TRADE AND COMMERCE
NEW MOTOR VEHICLE ARBITRATION
357-D:3 Enforcement of Warranties.
I. Every new motor vehicle sold in this state shall conform to all applicable warranties.
II. It shall be the manufacturer's obligation under this chapter to insure that all new motor vehicles sold or leased in this state conform with the manufacturer's express warranties. The manufacturer may delegate responsibility to its agents or authorized dealers provided, however, in the event the manufacturer delegates its responsibility under this chapter to its agents or authorized dealers, it shall compensate the dealer for all work performed by the dealer in satisfaction of the manufacturer's responsibility under this chapter.
III. If a new motor vehicle does not conform to all applicable express warranties and the consumer reports the nonconformity to the manufacturer, its agent or authorized dealer during the term of the warranty, the manufacturer shall cause whatever repairs are necessary to conform the vehicle to the warranties, notwithstanding the fact that the repairs are made after the expiration of a warranty term.
IV. A manufacturer, its agent or authorized dealer shall not refuse to provide a consumer with a written repair order and shall provide to the consumer, each time the consumer's vehicle is brought in for examination or repair of a defect, a written summary of the complaint and a fully itemized statement indicating all work performed on the vehicle including, but not limited to, examination of the vehicle, parts, and labor.
V. If, after a reasonable number of attempts, the manufacturer, its agent or authorized dealer or its delegate is unable to conform the motor vehicle to any express warranty by repairing or correcting any defect or condition covered by the warranty which substantially impairs the use, market value, or safety of the motor vehicle to the consumer, the manufacturer shall, at the option of the consumer within 30 days of the effective date of the board's order, replace the motor vehicle with a new motor vehicle from the same manufacturer, if available, of comparable worth to the same make and model with all options and accessories with appropriate adjustments being allowed for any model year differences or shall accept return of the vehicle from the consumer and refund to the consumer the full purchase price or to the lessee, in the case of leased vehicles, as provided in paragraph IX. In those instances in which a refund is tendered, the manufacturer shall refund to the consumer the full purchase price as indicated in the purchase contract and all credits and allowances for any trade-in or down payment, license fees, finance charges, credit charges, registration fees, and any similar charges and incidental and consequential damages or, in the case of leased vehicles, as provided in paragraph IX. Refunds shall be made to the consumer and lienholder, if any, as their interests may appear, or to the motor vehicle lessor and lessee as provided in paragraph IX. A reasonable allowance for use shall be that amount directly attributable to use by the consumer prior to the first repair attempt and shall be calculated by multiplying the full purchase price of the vehicle by a fraction having as its denominator 100,000, or for a motorcycle, snowmobile, or OHRV with an engine size of 250 cubic centimeters or smaller 20,000, or for a motorcycle, snowmobile, or OHRV with an engine size greater than 250 cubic centimeters 40,000, and having as its numerator the number of miles that the vehicle traveled prior to the first attempt at repairing the vehicle.
VI. It shall be an affirmative defense to any claim under this chapter that an alleged nonconformity does not substantially impair the use, market value, or safety or that the nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of a motor vehicle by a consumer.
VII. It shall be presumed that a reasonable number of attempts have been undertaken to conform a motor vehicle to the applicable warranties if:
(a) The same nonconformity as identified in any written examination or repair order has been subject to repair at least 3 times by the manufacturer, it agent, or authorized dealer within the express warranty term and the same nonconformity continues to exist; or
(b) The vehicle is out of service by reason of repair of one or more nonconformities, defects, or conditions for a cumulative total of 30 or more business days during the term of the express warranty. The term of any warranty and the 30-day period shall be extended by any period of time during which repair services were not available to the consumer because of war, invasion, strike, fire, flood, or other natural disaster. If an extension of time is necessitated due to these conditions, the manufacturer shall provide for the free use of a vehicle to the consumer whose vehicle is out of service. A vehicle shall not be deemed out of service if it is available to the consumer for a major part of the day.
VIII. In order for an attempt at repair to qualify for the presumptions of this section, the attempt at repair shall be evidenced by a written examination or repair order issued by the manufacturer, its agent, or its authorized dealer. The presumptions of this section shall only apply to 3 attempts at repair evidenced by written examination or repair orders undertaken by the same agent or authorized dealer, unless the consumer shows good cause for taking the vehicle to a different agent or authorized dealer.
IX. In cases in which a refund is tendered by a manufacturer for a leased motor vehicle under paragraph V, the refund and rights of the motor vehicle lessor, lessee, and manufacturer shall be in accordance with the following:
(a) The manufacturer shall provide to the lessee the aggregate deposit and rental payments previously paid to the motor vehicle lessor by the lessee, and incidental and consequential damages, if applicable, minus a reasonable allowance for use. The aggregate deposit shall include, but not be limited to, all cash payments and trade-in allowances tendered by the lessee to the motor vehicle lessor under the lease agreement. The reasonable allowance for use shall be calculated by multiplying the aggregate deposit and rental payments made by the lessee on the motor vehicle by a fraction having as its denominator 100,000 or for a motorcycle, snowmobile, or OHRV 20,000, and having as its numerator the number of miles that the vehicle traveled prior to the first attempt to repair the vehicle.
(b) The manufacturer shall provide to the motor vehicle lessor the aggregate of the following:
(1) The lessor's actual purchase cost, less payments made by the lessee;
(2) The freight cost, if applicable;
(3) The cost for dealer or manufacturer-installed accessories, if applicable;
(4) Any fee paid to another to obtain the lease;
(5) An amount equal to 5 percent of the lessor's actual purchase cost as prescribed in subparagraph IX(b)(1). The amount in this subparagraph shall be instead of any early termination costs.
(c) The lessee's lease agreement with the motor vehicle lessor and all contractual obligations shall be terminated upon a decision of the board in favor of the lessee. The lessee shall not be liable for any further costs or charges to the manufacturer or motor vehicle lessor under the lease agreement.
(d) The motor vehicle lessor shall release the motor vehicle title to the manufacturer upon the payment by the manufacturer under the provisions of this section.
(e) The board shall give notice to the motor vehicle lessor of the lessee's filing of a request for arbitration under this chapter and shall notify the motor vehicle lessor of the date, time and place scheduled for a hearing before the board. The motor vehicle lessor shall provide testimony and evidence necessary to the arbitration proceedings. Any decision of the board shall be binding upon the motor vehicle lessor.
Source. 1991, 222:1. 1992, 282:15. 2002, 215:2, 3. 2005, 210:59, 60, eff. July 1, 2006.