November 7, 2002
Honorable Patricia A. Madrid
Attorney General of New Mexico
Bataan Memorial Building, Room 260
Santa Fe, NM 87501
Dear Attorney General Madrid:
The Center for Auto Safety has just completed a study of the lemon law in every state and the District of Columbia and has ranked each state based on the results. New Mexico has one of the weakest lemon laws in the country and finished 48th out of 51. With over 100,000 lemons bought back each year, a strong lemon law is vital to consumer protection. States with strong lemon laws force the auto companies to take back their lemons. States with weak lemon laws force consumers to eat their lemons.
The ranking was based on 10 different categories corresponding to fundamental elements of a strong lemon law, with each category worth a maximum of 10 points for a total of 100 points. The categories are:
1. number of repair attempts or days out of service before an automobile was considered a lemon,
2. whether law had a safety lemon provision and how protective it was,
3. the length of the presumption period or coverage of the lemon law,
4. whether law had a garden variety lemon provision to cover multiple different problems,
5. the offset for use of the car when determining a refund price,
6. if the consumer is eligible for a civil penalty or double or treble damages,
7. types of vehicles covered,
8. is there a state run arbitration program,
9. is the consumer compensated for their attorney fees, and
10. whether refund reimburses consumer for all costs of purchasing and owning lemon
Points were deducted for provisions that negated major rights under the lemon law including whether consumer (1) was liable for manufacturer's attorney fees, (2) lost rights under other laws, (3) had to file lemon lawsuit within short time, and (4) had to resort to manufacturer's unfair arbitration program before filing lemon lawsuit.
New Mexico's lemon law is so bad consumers don't use it. It (1) lacks a safety lemon provision requiring auto companies to buy back or replace safety lemons after one unsuccessful repair attempt for a defect that threatens death or serious bodily injury, (2) lacks a garden variety lemon provision covering repairs for multiple different problems, (3) forces consumers to resort to mandatory arbitration through biased auto company arbitration before they can exert their legal lemon rights, (4) causes the consumer to lose their right to pursue a claim under the UCC, (5) does not provide a civil penalty for auto manufacturers who willfully violate the lemon law, and (6) limits the refund to purchase price and governmental fees and fails to include other lemon costs such as interest, incidental and consequential damages, alternate transportation and finance charges and (7) mandates award of attorney fee's to auto makers. Even though this is limited to actions brought in bad faith, the threat of having to pay an expensive corporate law firm deters consumers from exercising their legal rights Examples of stronger provisions from other states are contained in the attached “Best State Lemon Law Provisions.”
We urge you to review this survey and use your authority to help improve New Mexico's lemon law.
Clarence M. Ditlow