North Carolina Lemon Law
Article 15A, Chapter 20, Section 351, New Motor Vehicles
North Carolina Lemon Law 20-351 Purpose.
This Article shall provide State and private remedies against
motor vehicle manufacturers for persons injured by new motor
vehicles failing to conform to express warranties.
North Carolina Lemon Law 20-351.1 Definitions.
As used in this Article:
(1)"Consumer" means the purchaser, other than for purposes of
resale, or lessee from a commercial lender, lessor, or from a
manufacturer or dealer, of a motor vehicle, and any other person
entitled by the terms of an express warranty to enforce the
obligations of that warranty.
(2)"Manufacturer" means any person or corporation, resident or
nonresident, who manufactures or assembles or imports or
distributes new motor vehicles which are sold in the State of North
(3)"Motor vehicle" includes a motor vehicle as defined in G.S.
20-4.01 which is sold or leased in this State, but does not include
"house trailer" as defined in G.S. 20-4.01 or any motor vehicle
with a gross vehicle weight of 10,000 pounds or more.
(4)"New motor vehicle" means a motor vehicle for which a
certificate of origin, as required by G.S. 20-52.1 or a similar
requirement in another state, has never been supplied to a
consumer, or which a manufacturer, its agent, or its authorized
dealer states in writing is being sold as a new motor vehicle.
North Carolina Lemon Law 20-351.2 Require repairs.
When mileage warranty begins to accrue.
(a)Express warranties for a new motor vehicle shall remain in
effect at least one year or 12,000 miles. If a new motor vehicle
does not conform to all applicable express warranties for a period
of one year, or the term of the express warranties, whichever is
greater, following the date of original delivery of the motor
vehicle to the consumer, and the consumer reports the nonconformity
to the manufacturer, its agent, or its authorized dealer during
such period, the manufacturer shall make, or arrange to have made,
repairs necessary to conform the vehicle to the express warranties,
whether or not these repairs are made after the expiration of the
applicable warranty period.
(b)Any express warranty for a new motor vehicle expressed in
terms of a certain number of miles shall begin to accrue from the
mileage on the odometer at the date of original delivery to the
North Carolina Lemon Law 20-351.3 Replacement or refund;
(a)When the consumer is the purchaser or a person entitled by
the terms of the express warranty to enforce the obligations of the
warranty, if the manufacturer is unable, after a reasonable number
of attempts, to conform the motor vehicle to any express warranty
by repairing or correcting, or arranging for the repair or
correction of, any defect or condition or series of defects or
conditions which substantially impair the value of the motor
vehicle to the consumer, and which occurred no later than 24 months
or 24,000 miles following original delivery of the vehicle, the
manufacturer shall, at the option of the consumer, replace the
vehicle with a comparable new motor vehicle or accept return of the
vehicle from the consumer and refund to the consumer the
(1)The full contract price including, but not limited to,
charges for undercoating, dealer preparation and transportation,
and installed options, plus the non-refundable portions of extended
warranties and service contracts;
(2)All collateral charges, including but not limited to, sales
tax, license and registration fees, and similar government
(3)All finance charges incurred by the consumer after he first
reports the nonconformity to the manufacturer, its agent, or its
authorized dealer; and
(4)Any incidental damages and monetary consequential
(b)When consumer is a lessee, if the manufacturer is unable,
after a reasonable number of attempts, to conform the motor vehicle
to any express warranty by repairing or correcting, or arranging
for the repair or correction of, any defect or condition or series
of defects or conditions which substantially impair the value of
the motor vehicle to the consumer, and which occurred no later than
24 months or 24,000 miles following original delivery of the
vehicle, the manufacturer shall, at the option of the consumer,
replace the vehicle with a comparable new motor vehicle or accept
return of the vehicle from the consumer and refund the
(1)To the consumer:
a.All sums previously paid by the consumer under the terms of
b.All sums previously paid by the consumer in connection with
entering into the lease agreement, including, but not limited to,
any capitalized cost reduction, sales tax, license and registration
fees, and similar government charges; and
c.Any incidental and monetary consequential damages.
(2)To the lessor, a full refund of the lease price, plus an
additional amount equal to five percent (5%) of the lease price,
less eighty-five percent (85%) of the amount actually paid by the
consumer to the lessor pursuant to the lease. The lease price means
the actual purchase cost of the vehicle to the lessor.
In the case of a refund, the leased vehicle shall be returned to
the manufacturer and the consumer's written lease shall be
terminated by the lessor without any penalty to the consumer. The
lessor shall transfer title of the motor vehicle to the
manufacturer as necessary to effectuate the consumer's rights
pursuant to this Article, whether the consumer chooses vehicle
replacement or refund.
(c)Refunds shall be made to the consumer, lessor and any lien
holders as their interests may appear. The refund to the consumer
shall be reduced by a reasonable allowance for the consumer's use
of the vehicle. A reasonable allowance for use is that amount
directly attributable to use by the consumer prior to his first
report of the nonconformity to the manufacturer, its agent, or its
authorized dealer, and during any subsequent period when the
vehicle is not out of service because of repair. "Reasonable
allowance" is presumed to be the cash price or the lease price, as
the case may be, of the vehicle multiplied by a fraction having as
its denominator 100,000 miles and its numerator the number of miles
attributed to the consumer.
