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Tennessee Lemon Law
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Title
55, Chapter 24
Motor
Vehicle Warranties
Tennessee Lemon Law 55-24-201. Definitions.
As used in this part, unless the context otherwise requires:
(1) "Consumer" means the purchaser (other than for purposes
of resale) or the lessee of a motor vehicle, any person to whom
such motor vehicle is transferred during the duration of an
express warranty applicable to such motor vehicle, and any other
person entitled by the terms of such warranty to enforce the
obligations of the warranty. "Consumer" does not include any
governmental entity or any business or commercial entity which
registers three (3) or more vehicles;
(2) "Lessee" means any consumer who leases a motor vehicle
pursuant to a written lease agreement by which a manufacturer's
warranty was issued as a condition of sale or which provides
that the lessee is responsible for repairs to such motor
vehicle;
(3) "Motor vehicle" means a motor vehicle as defined in
55-1-103, which is sold and subject to the registration and
certificate of title provisions in chapters 1-6 of this title in
the state of Tennessee, and classified as a Class C vehicle
according to 55-4-111. For the purposes of this part, "motor
vehicle" does not include motorized bicycles as defined in
55-8-101, motor homes as defined in 55-1-104, lawnmowers or
garden tractors, recreational vehicles or off-road vehicles and
vehicles over ten thousand (10,000) pounds gross vehicle weight;
(4) "Substantially impair" means to render a motor vehicle
unreliable or unsafe for normal operation or to reduce its
resale market value below the average resale value for
comparable motor vehicles; and
(5) "Term of protection" means the term of applicable express
warranties or the period of one (1) year following the date of
original delivery of the motor vehicle to a consumer, whichever
comes first; or, in the case of a replacement vehicle provided
by a manufacturer to a consumer under this part, one (1) year
from the date of delivery to the consumer of the replacement
vehicle.
Tennessee Lemon Law 55-24-202. Nonconforming vehicles.
Reports - Repairs.
If a new motor vehicle does not conform to all applicable
express warranties and the consumer reports the nonconformity,
defect or condition to the manufacturer, its agent or its
authorized dealer during the term of protection, the
manufacturer, its agent or its authorized dealer shall correct
the nonconformity, defect or condition at no charge to the
consumer, notwithstanding the fact that such repairs are made
after the expiration of such term. Any corrections or attempted
corrections undertaken by an authorized dealer under the
provisions of this section shall be treated as warranty work and
billed by the dealer to the manufacturer in the same manner as
other work under warranty is billed.
Tennessee Lemon Law 55-24-203. Replacement or repair of
vehicles.
Refunds - Refinancing agreements - Defenses.
(a) The manufacturer must replace the motor vehicle with a
comparable motor vehicle or accept return of the vehicle from
the consumer and refund to the consumer the full purchase price
if:
(1) The nonconformity, defect or condition substantially
impairs the motor vehicle; and
(2) The manufacturer, its agent or authorized dealer is
unable to conform the motor vehicle to any applicable express
warranty after a reasonable number of attempts.
(b) For purposes of this section:
(1) "Collateral charges" means manufacturer-installed or
agent-installed items or service charges, credit life and
disability insurance charges, sales taxes, title charges,
license fees, registration fees, any similar governmental
charges and other reasonable expenses incurred for the purchase
of the motor vehicle;
(2) "Comparable motor vehicle" means a new motor vehicle of
comparable worth to the same make and model with all options and
accessories, with appropriate adjustments being allowed for any
model year differences;
(3) "Full purchase price" means the actual cost paid by the
consumer, including all collateral charges, less a reasonable
allowance for use; and
(4)
(A) "Reasonable allowance for use" means that amount directly
attributable to use by a consumer prior to such consumer's first
report of the nonconformity to the manufacturer, agent or dealer
and during any subsequent period when the vehicle is not out of
service by reason of repair, plus a reasonable amount for any
damage not attributable to normal wear.
(B) A reasonable allowance for use shall not exceed one half
(1/2) of the amount allowed per mile by the internal revenue
service, as provided by regulation, revenue procedure or revenue
ruling promulgated pursuant to 162 of the Internal Revenue Code,
for use of a personal vehicle for business purposes, plus an
amount to account for any loss to the fair market value of the
vehicle resulting from damage beyond normal wear and tear,
unless the damage resulted from nonconformity to an express
warranty.
