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Iowa Lemon Law
Iowa
Code Annotated § 322G.1 to § 322G.15
322G.1
Legislative intent.
The
general assembly recognizes that a motor
vehicle is a major consumer acquisition and
that a defective motor vehicle undoubtedly
creates a hardship for the consumer. The
general assembly further recognizes that a
duly franchised motor vehicle dealer is an
authorized service agent of the manufacturer.
It is the intent of the general assembly that
a good faith motor vehicle warranty complaint
by a consumer be resolved by the manufacturer
within a specified period of time. It is
further the intent of the general assembly to
provide the statutory procedures whereby a
consumer may receive a replacement motor
vehicle, or a full refund, for a motor
vehicle which cannot be brought into
conformity with the warranty provided for in
this chapter. However, this chapter does not
limit the rights or remedies which are
otherwise available to a consumer under any
other law.
322G.2
Definitions.
As
used in this chapter, unless the context
otherwise requires:
1.
"Collateral charges" means those
additional charges to a consumer wholly
incurred as a result of the acquisition of
the motor vehicle. For the purposes of this
chapter, collateral charges include, but are
not limited to, charges for
manufacturer-installed or agent-installed
items, earned finance charges, use taxes, and
title charges.
2.
"Condition" means a general problem
that may be attributable to a defect in more
than one part.
3.
"Consumer" means the purchaser or
lessee, other than for purposes of lease or
resale, of a new or previously untitled motor
vehicle, or any other person entitled by the
terms of the warranty to enforce the
obligations of the warranty during the
duration of the lemon law rights period.
4.
"Days" means calendar days.
5.
"Department" means the attorney
general.
6.
"Incidental charges" means those
reasonable costs incurred by the consumer,
including, but not limited to, towing charges
and the costs of obtaining alternative
transportation, which are the direct result
of the nonconformity or nonconformities which
are the subject of the claim. Incidental
charges do not include loss of use, loss of
income, or personal injury claims.
7.
"Lease price" means the aggregate
of the following:
a.
Lessor's actual purchase costs.
b.
Collateral charges, if applicable.
c.
Any fee paid to another to obtain the lease.
d.
Any insurance or other costs expended by the
lessor for the benefit of the lessee.
e.
An amount equal to state and local use taxes,
not otherwise included as collateral charges,
paid by the lessor when the vehicle was
initially purchased.
f.
An amount equal to five percent of the
lessor's actual purchase cost.
8.
"Lemon law rights period" means the
term of the manufacturer's written warranty,
the period ending two years after the date of
the original delivery of a motor vehicle to a
consumer, or the first twenty-four thousand
miles of operation attributable to a
consumer, whichever expires first.
9.
"Lessee" means any consumer who
leases a motor vehicle for one year or more
pursuant to a written lease agreement which
provides that the lessee is responsible for
repairs to the motor vehicle.
10.
"Lessee cost" means the aggregate
of the deposit and rental payments previously
paid to the lessor for the leased vehicle.
11.
"Lessor" means a person who holds
the title to a motor vehicle leased to a
lessee under a written lease agreement or who
holds the lessor's rights under the
agreement.
12.
"Manufacturer" means a person
engaged in the business of constructing or
assembling new motor vehicles or installing
on previously assembled vehicle chassis
special bodies or equipment which, when
installed, form an integral part of the new
motor vehicle, or a person engaged in the
business of importing new motor vehicles into
the United States for the purpose of selling
or distributing the new motor vehicles to new
motor vehicle dealers.
13.
"Motor vehicle" means a
self-propelled vehicle purchased or leased in
this state, except as provided in section
322G.15, and primarily designed for the
transportation of persons or property over
public streets and highways, but does not
include mopeds, motorcycles, motor homes, or
vehicles over ten thousand pounds gross
vehicle weight rating.
14.
"Nonconformity" means a defect,
malfunction, or condition in a motor vehicle
such that the vehicle fails to conform to the
warranty, but does not include a defect,
malfunction, or condition that results from
an accident, abuse, neglect, modification, or
alteration of the motor vehicle by persons
other than the manufacturer or its authorized
service agent.
15.
"Person" means person as defined in
section 714.16.
16.
"Program" means an informal dispute
settlement procedure established by a
manufacturer which mediates and arbitrates
motor vehicle warranty disputes arising in
this state.
17.
"Purchase price" means the cash
price paid for the motor vehicle appearing in
the sales agreement or contract, including
any net allowance given for a trade-in
vehicle.
18.
