New Jersey Lemon Law
56:12-29 - 56:12-49, Unfair Trade Practices
New Jersey Lemon Law 56:12-29 Findings, intentions.
The Legislature finds that the purchase of a new motor vehicle
is a major, high cost consumer transaction and the inability to
correct defects in these vehicles creates a major hardship and an
unacceptable economic burden on the consumer. It is the intent of
this act to require the manufacturer of a new motor vehicle to
correct defects originally covered under the manufacturer's
warranty which are identified and reported within a specified
period. It is the further intent of this act to provide procedures
to expeditiously resolve disputes between a consumer and a
manufacturer when defects in a new motor vehicle are not corrected
within a reasonable time, and to provide to award specific remedies
where the uncorrected defect substantially impairs the use, value,
or safety of the new motor vehicle.
New Jersey Lemon Law 56:12-30 Definitions.
As used in this act:
"Consumer" means a buyer or lessee, other than for purposes of
resale or sublease, of a motor vehicle; a person to whom a motor
vehicle is transferred during the duration of a warranty applicable
to the motor vehicle; or any other person entitled by the terms of
the warranty to enforce the obligations of the warranty.
"Dealer" means a person who is actively engaged in the business
of buying, selling or exchanging motor vehicles at retail and who
has an established place of business.
"Director" means the Director of the Division of Consumer
Affairs in the Department of Law and Public Safety, or his
"Division" means the Division of Consumer Affairs in the
Department of Law and Public Safety.
"Lease agreement" means a contract or other written agreement in
the form of a lease for the use of a motor vehicle by a person for
a period of time exceeding 60 days, whether or not the lessee has
the option to purchase or otherwise become the owner of the motor
vehicle at the expiration of the lease.
"Lessee" means a person who leases a motor vehicle pursuant to a
"Lessor" means a person who holds title to a motor vehicle
leased to a lessee under a lease agreement or who holds the
lessor's rights under such an agreement.
"Lien" means a security interest in a motor vehicle.
"lien holder" means a person with a security interest in a motor
vehicle pursuant to a lien.
"Manufacturer" means a person engaged in the business of
manufacturing, assembling or distributing motor vehicles, who will,
under normal business conditions during the year, manufacture,
assemble or distribute to dealers at least 10 new motor
"Manufacturer's informal dispute settlement procedure" means an
arbitration process or procedure by which the manufacturer attempts
to resolve disputes with consumers regarding motor vehicle
nonconformities and repairs that arise during the vehicle's
"Manufacturer's warranty" or "warranty" means any warranty,
whether express or implied of the manufacturer, of a new motor
vehicle of its condition and fitness for use, including any terms
or conditions precedent to the enforcement of obligations under the
"Motor vehicle" means a passenger automobile or motorcycle as
defined in R.S.39:1-1 which is purchased or leased in the State of
New Jersey or which is registered by the Division of Motor Vehicles
in the Department of Law and Public Safety, except the living
facilities of motor homes.
"Nonconformity" means a defect or condition which substantially
impairs the use, value or safety of a motor vehicle.
"Reasonable allowance for vehicle use" means the mileage at the
time the consumer first presents the motor vehicle to the dealer or
manufacturer for correction of a nonconformity times the purchase
price, or the lease price if applicable, of the vehicle, divided by
one hundred thousand miles.
New Jersey Lemon Law 56:12-31 Report of nonconformity;
If a consumer reports a nonconformity in a motor vehicle to the
manufacturer or its dealer during the first 18,000 miles of
operation or during the period of two years following the date of
original delivery to a consumer, whichever is earlier, the
manufacturer shall make, or arrange with its dealer to make, within
a reasonable time, all repairs necessary to correct the
nonconformity. Such repairs if made after the first 12,000 miles of
operation or after the period of one year following the date of
original delivery to the consumer, whichever is earlier, shall be
paid for by the consumer, unless otherwise covered by a
manufacturer's warranty, and shall be recoverable as a cost under
section 14 of this act.