(d)If a manufacturer, its agent, or its authorized dealer
resells a motor vehicle that was returned pursuant to this Article
or any other State's applicable law, regardless of whether there
was any judicial determination that the motor vehicle had any
defect or that it failed to conform to all express warranties, the
manufacturer, its agent, or its authorized dealer shall disclose to
the subsequent purchaser prior to the sale:
(1)That the motor vehicle was returned pursuant to this Article
or pursuant to the applicable law of any other State; and
(2)The defect or condition or series of defects or conditions
which substantially impaired the value of the motor vehicle to the
Any subsequent purchaser who purchases the motor vehicle for
resale with notice of the return, shall make the required
disclosures to any person to whom he resells the motor vehicle.
North Carolina Lemon Law 20-351.4 Affirmative defenses.
It is an affirmative defense to any claim under this Article
that an alleged nonconformity or series of nonconformities are the
result of abuse, neglect, odometer tampering by the consumer or
unauthorized modifications or alterations of a motor vehicle.
North Carolina Lemon Law 20-351.5 Presumption.
(a)It is presumed that a reasonable number of attempts have been
undertaken to conform a motor vehicle to the applicable express
(1)The same nonconformity has been presented for repair to the
manufacturer, its agent, or its authorized dealer four or more
times but the same nonconformity continues to exist; or
(2)The vehicle was out of service to the consumer during or
while awaiting repair of the nonconformity or a series of
nonconformities for a cumulative total of 20 or more business days
during any 12-month period of the warranty, provided that the
consumer has notified the manufacturer directly in writing of the
existence of the nonconformity or series of nonconformities and
allowed the manufacturer a reasonable period, not to exceed 15
calendar days, in which to correct the nonconformity or series of
nonconformities. The manufacturer must clearly and conspicuously
disclose to the consumer in the warranty or owners manual that
written notification of a nonconformity is required before a
consumer may be eligible for a refund or replacement of the vehicle
and the manufacturer shall include in the warranty or owners manual
the name and address where the written notification may be sent.
Provided, further, that notice to the manufacturer shall not be
required if the manufacturer fails to make the disclosures provided
(b)The consumer may prove that a defect or condition
substantially impairs the value of the motor vehicle to the
consumer in a manner other than that set forth in subsection (a) of
(c)The term of an express warranty, the one-year period, and the
20-day period shall be extended by any period of time during which
repair services are not available to the consumer because of war,
strike, or natural disaster.
North Carolina Lemon Law 20-351.6 Civil action by the Attorney
Whenever, in his opinion, the interests of the public require
it, it shall be the duty of the Attorney General upon his
ascertaining that any of the provisions of this Article have been
violated by the manufacturer to bring a civil action in the name of
the State, or any officer or department thereof as provided by law,
or in the name of the State on relation of the Attorney
North Carolina Lemon Law 20-351.7 Civil action by the
A consumer injured by reason of any violation of the provisions
of this Article may bring a civil action against the manufacturer;
provided, however, the consumer has given the manufacturer written
notice of his intent to bring an action against the manufacturer at
least 10 days prior to filing such suit. Nothing in this section
shall prevent a manufacturer from requiring a consumer to utilize
an informal settlement procedure prior to litigation if that
procedure substantially complies in design and operation with the
Magnuson-Moss Warranty Act, 15 USC 2301 et seq., and regulations
promulgated there under, and that requirement is written clearly
and conspicuously, in the written warranty and any warranty
instructions provided to the consumer.
North Carolina Lemon Law 20-351.8 Remedies.
In any action brought under this Article, the court may grant as
(1)A permanent or temporary injunction or other equitable relief
as the court deems just;
(2)Monetary damages to the injured consumer in the amount fixed
by the verdict. Such damages shall be trebled upon a finding that
the manufacturer unreasonably refused to comply with G.S. 20-351.2
or G.S. 20-351.3. The jury may consider as damages all items listed
for refund under G.S. 20-351.3;
(3)A reasonable attorney's fee for the attorney of the
prevailing party, payable by the losing party, upon a finding by
the court that:
a.The manufacturer unreasonably failed or refused to fully
resolve the matter which constitutes the basis of such action;
b.The party instituting the action knew, or should have known,
the action was frivolous and malicious.
North Carolina Lemon Law 20-351.9 Dealership liability.
No authorized dealer shall be held liable by the manufacturer
for any refunds or vehicle replacements in the absence of evidence
indicating that dealership repairs have been carried out in a
manner substantially inconsistent with the manufacturers'
instructions. This Article does not create any cause of action by a
consumer against an authorized dealer.
North Carolina Lemon Law 20-351.10 Preservation of other
This Article does not limit the rights or remedies which are
otherwise available to a consumer under any other law.