(c) Refunds shall be made to the consumer, and lien holder,
if any, as their interests appear. The provisions of this
section shall not affect the interests of a lien holder; unless
the lien holder consents to the replacement of the lien with a
corresponding lien on the vehicle accepted by the consumer in
exchange for the vehicle having a nonconformity, the lien holder
shall be paid in full the amount due on the lien, including
interest and other charges, before an exchange of automobiles or
a refund to the consumer is made.
(d) In instances where a vehicle which was financed by the
manufacturer or its subsidiary or agent is replaced under the
provisions of this section, the manufacturer, subsidiary or
agent shall not require the consumer to enter into any
refinancing agreement which would create any financial
obligations upon such consumer beyond those imposed by the
original financing agreement.
(e) It shall be an affirmative defense to any claim under
this part:
(1) That an alleged nonconformity does not substantially
impair a motor vehicle; or
(2) That a nonconformity is the result of abuse, neglect or
unauthorized modifications or alterations of a motor vehicle by
a consumer.
Tennessee Lemon Law 55-24-204. Leased vehicles - Refunds.
(a) In the case of a leased vehicle, refunds will be made to
the lessor and lessee as follows: The lessee will receive the
lessee cost and the lessor will receive the lease price less the
aggregate deposit and rental payments previously paid to the
lessor for the leased vehicle.
(b) For purposes of this section:
(1) "Lease price" means the aggregate of:
(A) Lessor's actual purchase cost;
(B) Freight, if applicable;
(C) Accessories, if applicable;
(D) Any fee paid to another to obtain the lease; and
(E) An amount equal to five percent (5%) of subdivision
(b)(1);
(2) "Lessee cost" means the aggregate deposit and rental
payments previously paid to the lessor for the leased vehicle
less service fees; and
(3) "Service fees" means the portion of a lease payment
attributable to:
(A) An amount for earned interest calculated on the rental
payments previously paid to the lessor for the leased vehicle at
an annual rate equal to two (2) points above the prime rate in
effect on the date of the execution of the lease; and
(B) Any insurance or other costs expended by the lessor for
the benefit of the lessee.
Tennessee Lemon Law 55-24-205. Presumptions
Term of protection - Notice to manufacturer.
(a) It shall be presumed that a reasonable number of attempts
have been undertaken to conform a motor vehicle to the
applicable express warranties, if:
(1) The same nonconformity has been subject to repair four
(4) or more times by the manufacturer or its agents or
authorized dealers, but such nonconformity continues to exist;
or
(2) The vehicle is out of service by reason of repair for a
cumulative total of thirty (30) or more calendar days during the
term of protection.
(b) The term of protection and such thirty-day period shall
be extended by any period of time during which repair services
are not available to the consumer because of a war, invasion,
strike or fire, flood or other natural disaster.
(c) It shall be the responsibility of the consumer, or the
representative of the consumer, prior to proceeding under the
provisions of 55-24-203, to give written notification by
certified mail directly to the manufacturer of the need for the
correction or repair of the nonconformity. If the address of the
manufacturer is not readily available to the consumer in the
owner's manual or manufacturer's warranty received by the
consumer at the time of purchase of the motor vehicle, such
written notification shall be mailed to an authorized dealer.
The authorized dealer shall upon receipt forward such
notification to the manufacturer. If, at the time such notice is
given, either of the conditions set forth in subsection (a)
already exists, the manufacturer shall be given an additional
opportunity after receipt of the notification, not to exceed ten
(10) days, to correct or repair the nonconformity.
Tennessee Lemon Law 55-24-206. Informal dispute settlement
procedure.
(a) If a manufacturer has established or participates in an
informal dispute settlement procedure which complies with the
provisions of Title 16, Code of Federal Regulations, Part 703,
as those provisions read on November 3, 1983, and of this part,
and causes the consumer to be notified of the procedure, the
provisions of 55-24-203 concerning refunds or replacement shall
not apply to any consumer who has not first resorted to such
procedure. The attorney general and reporter shall, upon
application, issue a determination whether an informal dispute
resolution mechanism qualifies under this section.