New Jersey Lemon Law 56:12-32 Refunds.
a.If, during the period specified in section 3 of this act, the
manufacturer or its dealer is unable to repair or correct a
nonconformity within a reasonable time, the manufacturer shall
accept return of the motor vehicle from the consumer. The
manufacturer shall provide the consumer with a full refund of the
purchase price of the original motor vehicle including any stated
credit or allowance for the consumer's used motor vehicle, the cost
of any options or other modifications arranged, installed, or made
by the manufacturer or its dealer within 30 days after the date of
original delivery, and any other charges or fees including, but not
limited to, sales tax, license and registration fees, finance
charges, reimbursement for towing and reimbursement for actual
expenses incurred by the consumer for the rental of a motor vehicle
equivalent to the consumer's motor vehicle and limited to the
period during which the consumer's motor vehicle was out of service
due to a nonconformity, less a reasonable allowance for vehicle
use. Nothing herein shall be construed to preclude a manufacturer
from making an offer to replace the vehicle in lieu of a refund;
except that the consumer may, in any case, reject a manufacturer's
offer of replacement and demand a refund. Refunds shall be made to
the consumer and lien holder, if any, as their interests appear on
the records of ownership maintained by the Director of the Division
of Motor Vehicles. In the event that the consumer accepts an offer
to replace the motor vehicle in lieu of a refund, it shall be the
manufacturer's responsibility to insure that any lien on the
returned motor vehicle is transferred to the replacement
b.A consumer who leases a new motor vehicle shall have the same
remedies against a manufacturer under this section as a consumer
who purchases a new motor vehicle. If it is determined that the
lessee is entitled to a refund pursuant to subsection a. of this
section, the consumer shall return the leased vehicle to the lessor
or manufacturer and the consumer's lease agreement with the motor
vehicle lessor shall be terminated and no penalty for early
termination shall be assessed. The manufacturer shall provide the
consumer with a full refund of the amount actually paid by the
consumer under the lease agreement, including any additional
charges as set forth in subsection a. of this section if actually
paid by the consumer, less a reasonable allowance for vehicle use.
The manufacturer shall provide the motor vehicle lessor with a full
refund of the vehicle's original purchase price plus any
un-recovered interest expense, less the amount actually paid by the
consumer under the agreement. Refunds shall be made to the lessor
and lien holder, if any, as their interests appear on the records
of ownership maintained by the Director of the Division of Motor
New Jersey Lemon Law 56:12-33 Presumption of inability to
correct nonconformity; written notification.
a.It is presumed that a manufacturer or its dealer is unable to
repair or correct a nonconformity within a reasonable time if,
within the first 18,000 miles of operation or during the period of
two years following the date of original delivery of the motor
vehicle to a consumer, whichever is the earlier date:
(1)Substantially the same nonconformity has been subject to
repair three or more times by the manufacturer or its dealer and
the nonconformity continues to exist; or
(2)The motor vehicle is out of service by reason of repair for
one or more nonconformities for a cumulative total of 20 or more
calendar days since the original delivery of the motor vehicle and
a nonconformity continues to exist.
b.The presumption contained in subsection a. of this section
shall apply against a manufacturer only if the manufacturer has
received written notification, by or on behalf of the consumer, by
certified mail return receipt requested, of a potential claim
pursuant to the provisions of this act and has had one opportunity
to repair or correct the defect or condition within 10 calendar
days following receipt of the notification. Notification by the
consumer shall take place any time after the motor vehicle has had
substantially the same nonconformity subject to repair two or more
times or has been out of service by reason of repair for a
cumulative total of 20 or more calendar days.
c.The two-year term and the 20-day period specified in this
section shall be extended by any period of time during which repair
services are not available to the consumer because of a war,
invasion or strike, or a fire, flood, or other natural
New Jersey Lemon Law 56:12-34 Statements to consumers.
a.At the time of purchase in the State of New Jersey, the
manufacturer through its dealer, or at the time of lease in the
State of New Jersey, the lessor, shall provide directly to the
consumer the following written statement on a separate piece of
paper, in 10-point bold-face type:
"IMPORTANT: IF THIS VEHICLE IS DEFECTIVE, YOU MAY BE ENTITLED
UNDER NEW JERSEY LAW TO A REFUND OF THE PURCHASE PRICE OR YOUR
LEASE PAYMENTS. FOR COMPLETE INFORMATION REGARDING YOUR RIGHTS AND
REMEDIES UNDER THE RELEVANT LAW, CONTACT THE NEW JERSEY DEPARTMENT
OF LAW AND PUBLIC SAFETY, DIVISION OF CONSUMER AFFAIRS."
b.Each time a consumer's motor vehicle is returned from being
examined or repaired during the period specified in section 3 of
this act, the manufacturer through its dealer shall provide to the
consumer an itemized, legible statement of repair which indicates
any diagnosis made and all work performed on the vehicle and
provides information including, but not limited to, the following:
a general description of the problem reported by the consumer or an
identification of the problem reported by the consumer or an
identification of the defect or condition; the amount charged for
parts and the amount charged for labor, if paid for by the
consumer; the date and the odometer reading when the vehicle was
submitted for repair; and the date and odometer reading when the
vehicle was made available to the consumer.
c.Failure to comply with the provisions of this section
constitutes an unlawful practice pursuant to section 2 of P.L.
