Chrysler Agrees to Honor Lemon Laws

Posted: June 8, 2009

Last month, Chrysler was battered by media reports that the company wasn't honoring so-called "lemon laws" - state laws requiring that an automaker buy back a vehicle from a consumer if it suffers a certain number of problems after purchase. 

Automotive News explains, "State lemon laws provide rights for customers to obtain refunds or replacement vehicles if a newly purchased vehicle develops a major problem that can't be repaired after a certain number of attempts."  All 50 states have a lemon law, though the provisions differ from state to state.

Now, Chrysler and Fiat, the Italian automaker purchasing most of its assets, have reportedly asked the court handling its financial affairs during bankruptcy to allow the company to honor state lemon laws, even as it goes through the bankruptcy process.

Autoblog reports, "Owners will be happy to know that the judge has finally approved Fiat and Chrysler honoring ‘all warranty and lemon law obligations' for cars purchased up to five years before April 30. With the ruling, those affected will also be eligible for additional costs and attorney's fees."

The agreement does not answer all questions about Chrysler's liability for vehicles built pre-bankruptcy.  Consumer Affairs notes that several consumer protection groups have filed suit to block the bankruptcy, "Claiming the deal would shield New Chrysler from injury lawsuits stemming from accidents involving existing Chrysler vehicles."

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