Montana Lemon Law
When does a Vehicle Qualify?
4 unsuccessful repair attempts of the defect or the vehicle is out of service for 30 business days within the shorter of 2 years or 18,000 miles of purchase.
Required actions and Timeline:
The owner must provide written notice to the manufacturer, who will have the opportunity to make a final repair attempt.
For a look at the strengths or weaknesses of Montana’s lemon law, see the Center for Auto Safety Letter to Montana Attorney General on Lemon Law Rank & Effectiveness.
Montana Lemon Law Statute
Montana Code Annotated, 61-4-501 to 61-4-526
For purposes of this part, the following definitions apply:
“Collateral charge” means all governmental charges, including but not limited to sales tax, property tax, license and registration fees, and fees in lieu of tax.
“Consumer” means the purchaser, other than for purposes of resale, of a motor vehicle that has not been brought into nonconformity as the result of abuse, neglect, or unauthorized modifications or alterations by the purchaser, any person to whom the motor vehicle is transferred during the duration of an express warranty applicable to the motor vehicle, or any other person entitled by the terms of the warranty to the benefits of its provisions.
“Incidental damage” means incidental and consequential damage as defined in 30-2-715.
“Manufacturer” has the meaning applied to that word in 61-4-201.
“Motor vehicle” means a vehicle, including the nonresidential portion of a motor home as defined in 61-1-130, propelled by its own power, designed primarily to transport persons or property upon the public highways, and sold in this state. The term does not include a truck with 10,000 pounds or more gross vehicle weight rating or a motorcycle as defined in 61-1-105. Motor vehicle does not include components, systems, fixtures, appliances, furnishings, accessories, and features that are designed, used, and maintained primarily for residential purposes.
“Reasonable allowance for use” is an amount directly attributable to use of the motor vehicle by the consumer and any previous consumers prior to the first written notice of the nonconformity to the manufacturer or its agent and during any subsequent period when the vehicle is not out of service because of nonconformity. The reasonable allowance for use shall be computed by multiplying the total contract price of the vehicle by a fraction having as its denominator 100,000 and having as its numerator the number of miles that the vehicle traveled prior to the manufacturer’s acceptance of its return.
“Warranty period” means the period ending 2 years after the date of the original delivery to the consumer of a new motor vehicle or during the first 18,000 miles of operation, whichever is earlier.
61-4-502. Notice — warranty enforceable after warranty period
If a consumer notifies in writing the manufacturer or its agent during the warranty period that a new motor vehicle does not conform to all applicable express warranties, the repairs necessary to conform the new motor vehicle to the express warranties shall be made by or at the expense of the warrantor, regardless of the expiration of the warranty period after notification of nonconformity is given by the consumer.
The warranty period of an express warranty is extended to equal the time that repair services are not available because of war or invasion or because of strike or fire, flood, or other natural disaster. The presumption provided herein may not apply against a manufacturer who has not received prior written notification from or on behalf of the consumer and has not had an opportunity to cure the alleged defect.
The manufacturer must clearly and conspicuously disclose to the consumer in the warranty or owner’s manual that written notification of a nonconformity is required before a consumer may be eligible for a refund or replacement of the vehicle. The manufacturer must include with the warranty or owner’s manual the name and address where the written notification must be sent.
61-4-503. Replacement for nonconformity to warranty.
If after a reasonable number of attempts the manufacturer or its agent or authorized dealer is unable, during the warranty period, to conform the new motor vehicle to any applicable express warranty by repairing or correcting any defect or condition that substantially impairs the use and market value or safety of the motor vehicle to the consumer, the manufacturer shall replace it with a new motor vehicle of the same model and style and of equal value, unless for reasons of lack of availability such replacement is impossible, in which case the manufacturer shall replace it with a vehicle of comparable market value.
As an alternative to replacement, the manufacturer may accept return of the new motor vehicle from the consumer upon refund to him of the full purchase price, plus reasonable collateral charges and incidental damages, less a reasonable allowance for the consumer’s use of the motor vehicle. The refund shall be paid to the consumer and to a lien holder, if any, in proportion to their interests.
61-4-504. Reasonable number of attempts — presumption.
A reasonable number of attempts to conform a new motor vehicle to the applicable express warranties is presumed to have been made for purposes of 61-4-503(1) if:
the same nonconformity has been subject to repair four or more times by the manufacturer or its agent or authorized dealer during the warranty period but the nonconformity continues to exist; or
the vehicle is out of service because of nonconformity for a cumulative total of 30 or more business days during the warranty period after notification of the manufacturer, agent, or dealer.
