‘Lemon law’ must also cover EVs and connected-vehicles

 

With a price war going on in the new car market, with even the likes of Honda and Toyota giving discounts for their top sellers, there has been a growing need for a specific law to protect car buyers.

There are many horror stories of Malaysian hire-purchase car buyers suffering the fate of being deprived of transport while their new cars were stuck for months in workshops.

California, in the United States, has a “lemon law” covering defective vehicles, by which a buyer may be entitled to a full refund for a vehicle with major defects, such as intermittent engine failure, under specific circumstances.

How California does it

Here’s a breakdown of when the entitlement to a refund arises.

The vehicle must be a new car or a used car still under warranty. The law typically applies to vehicles that are purchased or leased for personal, family, or household use.

There must be a serious defect covered under the manufacturer’s warranty which significantly impairs the use, value, or safety of the vehicle.

The car buyer must give the manufacturer or dealer a reasonable number of attempts to repair the defect. Generally, this means at least two to four attempts for a defect that is likely to cause death or serious bodily harm.

Alternatively, if the vehicle is out of service for more than 30 days for repairs, this can also qualify.

The buyer must notify the manufacturer of the defect, typically in writing and as soon as possible upon detection of defect, and request a repair.

This is where many Malaysian car buyers often fail. Usually, they will accept verbal commitments at face value. It’s crucial that they keep detailed written records of all repair attempts, communications with the manufacturer, and any resulting inconveniences caused by the defects

Going back to California’s lemon law, if the defect remains unresolved after a reasonable number of attempts, the buyer may seek remedies. If the conditions are met, the buyer may be entitled to a full refund of the purchase price or a replacement vehicle.

Unlucky buyer’s happy ending

Coming back to Malaysia and to balance the narrative of buyers ending up with sour feelings (that’s why a defective car is called a lemon), there’s one, and only one story, where the car buyer ended up pleased.

This case was of a customer who bought a onn-German continental car still under warranty from a second-hand car dealer. The car kept breaking down and he sent it to the dealership which tried but ultimately failed to repair the engine after keeping it in the workshop for many months.

In the meantime, the owner was given the use of a loan car that he liked because it was almost as new as his own and was a more premium model.

When we met recently, he was cheerful and shared the good news that the car company had given him the loan car and returned his own vehicle which couldn’t be fixed, with a cash compensation of RM15,000.

Was it goodwill? Not completely, according to Paul David, a veteran manager of a franchise workshop.

“If there was a failure of any component due to a manufacturing or technical defect during the period of warranty, the seller is obliged to either fix or replace the component to its original performance,” he says.

From his experience, David adds that the solution to a problem does not necessarily mean that it must go to court, with all the associated legal costs.

“The government can institute an arbitration process where complaints can be heard by a tribunal composed of knowledgeable persons from the trade, with all hearings being purely technical, without legal counsel allowed to make arguments.

“The tribunal’s decisions shall be final. If only the relevant issues are discussed, there is a possibility of a solution. But when there are lawyers involved, most times the final solution will be costly,” he says.

Lemon law must spread its net

Andrew Suresh, a practising lawyer and a car enthusiast says there must be a new law to cover defective vehicles as the Consumer Protection and Sale of Goods Acts in Malaysia covers items of relatively low price.

The new lemon law must cast its net over new cars, including EVs and intelligent connected vehicles.

The law is needed to specifically address the issues faced by most car buyers who don’t know how to fix cars nor to prove what is wrong in some of the 6,000+ components that go into an internal-combustion car.

“There must be clear legal and specific measures or provisions to protect the buyer of a car, which is a complex machine that is life-changing and potentially life-threatening,” Suresh said.

He added that bearing in mind that the salient principle of law is that “he who asserts must prove”, the Malaysian car buyer is unfairly expected to prove that his/her car is defective. “To do that, he or she will have to back the claim up with an opinion by an independent automotive expert who is willing to testify in court”.

Onus on the car buyer

The now-defunct Automobile Association of Malaysia (AAM) would have been a source of recourse in vehicle inspection by qualified automotive engineers, prior to its deregistration in 2021.

The alternative automotive body is the Motorsports Association of Malaysia; however, it is focussed on motorsports and has not provided vehicle inspection services as well other services, including the issuance of carnet as supported by the FIA and the FIM, the international bodies representing all two and four wheelers.

Suresh said: “Is it fair for the car buyer to bear the burden of paying for the services of an automotive expert and lawyer to challenge the manufacturer? This is the very essence of the lemon law.

“The moment the consumer claims that the vehicle is defective, the burden shifts to the manufacturer to prove that it is not defective.”

There is also the larger issue of there being a need to protect consumers from makes that could disappear overnight. Even today, there are manufacturers of legacy brands who neglect to carry parts for 10 years to support the cars that they have sold.

Yamin Vong can be reached at his Facebook page, yamin.com.my. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.