1960, c. 39 (C. 56:8-2).
New Jersey Lemon Law 56:12-35 Sale, leasing of returned motor
a.If a motor vehicle is returned to the manufacturer under the
provisions of this act or a similar statute of another state or as
the result of a legal action or an informal dispute settlement
procedure, it shall not be resold or re-leased in New Jersey
(1)The manufacturer provides to the dealer or lessor and the
dealer or lessor provides to the consumer the following written
statement on a separate piece of paper, in 10-point bold-face
"IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER
BECAUSE IT DID NOT CONFORM TO THE MANUFACTURER'S WARRANTY AND THE
NONCONFORMITY WAS NOT CORRECTED WITHIN A REASONABLE TIME AS
PROVIDED BY LAW;"
(2)The dealer or lessor obtains from the consumer a signed
receipt certifying, in a conspicuous and understandable manner,
that the written statement required under this subsection has been
provided. The director shall prescribe the form of the receipt. The
dealer or lessor may fulfill his obligation to obtain a signed
receipt under this paragraph by making such a notation, in a
conspicuous and understandable manner, on the vehicle buyer order
form accompanying the sale or lease of that vehicle; and
(3)The dealer or lessor, in accordance with the provisions of
section 1 of P.L.1993, c.21 (C.39:10-9.3), notifies the Director of
the Division of Motor Vehicles in the Department of Law and Public
Safety of the sale or transfer of ownership of the motor
b.Nothing in this section shall be construed as imposing an
obligation on a dealer or lessor to determine whether a
manufacturer is in compliance with the terms of this section nor
shall it be construed as imposing liability on a dealer or lessor
for the failure of a manufacturer to comply with the terms of this
c.Failure to comply with the provisions of this section
constitutes an unlawful practice pursuant to section 2 of P.L.1960,
New Jersey Lemon Law 56:12-36 Informal dispute settlement
a.If a manufacturer has established, or participates in, an
informal dispute settlement procedure pursuant to section 110 of
Pub. L. 93-637 (15 U.S.C. s.2310) and the rules promulgated there
under, or the requirements of this section, a consumer may submit a
dispute regarding motor vehicle nonconformities to the dispute
settlement body provided by that procedure but a consumer shall not
be required to first participate in the informal dispute settlement
procedure before participating in the division's summary hearing
procedure under this act.
b.If a consumer chooses to use a manufacturer's informal dispute
settlement procedure established pursuant to this section, the
findings and decisions of the dispute settlement body shall state
in writing whether the consumer is entitled to a refund under the
presumptions and criteria set out in this act and the findings and
decisions shall be admissible against the consumer and the
manufacturer in any legal action.
c.If the dispute settlement body determines that a consumer is
entitled to relief under this act, the consumer shall be entitled
to a refund as authorized by section 4 of this act.
d.In any informal dispute settlement procedure established
pursuant to this section:
(1)Participating arbitrators shall be trained in arbitration and
familiar with the provisions of this act.
(2)Documents shall not be submitted to any dispute settlement
body unless the documents have been provided to each of the parties
in the dispute at least seven days prior to commencement of the
dispute settlement hearing. The parties shall be given the
opportunity to comment on the documents in writing or with oral
(3)No party shall participate in the informal dispute settlement
procedure unless all other parties are also present and given an
opportunity to be heard, or unless the other parties consent to
proceeding without their presence and participation.
(4)A consumer shall be given an adequate opportunity to contest
a manufacturer's assertion that a nonconformity falls within
intended specifications for the vehicle by having the basis of the
manufacturer's claim appraised by a technical expert selected and
paid for by the consumer prior to the manufacturer's informal
dispute settlement procedure. If the dispute settlement body rules
in favor of the consumer, his costs and reasonable attorney's fees
shall also be awarded.
(5)A dispute shall not be heard if there has been a recent
attempt by the manufacturer to repair a consumer's vehicle, but no
response has yet been received by the dispute settlement body from
the consumer as to whether the repairs were successfully completed.
