Warranties When Buying a Car

New Cars

Warranties and Lemon Laws

When you buy a new car there are federal laws that provide protection, such as the Magnusson Moss Warranty Act which deals with warranties and the North Carolina New Motor Vehicle Warranties Act (N.C. Gen. Stat. § 20-351). You can find a summary of the federal Magnusson Moss Warranty Act on the FTC website’s Auto Warranties and Auto Service Contracts webpage.

North Carolina’s New Motor Vehicle Warranties Act (aka the Lemon Law) provides protection if the vehicle has a problem in a portion of the car covered under the manufacturer’s warranty that occurs within the first 24 months of ownership or 24,000 miles whichever occurs first when you have provided written notice to the manufacturer. They have attempted to fix the vehicle after a “reasonable” number of attempts and failed. In those circumstances, you may be entitled to a refund of the purchase price minus a reasonable allowance for your use of the vehicle. The North Carolina Department of Justice Attorney General’s office provides a more detailed explanation of the North Carolina protections on their website’s Lemon Law webpage.

Disclosure of Damage

When buying a new car, a dealership does not have to disclose damage and/or repair to you unless it exceeds five (5) percent of the total value of the vehicle, unless you directly ask them about damage. This means you must inspect the car visually for any noticeable defect such as scratches and chips before you enter into a contract. If you notice damage to the vehicle and part of the deal is that it will be fixed, you should have that agreement in writing. The North Carolina Department of Justice Attorney General’s office provides a more detailed explanation of damage disclosure requirements on their Disclosing Car Damage webpage.

Used Cars

Warranties

NC Lemon Laws do not apply to the purchase of used cars, but used cars may still be under the manufacturer’s warranty where the manufacturer will be liable under the Magnusson Moss Warranty Act. Along with original manufacturer warranties, you may be offered to purchase a warranty from the used car seller or a third party. If you choose to purchase an extended warranty, you should examine the contract terms of that warranty very thoroughly to ensure you are not purchasing something that is almost impossible to use. The North Carolina Department of Justice Attorney General’s office provides a more detailed explanation of used car warranties on their Extended Car Warranties webpage. You can also find more information on this website on the Buying a Used Car webpage.

Disclosure of Damage

Damage more than twenty five (25%) of the value of the car must be disclosed to the buyer in writing. If the car has been damaged more than seventy five (75%) of the value of the car then the seller must disclose the vehicle as a salvage vehicle. If the vehicle has been damaged by a flood or been rebuilt then those facts must be disclosed in writing. Damage disclosures for used cars apply to every sale of a vehicle, even between private parties. The North Carolina Department of Justice Attorney General’s office provides a more detailed information on their Disclosing Car Damage webpage.

However, if the damage does not fall into one of the previously mentioned categories then it does not have to be disclosed by the seller. If you are buying a used car you should visually inspect it carefully and have it examined by a trusted mechanic. Even if the car is not damaged, it could have substantial wear that would affect your choice to purchase that particular vehicle. The North Carolina Department of Justice Attorney General’s office provides some excellent tips and insight into things to consider when buying a used car on their Buying a Used Car webpage.

If you have bought a new or used car and feel that you may have a legal issue concerning that purchase, request an appointment to discuss the matter. Every situation must be examined individually to correctly assess an individual’s rights or liabilities under the specific facts surrounding their transaction.