61-4-505. Dealer exemption — liability to manufacturer.
Nothing in this part imposes any liability on a dealer or creates a cause of action by a consumer against a dealer under 61-4-503.
A dealer is not liable to a manufacturer for any refunds or vehicle replacements in the absence of evidence indicating that repairs made by the dealer were carried out in a manner inconsistent with the manufacturer’s instructions.
61-4-506. Provisions nonexclusive.
The provisions of this part do not limit the rights or remedies available to a consumer under any other law.
All express warranties arising from the sale of a new motor vehicle are subject to the provisions of Title 30, chapter 2, part 3.
It is an affirmative defense to a claim brought under this part that an alleged nonconformity does not substantially impair the use, market value, or safety of the vehicle or that the nonconformity is the result of abuse, neglect, or unauthorized modification or alteration of a motor vehicle by the consumer.
61-4-507. Exhaustion of remedies under federal law.
The provisions of 61-4-503 are not applicable against a manufacturer who has established an informal dispute settlement procedure certified by the department of commerce to be in substantial compliance with the provisions of Title 16, Code of Federal Regulations, part 703, as those provisions read on October 1, 1983, unless the consumer has first resorted to that procedure without satisfaction.
61-4-511. Manufacturer’s dispute settlement procedure.
A manufacturer who has established an informal dispute settlement procedure under the provisions of Title 16, Code of Federal Regulations, part 703 (16 CFR, part 703), as those provisions read on October 1, 1983, shall submit a copy of the procedure to the department of commerce. The department of commerce shall issue a certificate of approval to a manufacturer whose procedure complies in all respects with such federal regulations and subsection (2). The department of commerce shall report to the department of justice all manufacturer’s procedures certified. The department of commerce may issue subpoenas requiring the attendance of witnesses and the production of records, documents, or other evidence necessary to it in an investigation related to the certification of a manufacturer’s informal dispute settlement procedure.
A manufacturer’s informal dispute settlement procedure must afford the consumer or his representative an opportunity to appear and present evidence in Montana at a location reasonably convenient to the consumer and, further, may not include any practices that:
(a) delay a decision in any dispute beyond 60 days after the date on which the consumer initially resorts to the dispute settlement procedure;
(b) delay performance of remedies awarded in a settlement beyond 10 days after a decision, except that a manufacturer may have 30 days following the date of decision to replace a motor vehicle or make refund to the consumer as provided in 61-4-503;
(c) require the consumer to make the vehicle available for inspection by a manufacturer’s representative more than once;
(d) fail to consider in decisions any remedies provided by this part; or
(e) require the consumer to take any action or assume any obligation not specifically authorized under the federal regulations referred to in subsection (1).
61-4-512. Annual audit
A manufacturer establishing an informal dispute resolution procedure shall file with the department of commerce a copy of the annual audit required under Title 16, Code of Federal Regulations, part 703 (16 CFR, part 703), as those provisions read on October 1, 1983, along with any additional information the department of commerce may require, including the number of refunds and replacements made by the manufacturer during the period audited.
The department of commerce may, after notice and hearing as provided in Title 2, chapter 4, suspend or revoke the certification of a manufacturer’s informal dispute resolution procedure upon a finding that the procedure is being used to create hardship to consumers. The department of commerce shall notify the department of justice of any revocation or suspension of a certification. The department of justice may consider the revocation or suspension in licensing manufacturers under Title 61, chapter 4, part 2.
61-4-515. Arbitration procedure.
The department of commerce shall provide an independent forum and arbitration procedure for the settlement of disputes between consumers and manufacturers of motor vehicles that do not conform to all applicable warranties under the provisions of this part. The procedure must conform to Title 27, chapter 5. All arbitration shall take place in Montana at a place reasonably convenient to the consumer.
Except as provided in 61-4-520, a consumer owning a motor vehicle that fails to conform to all applicable warranties may bring a grievance before an arbitration panel only if the manufacturer of the motor vehicle has not established an informal dispute settlement procedure which has been certified by the department of commerce under 61-4-511.
61-4-516. Composition of arbitration panel.