"Reasonable offset for use" means
the number of miles attributable to a
consumer up to the date of the third attempt
to repair the same nonconformity which is the
subject of the claim, or the first attempt to
repair a nonconformity that is likely to
cause death or serious bodily injury, or the
twentieth cumulative day when the vehicle is
out of service by reason of repair of one or
more nonconformities, whichever occurs first,
multiplied by the purchase price of the
vehicle, or in the event of a leased vehicle,
the lessor's actual lease price plus an
amount equal to two percent of the purchase
price, and divided by one hundred twenty
thousand.
19.
"Replacement motor vehicle" means a
motor vehicle which is identical or
reasonably equivalent to the motor vehicle to
be replaced, and as the motor vehicle to be
replaced would have existed without the
nonconformity at the time of original
acquisition.
20.
"Substantially impair" means to
render the motor vehicle unfit, unreliable,
or unsafe for warranted or ordinary use, or
to significantly diminish the value of the
motor vehicle.
21.
"Warranty" means any written
warranty issued by the manufacturer; or any
affirmation of fact or promise made by the
manufacturer, excluding statements made by
the dealer, in connection with the sale or
lease of a motor vehicle to a consumer, which
relates to the nature of the material or
workmanship and affirms or promises that the
material or workmanship is free of defects or
will meet a specified level of performance.
322G.3
Duties of manufacturer.
1.
At the time of the consumer's purchase or
lease of the vehicle, the manufacturer shall
provide to the consumer a written statement
that explains the consumer's rights and
obligations under this chapter. The written
statement shall be prepared by the attorney
general and shall contain a telephone number
that the consumer can use to obtain
information from the attorney general
regarding the rights and obligations provided
under this chapter.
2.
At the time of the consumer's purchase or
lease of the vehicle, the manufacturer shall
provide to the consumer the address and phone
number for the zone, district, or regional
office of the manufacturer for this state
where a claim may be filed by the consumer.
This information shall be provided to the
consumer in a clear and conspicuous manner.
Within thirty days of the introduction of a
new model year for each make and model of
motor vehicle sold in this state, the
manufacturer shall notify the attorney
general of such introduction. The
manufacturer shall also inform the attorney
general that a copy of the owner's manual and
applicable written warranties shall be
provided upon request and provide information
as to where the request should be made. The
manufacturer shall inform the attorney
general where such a request should be
directed and shall provide the copy of the
owner's manual and applicable written
warranties within five business days of a
request by the attorney general.
3.
A manufacturer or the authorized service
agent of the manufacturer shall make repairs
as necessary to conform the vehicle to the
warranty if a motor vehicle does not conform
to the warranty and the consumer reports the
nonconformity to the manufacturer or
authorized service agent during the lemon law
rights period. Such repairs shall be made
irrespective of whether they can be made
prior to the expiration of the lemon law
rights period.
4.
A manufacturer or the authorized service
agent of the manufacturer, shall provide to
the consumer, each time the motor vehicle is
returned after being examined or repaired
under the warranty, a fully itemized, legible
statement or repair order indicating any
diagnosis made, and all work performed on the
motor vehicle including, but not limited to,
a general description of the problem reported
by the consumer or an identification of the
defect or condition, parts and labor, the
date and the odometer reading when the motor
vehicle was submitted for examination or
repair, and the date when the repair or
examination was completed.
5.
Upon request from the consumer, the
manufacturer, or the authorized service agent
of the manufacturer, shall provide a copy of
either or both of the following:
a.
Any report or printout of any diagnostic
computer operation compiled by the
manufacturer or authorized service agent
regarding an inspection or diagnosis of the
motor vehicle.
b.
A copy of any technical service bulletin
issued by the manufacturer regarding the year
and model of the motor vehicle as it pertains
to any material, feature, component, or the
performance of the motor vehicle.
322G.4
Nonconformity of motor vehicles.
1.
After three attempts have been made to repair
the same nonconformity that substantially
impairs the motor vehicle, or after one
attempt to repair a nonconformity that is
likely to cause death or serious bodily
injury, the consumer may give written
notification, which shall be by certified or
registered mail or by overnight service, to
the manufacturer of the need to repair the
nonconformity in order to allow the
manufacturer a final attempt to cure the
nonconformity. The manufacturer shall, within
ten days after receipt of such notification,
notify and provide the consumer with the
opportunity to have the vehicle repaired at a
reasonably accessible repair facility and
after delivery of the vehicle to the
designated repair facility by the consumer,
the manufacturer shall, within ten days,
conform the motor vehicle to the warranty. If
the manufacturer fails to notify and provide
the consumer with the opportunity to have the
vehicle repaired at a reasonably accessible
repair facility or perform the repairs within
the time periods prescribed in this
subsection, the requirement that the
manufacturer be given a final attempt to cure
the nonconformity does not apply.