(b)
(1) The informal dispute settlement panel shall determine
whether the motor vehicle does or does not conform to all
applicable express warranties.
(2) If the motor vehicle does not conform to all applicable
express warranties, the informal dispute settlement panel shall
then determine whether the nonconformity substantially impairs
the motor vehicle.
(3) If the nonconformity does substantially impair the motor
vehicle, the informal dispute settlement panel shall then
determine, in accordance with this part, whether a reasonable
number of attempts have been made to correct the nonconformity.
(4) If a reasonable number of attempts have been made to
correct the nonconformity, the informal dispute settlement panel
shall determine whether the manufacturer has been given an
opportunity to repair the motor vehicle as provided in
55-24-202.
(5) If the manufacturer has been given an opportunity to
repair the motor vehicle as provided in 55-24-202, the panel
shall find that the consumer is entitled to refund or
replacement as provided in 55-24-203(a).
(6) The informal dispute settlement panel shall determine the
amount of collateral charges, where appropriate.
Tennessee Lemon Law 55-24-207. Statute of limitations.
(a) Any action brought under this part shall be commenced
within six (6) months following:
(1) Expiration of the express warranty term; or
(2) One (1) year following the date of original delivery of
the motor vehicle to a consumer, whichever is the later date.
(b) The statute of limitations shall be tolled for the period
beginning on the date when the consumer submits a dispute to an
informal dispute settlement procedure as provided in 55-24-206
and ending on the date of its decision or the date before which
the manufacturer, its agent or its authorized dealer is required
by the decision to fulfill its terms, whichever comes later.
Tennessee Lemon Law 55-24-208. Recovery of costs and expenses
- Attorneys' fees.
If a consumer finally prevails in any action brought under
this part, such consumer may be allowed by the court to recover
as part of the judgment a sum equal to the aggregate amount of
costs and expenses, including attorneys' fees based on actual
time expended, determined by the court to have been reasonably
incurred by the plaintiff for or in connection with the
commencement and prosecution of such action.
Tennessee Lemon Law 55-24-209. Copy of repair order to
consumer.
A manufacturer, its agent or authorized dealer shall provide
to the consumer, each time the consumer's vehicle is returned
from being serviced or repaired, a copy of the repair order
indicating all work performed on the vehicle, including, but not
limited to, parts and labor provided without cost or at reduced
cost because of shop or manufacturer's warranty, the date the
vehicle was submitted for repair, the date it was returned to
the consumer, and the odometer reading.
Tennessee Lemon Law 55-24-210. Election of remedies.
(a) Nothing in this part shall in any way limit the rights or
remedies which are otherwise available to a consumer under any
other law.
(b) In no event shall a consumer who has resorted to an
informal dispute settlement procedure be precluded from seeking
the rights or remedies available by law. However, if the
consumer elects to pursue any other remedy in state or federal
court, the remedy available under this part shall not be
available insofar as it would result in recovery in excess of
the recovery authorized by 55-24-203 without proof of fault
resulting in damages in excess of such recovery.
(c) Any agreement entered into by a consumer for, or in
connection with, the purchase or lease of a new motor vehicle
which waives, limits or disclaims the rights set forth in this
part shall be void as contrary to public policy. These rights
shall inure to a subsequent transferee of such motor vehicle.
Tennessee Lemon Law 55-24-211. Commencing actions against
sellers or lessors.
No action shall be commenced or maintained under the
provisions of this part against the seller or lessor of a motor
vehicle unless the seller or lessor is also the manufacturer, or
unless the manufacturer of the motor vehicle is not subject to
service of process in the state of Tennessee, or service cannot
be secured by the long-arm statutes of Tennessee, or unless the
manufacturer has been judicially declared insolvent.
Tennessee Lemon Law 55-24-212. Manufacturer's warranty -
Disclosure to purchaser.
Any business entity which purchases a fleet of new motor
vehicles, titles such motor vehicles in the business entity's
name and sells such vehicles to an individual purchaser shall
disclose in writing any remaining manufacturer's warranty on
such motor vehicles to such purchaser.
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