An arbitration panel hearing a grievance under this part must consist of three members. one member must be chosen by the consumer, one member must be chosen by the manufacturer, and one member must be chosen by mutual agreement of the parties. The department of commerce may maintain a list of persons willing to serve on panels from which the third member may be chosen.
61-4-517. Implementation of arbitration.
A consumer may initiate a request for arbitration by filing a notice with the department of commerce. The consumer shall file, on a form prescribed by the department of commerce, any information considered relevant to the resolution of the dispute and shall return the form, along with a $50 filing fee, within 5 days after receiving it. The complaint form must offer the consumer the choice of presenting any subsequent testimony orally or in writing, but not both.
The department of commerce shall determine whether the complaint alleges the violation of any applicable warranty under this part. If the department of commerce determines that a complaint does not allege a warranty violation, it must refund the filing fee.
Upon acceptance of a complaint, the department of commerce shall notify the manufacturer of the filing of a request for arbitration and shall obtain from the manufacturer, on a form prescribed by the department of commerce, any information considered relevant to the resolution of the dispute. The manufacturer must return the form within 15 days of receipt, with a filing fee of $250.
Fees collected under this section shall be deposited in a special revenue fund for the use of the department of commerce in administering this part.
The manufacturer’s fee provided in subsection (3) is due only if the department of commerce arbitration procedures are utilized.
The department of commerce shall investigate, gather, and organize all information necessary for a fair and timely decision in each dispute. The department of commerce may, on behalf of the arbitration panel, issue subpoenas to compel the attendance of witnesses and the production of documents, papers, and records relevant to the dispute.
If requested by the panel, the department of commerce may forward a copy of all written testimony and documentary evidence to an independent technical expert certified by the national institute of automotive excellence. The expert may review the material and be available to advise and consult with the panel. The expert may sit as a nonvoting member of the panel whenever oral testimony is presented. The department of justice may suggest an expert at the request of the department of commerce.
61-4-519. Action by arbitration panel
The arbitration panel shall, as expeditiously as possible, but not later than 60 days after the department of commerce has accepted a complaint, render a fair decision based on the information gathered and disclose its findings and its reasoning to the parties.
The decision shall provide appropriate remedies, including but not limited to:
(a) repair of the vehicle;
(b) replacement of the vehicle with an identical vehicle or a comparable vehicle acceptable to the consumer;
(c) refund as provided in 61-4-503(2);
(d) any other remedies available under the applicable warranties or 15 U.S.C. 2301 through 2312, as in effect on October 1, 1983; or
(e) reimbursement of expenses and costs to the prevailing party.
The decision shall specify a date for performance and completion of all awarded remedies. The department of commerce shall contact the prevailing party within 10 working days after the date for performance to determine whether performance has occurred. The parties shall act in good faith in abiding by any decision. In addition, if the decision is not accepted, the parties shall follow the provisions of Title 27, chapter 5. If it is determined by the court that the appellant has acted without ood cause in bringing an appeal of an award, the court, in its discretion, may grant to the respondent his costs and reasonable attorney fees.
61-4-520. Nonconforming procedure.
A consumer injured by the operation of any procedure that does not conform with procedures established by a manufacturer pursuant to 61-4-511 and the provisions of Title 16, Code of Federal Regulations, part 703, as in effect on October 1, 1983, may appeal any decision rendered as the result of such a procedure by requesting arbitration de novo of the dispute by a department of commerce panel. Filing procedures and fees for appeals must be the same as those required in 61-4-515 through 61-4-517. The findings of the manufacturer’s informal dispute settlement procedure are admissible in evidence at the department of commerce arbitration panel hearing and in any civil action arising out of any warranty obligation or matter related to the dispute.
61-4-525. Notice on resale of replaced vehicle.
A motor vehicle which is returned to the manufacturer and which requires replacement or refund may not be sold in the state without a clear and conspicuous written disclosure of the fact that the vehicle was returned. The department of justice may prescribe by rule the form and content of the disclosure statement and a procedure by which the disclosure may be removed upon a determination that the vehicle is no longer defective.
61-4-526. Records of disputes.
The department of commerce shall maintain records of each dispute as it determines, including an index of disputes by brand name and model. The department of commerce shall, at intervals of no more than 6 months, compile and maintain statistics indicating the record of compliance with arbitration decisions and the number of refunds or replacements awarded. A copy of the statistical summary must be filed with the department of justice and must be considered by it in determining the issuance of any manufacturer license required under Title 61, chapter 4, part 2.