After
twenty or more cumulative days when the motor
vehicle has been out of service by reason of
repair of one or more nonconformities, the
consumer may give written notification to the
manufacturer which shall be by certified or
registered mail or by overnight service.
Commencing upon the date such notification is
received, the manufacturer has ten cumulative
days when the vehicle has been out of service
by reason of repair of one or more
nonconformities to conform the motor vehicle
to the warranty.
2.
If the manufacturer, or its authorized
service agent, has not conformed the motor
vehicle to the warranty by repairing or
correcting one or more nonconformities that
substantially impair the motor vehicle after
a reasonable number of attempts, the
manufacturer shall, within forty days of
receipt of payment by the manufacturer of a
reasonable offset for use by the consumer,
replace the motor vehicle with a replacement
motor vehicle acceptable to the consumer, or
repurchase the motor vehicle from the
consumer or lessor and refund to the consumer
or lessor the full purchase or lease price,
less a reasonable offset for use. The
replacement or refund shall include payment
of all collateral and reasonably incurred
incidental charges. The consumer has an
unconditional right to choose a refund rather
than a replacement. If the consumer elects to
receive a refund, and the refund exceeds the
amount of the payment for a reasonable offset
for use, the requirement that the consumer
pay the reasonable offset for use in advance
does not apply, and the manufacturer shall
deduct that amount from the refund due to the
consumer. If the consumer elects a
replacement motor vehicle, the manufacturer
shall provide the consumer a substitute motor
vehicle to use until such time as the
replacement vehicle is delivered to the
consumer. At the time of the refund or
replacement, the consumer, lien holder, or
lessor shall furnish to the manufacturer
clear title to and possession of the original
motor vehicle.
Refunds
shall be made to the consumer and lien holder
of record, if any, as their interests appear.
If applicable, refunds shall be made to the
lessor and lessee as follows: the lessee
shall receive the lessee's cost less a
reasonable offset for use, and the lessor
shall receive the lease price less the
aggregate deposit and rental payments
previously paid to the lessor for the leased
vehicle. If it is determined that the lessee
is entitled to a refund pursuant to this
chapter, the consumer's lease agreement with
the lessor is terminated upon payment of the
refund and no penalty for early termination
shall be assessed. The department of revenue
and finance shall refund to the manufacturer
any use tax which the manufacturer refunded
to the consumer, lessee, or lessor under this
section, if the manufacturer provides to the
department of revenue and finance a written
request for a refund and evidence that the
use tax was paid when the vehicle was
purchased and that the manufacturer refunded
the use tax to the consumer, lessee, or
lessor.
3.
It is presumed that a reasonable number of
attempts have been undertaken to conform a
motor vehicle to the warranty if, during the
lemon law rights period, any of the following
occur:
a.
The same nonconformity that substantially
impairs the motor vehicle has been subject to
examination or repair at least three times by
the manufacturer or its authorized service
agent, plus a final attempt by the
manufacturer to repair the motor vehicle if
undertaken as provided for in subsection 1,
and such nonconformity continues to exist.
b.
A nonconformity that is likely to cause death
or serious bodily injury has been subject to
examination or repair at least one time by
the manufacturer or its authorized service
agent, plus a final attempt by the
manufacturer to repair the motor vehicle if
undertaken as provided for in subsection 1,
and such nonconformity continues to exist.
c.
The motor vehicle has been out of service by
reason of repair by the manufacturer, or its
authorized service agent, of one or more
nonconformities that substantially impair the
motor vehicle for a cumulative total of
thirty or more days, exclusive of down time
for routine maintenance prescribed by the
owner's manual. The thirty-day period may be
extended by any period of time during which
repair services are not available to the
consumer because of war, invasion, strike,
fire, flood, or natural disaster.
The
terms of this subsection shall be extended
for a period of up to two years after the
date of the original delivery of a motor
vehicle to a consumer, or the first
twenty-four thousand miles of operation
attributable to a consumer, whichever occurs
first, if a nonconformity has been reported
but has not been cured by the manufacturer,
or its authorized service agent, before the
expiration of the lemon law rights period.
4.
A manufacturer, or its authorized service
agent, shall not refuse to examine or repair
any nonconformity for the purpose of avoiding
liability under this chapter.
322G.5
Affirmative defenses.
Any
of the following is an affirmative defense to
a claim under this chapter:
1.
The alleged nonconformity or nonconformities
do not substantially impair the motor
vehicle.
2.
A nonconformity is the result of an accident,
abuse, neglect, or unauthorized modification
or alteration of the motor vehicle by a
person other than the manufacturer or its
authorized service agent.