This provision shall not prejudice a consumer's right under this
The manufacturer shall provide, and the dispute settlement body
shall consider, any relevant technical service bulletins which have
been issued by the manufacturer regarding motor vehicles of the
same make and model as the vehicle that is the subject of the
e.Any manufacturer who establishes, or participates in, an
informal dispute settlement procedure, whether it meets the
requirements of this section or not, shall maintain, and forward to
the director at six month intervals, the following records:
(1)The number of purchase price and lease price refunds
requested, the number awarded by the dispute settlement body, the
amount of each award and the number of awards satisfied in a timely
(2)The number of awards in which additional repairs or a
warranty extension was the most prominent remedy, the amount or
value of each award, and the number of awards satisfied in a timely
(3)The number and total dollar amount of awards in which some
form of reimbursement for expenses or compensation for losses was
the most prominent remedy, the amount or value of each award and
the number of awards satisfied in a timely manner; and
(4)The average number of days from the date of a consumer's
initial request to use the manufacturer's informal dispute
settlement procedure until the date of the decision and the average
number of days from the date of the decision to the date on which
performance of the award was satisfied.
New Jersey Lemon Law 56:12-37 Dispute resolution.
a.A consumer shall have the option of submitting any dispute
arising under section 4 of this act to the division for resolution.
The director may establish a filing fee, to be paid by the
consumer, fixed at a level not to exceed the cost for the proper
administration and enforcement of this act. This fee shall be
recoverable as a cost under section 14 of this act. Upon
application by the consumer and payment of any filing fee, the
manufacturer shall submit to the State hearing procedure. The
filing of the notice in subsection b. of section 5 of P.L.1988,
c.123 (C.56:12-33) shall be a prerequisite to the filing of an
application under this section.
b.The director shall review a consumer's application for dispute
resolution and accept eligible disputes for referral to the Office
of Administrative Law for a summary hearing to be conducted in
accordance with special rules adopted pursuant to the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et
seq.), by the Office of Administrative Law in consultation with the
director. Immediately upon acceptance of a consumer's application
for dispute resolution, the director shall contact the parties and
arrange for a hearing date with the Clerk of the Office of
Administrative Law. The hearing date shall, to the greatest extent
possible, be convenient to all parties, but shall be no later than
20 days from the date the consumer's application is accepted,
unless a later date is agreed upon by the consumer. The Office of
Administrative Law shall render a decision, in writing, to the
director within 20 days of the conclusion of the summary hearing.
The decision shall provide a brief summary of the findings of fact,
appropriate remedies pursuant to this act, and a specific date for
completion of all awarded remedies. The director, upon a review of
the proposed decision submitted by the administrative law judge,
shall adopt, reject, or modify the decision no later than 15 days
after receipt of the decision. Unless the director modifies or
rejects the decision within the 15-day period, the decision of the
administrative law judge shall be deemed adopted as the final
decision of the director. If the manufacturer unreasonably fails to
comply with the decision within the specified time period, the
manufacturer shall be liable for penalties in the amount of
$5,000.00 for each day the manufacturer unreasonably fails to
comply, commencing on the day after the specified date for
completion of all awarded remedies.
c.The Office of Administrative Law is authorized to issue
subpoenas to compel the attendance of witnesses and the production
of documents, papers and records relevant to the dispute.
d.A manufacturer or consumer may appeal a final decision to the
Appellate Division of the Superior Court. An appeal by a
manufacturer shall not be heard unless the petition for the appeal
is accompanied by a bond in a principal sum equal to the money
award made by the administrative law judge plus $2,500.00 for
anticipated attorney's fees and other costs, secured by cash or its
equivalent, payable to the consumer. The liability of the surety of
any bond filed pursuant to this section shall be limited to the
indemnification of the consumer in the action. The bond shall not
limit or impair any right of recovery otherwise available pursuant
to law, nor shall the amount of the bond be relevant in determining
the amount of recovery to which the consumer shall be entitled. If
a final decision resulting in a refund to the consumer is upheld by
the court, recovery by the consumer shall include reimbursement for
actual expenses incurred by the consumer for the rental of a motor
vehicle equivalent to the consumer's motor vehicle and limited to
the period of time after which the consumer's motor vehicle was
offered to the manufacturer for return under this act, except in
those cases in which the manufacturer made a comparable vehicle
available to the consumer free of charge during that period. If the
court finds that the manufacturer had no reasonable basis for its
appeal or that the appeal was frivolous, the court shall award
treble damages to the consumer. Failure of the Office of
Administrative Law to render a written decision within 20 days of
the conclusion of the summary hearing as required by subsection b.
of this section shall not be a basis for appeal.
e.The Attorney General shall monitor the implementation and
effectiveness of this act and report to the Legislature after three
years of operation, at which time a recommendation shall be made
either to continue under the procedures set forth in this act or to
make such modifications as may be necessary to effectuate the
purposes of this act.
