lemon Law will be during the term of the
express warranty, 18 months following the date of delivery, or
18,000 miles whichever comes first.  Currently, the time period
is the term of the express warranty or one year from the
delivery date, whichever comes first.

If a vehicle is not repaired, after a reasonable number of
attempts, the manufacturer at the direction of the consumer may
do one of the following:

(1)  Accept return of the vehicle and replace it with a
comparable new motor vehicle and refund any collateral cost;

(2)  Accept return of the motor vehicle and refund to the
consumer or holder of any perfected security interests the full
purchase price plus sales tax and finance charges, less a
reasonable allowance for use; or

(3)  In relation to a lessee, accept return of the motor
vehicle, refund to the lessor or any holder of a perfected
security interest the current value of the written lease and
refund the amount the consumer paid under the written lease plus
any sales tax and collateral cost, less a reasonable allowance
for use.

To receive a new vehicle or refund, the consumer must offer to
transfer title of the problem vehicle to the manufacturer.  The
manufacturer has 30 days to provide the consumer with a
comparable new vehicle or refund.  When a new vehicle or refund
is provided, the consumer must return the problem vehicle,
title, and all endorsements necessary to transfer title to the
manufacturer.

The bill establishes language providing for "adjustment
programs."  An adjustment program is an extended policy program
which a manufacturer undertakes to pay for all or any part of
the cost of repairing, or to reimburse the purchaser for all or
any part of the cost of repairing, any condition that may
substantially affect a motor vehicle's durability, reliability,
or performance.

Manufacturers will be required to:

(1)  Establish a procedure to inform the consumer of any
adjustment program applicable to a new vehicle upon request and
any documentation issued relating to any adjustment program;

(2)  Notify by first class mail any eligible consumer under an
adjustment program of the terms and conditions of the adjustment
program;

(3)  Notify dealers in writing of the terms and conditions of
any adjustment program within 30 days after the adoption of a
program; and

(4)  Establish and maintain a consumer information system by
telephone hotline or interactive web site which provides access
to all adjustment programs.

A dealer informed of any adjustment program will be required to
disclose the terms of the program to any consumer seeking
repairs for a condition covered by an adjustment program.

The bill also:

(1)  Requires that no vehicle returned as a lemon in this state
or any other state may be sold or leased in Missouri unless full
disclosure is made to any prospective buyer or lessee;

(2)  Establishes a formula for determining reasonable allowance;

(3)  Contains sales tax refund procedure language;

(4)  Establishes presumption of nonconformity when a vehicle has
been subject to repair 3 or more times and the nonconformity
still exists or when a vehicle is out-of-service for repair for
a cumulative total of 30 or more days.  The current provision is
4 or more times for repair or 30 working days;

(5)  Amends double damages to any person who prevails in an
action of any pecuniary loss due to a violation of the Lemon
Law; and

(6)  Establishes reimbursement procedures in relation to
adjustment programs.

Missouri House of Representatives
Last Updated September 13, 2001 at 2:04 pm