3.
The claim by the consumer was not filed in
good faith.
4.
Any other defense allowed by law which may be
raised against the claim.
322G.6
Informal dispute settlement procedures
Operations
and certification.
1.
At the time of the consumer's purchase or
lease of the vehicle, a manufacturer who has
established a program certified pursuant to
this section shall, at a minimum, clearly and
conspicuously disclose to the consumer in
written materials accompanying the vehicle
how and where to file a claim with the
program.
2.
A certified program shall be funded and
competently staffed at a level sufficient to
ensure fair and expeditious resolution of all
disputes, and shall not charge consumers any
fee for use of the program. The manufacturer
shall take all steps necessary to ensure that
a certified program and its staff and
decision makers are sufficiently insulated
from the manufacturer so that the performance
of the staff and the decisions of the
decision makers are not influenced by the
manufacturer. Such steps, at a minimum, shall
ensure that the manufacturer does not make
decisions on whether a consumer's dispute
proceeds to the decision maker. Staff and
decision makers of a certified program shall
be trained in the provisions of this chapter
and rules adopted under this chapter.
3.
A certified program shall allow an oral
presentation by a party, or by a party's
employee, agent, or representative.
Within
five days following the consumer's
notification to the certified program of the
dispute, the program shall inform each party
of their right to make an oral presentation.
Meetings
of a certified program to hear and decide
disputes shall be open to observers,
including either party to the dispute, on
reasonable and nondiscriminatory terms.
4.
A certified program shall render a decision
no later than sixty days from the day of the
consumer's notification of the dispute,
provided that a significant number of
decisions are rendered within forty days. For
the purposes of this section, notification is
deemed to have occurred when a certified
program has received the consumer's name and
address; the current date and the date of the
original delivery of the motor vehicle to a
consumer; the year, make, model, and
identification number of the motor vehicle;
and a description of the nonconformity. If
the consumer has not previously notified the
manufacturer of the nonconformity, the
sixty-day period is extended for an
additional seven days.
5.
A certified program shall, in rendering
decisions, take into account the provisions
of this chapter and all legal and equitable
factors germane to a fair and just decision.
The decision shall disclose to the consumer
and the manufacturer the reasons for the
decision, and the manufacturer's required
actions, if applicable. If the decision is in
favor of the consumer, the consumer shall
have up to twenty-five days from the date of
receipt of the certified program's decision
to indicate acceptance of the decision. The
decision shall prescribe a reasonable period
of time, not to exceed thirty days from the
date the consumer notifies the manufacturer
of acceptance of the decision, within which
the manufacturer must fulfill the terms of
the decision. If the manufacturer has had a
reasonable number of attempts to conform a
motor vehicle to the warranty as set forth in
section 322G.4, subsection 3, including a
final attempt by the manufacturer to repair
the motor vehicle, if undertaken as provided
for in section 322G.4, subsection 1, and the
consumer is entitled to a replacement vehicle
or a refund under section 322G.4, subsection
2, the decision shall be limited to relief as
allowed under section 322G.4, subsection 2.
In an action brought by a consumer under this
chapter, the decision of a certified program
is admissible in evidence.
6.
A certified program shall establish written
procedures which explain operation of the
certified program. Copies of the written
procedures shall be made available to any
person upon request and shall be sent to the
consumer upon notification of the dispute.
7.
A certified program shall retain all records
for each dispute for at least four years
after the final disposition of the dispute. A
certified program shall have an independent
audit conducted annually to determine whether
the manufacturer and its performance and the
program and its implementation are in
compliance with this chapter. All records for
each dispute shall be available for the
audit. Such audit, upon completion, shall be
forwarded to the attorney general.
8.
Any manufacturer licensed to sell motor
vehicles in this state may apply to the
attorney general for certification of its
program. A manufacturer seeking certification
of its program in this state shall submit to
the attorney general an application for
certification on a form prescribed by the
attorney general.
9.
A program certified in this state or a
program established by a manufacturer
applying for certification in this state
shall submit to the attorney general a copy
of each settlement approved by the program or
decision made by the decision maker within
thirty days after the settlement is reached
or the decision is rendered. The decision or
settlement shall contain information
prescribed by the attorney general.
10.
The attorney general shall review the
operations of any certified program at least
once annually. The attorney general shall
prepare annual and periodic reports
evaluating the operation of certified
programs serving consumers in this state or
programs established by motor vehicle
manufacturers applying for certification in
this state. The reports shall indicate
whether certification should be granted,
renewed, denied, or revoked.
11.
If a manufacturer has established a program
which the attorney general has certified as
substan
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