New Jersey Lemon Law 56:12-38 Statistics.
a.The Division of Consumer Affairs shall maintain an index of
all motor vehicle disputes by make and model. The division shall,
at six-month intervals, compile and maintain statistics indicating
the record of manufacturer compliance with any settlement procedure
decisions. The statistics shall be public record.
b.A manufacturer shall provide to the division all information
on private arbitration or private buy-back programs maintained or
instituted by the manufacturer. The information shall include the
type and number of vehicles to which these programs apply and the
reasons for establishing and maintaining the programs. The
manufacturer shall provide the division with updated information at
six month intervals.
New Jersey Lemon Law 56:12-39 Decision binding.
A consumer shall not be required to participate in a
manufacturer's informal dispute settlement procedure or the
division's summary hearing procedure before filing an action in the
Superior Court. However, a decision rendered in a proceeding
brought pursuant to the division's summary hearing procedure shall
be binding on the consumer and the manufacturer, subject to the
right of appeal as set forth in subsection d. of section 9 of this
act, and shall preclude the institution of any other action in the
Superior Court under this act.
New Jersey Lemon Law 56:12-40 Affirmative defense.
It shall be an affirmative defense to a claim under this act
that the alleged nonconformity does not substantially impair the
use, value, or safety of the new motor vehicle or that the
nonconformity is the result of abuse, neglect, or unauthorized
modifications or alterations of the motor vehicle by anyone other
than the manufacturer or its dealer.
New Jersey Lemon Law 56:12-41 Pleading.
Any party to an action in the Superior Court of this State
asserting a claim, counterclaim or defense based upon violations of
this act shall mail a copy of the initial or responsive pleading
containing the claim, counterclaim or defense to the Attorney
General within 10 days after filing the pleading with the court.
Upon application to the court in which the matter is pending, the
Attorney General may intervene or appear in any status appropriate
to this matter.
New Jersey Lemon Law 56:12-42 Attorney, expert fees;
In any action by a consumer against a manufacturer brought in
Superior Court or in the division pursuant to the provisions of
this act, a prevailing consumer shall be awarded reasonable
attorney's fees, fees for expert witnesses and costs.
New Jersey Lemon Law 56:12-43 Use of funds.
All fees, penalties and costs collected by the division pursuant
to this act shall be appropriated for purposes of offsetting costs
associated with the handling and resolution of consumer automotive
New Jersey Lemon Law Law 56:12-44 Inherent design defect.
A manufacturer shall certify to the division, within one year of
discovery, the existence of any inherent design defect common to
all motor vehicles of a particular model or make. Failure to comply
with this constitutes an unlawful practice pursuant to section 2 of
P.L. 1960, c. 39 (C. 56:8-2).
New Jersey Lemon Law 56:12-45 Proceedings.
The director may institute proceedings against any manufacturer
who fails to comply with any of the provisions of this act.
New Jersey Lemon Law 56:12-46 No liability, cause of
Nothing in this act shall be construed as imposing any liability
on a dealer, or creating a cause of action by a manufacturer
against a dealer, and nothing shall be construed as imposing any
liability on a dealer, or creating a cause of action by a consumer
against a dealer under section 4 of this act.
New Jersey Lemon Law 56:12-47 No limitation on rights.
Nothing in this act shall in any way limit the rights or
remedies which are otherwise available to a consumer under any
New Jersey Lemon Law 56:12-48 Agreements void.
Any agreement entered into by a consumer for the purchase or
lease of a new motor vehicle which waives, limits or disclaims the
rights set forth in this act shall be void as contrary to public
New Jersey Lemon Law 56:12-49 Rules, regulations.
Within 120 days following enactment, the director shall, subject
to approval by the Attorney General and pursuant to the provisions
of the "Administrative Procedure Act," P.L. 1968, c. 410 (C.
52:14B-1 et seq.), adopt rules and regulations necessary to
effectuate the purposes of this act.