Arkansas Lemon Laws

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Who is covered by the Arkansas Lemon Law?
Arkansas lemon law covers vehicles that are purchased, licensed, or leased in Arkansas, and which are designed for personal transportation on public roads. Vehicular sections of mobile homes are also covered, though other vehicles with a gross vehicle weight over 10,000 pounds are exempt. Motorcycles, mopeds, and living areas of mobile homes are not covered. The consumer must not have bought the vehicle for resale purposes.

What problems are covered by the Arkansas lemon law?
The Arkansas lemon law covers vehicles that do not conform to warranty due to defects that affect the use, safety, or value of the vehicle. This nonconformity must be the manufacturer's fault, and cannot be caused by abuse, neglect, or modification by the owner. In order to qualify for the Arkansas lemon law, the vehicle must fall under its Motor Vehicle Quality Assurance (MVQA) period, which starts when the owner receives delivery of the vehicle and ends two years later, or when the vehicle reaches 24,000 miles, whichever comes first.

What is the process for filing a claim under Arkansas lemon law?
Before proceeding with settlement under Arkansas lemon law, the manufacturer must have a reasonable chance to repair the vehicle. This is defined as three unsuccessful attempts to repair the nonconformity, or one attempt to repair a life threatening nonconformity, or if the vehicle has been out of commission for repairs for a total of thirty days, or five attempts to repair different problems which together add up to a serious nonconformity. The owner must notify the manufacturer of intent to invoke Arkansas lemon law by certified or registered letter. This notice must be sent within two years of the original attempt to repair the nonconformity. The manufacturer then has ten days to offer to make a final repair on the vehicle or progress into settlement.

What is the settlement process under Arkansas lemon law?
Under Arkansas lemon law, a vehicle manufacturer is required to have a settlement process in place, which the customer must attempt to use. If the nonconformity falls under Arkansas lemon law, the manufacturer must offer either a refund or a replacement vehicle. Refunds fall under three categories - purchase price, collateral charges (which include finance charges, sales tax, extended warranty charges and title tax), and incidental costs (which include any charges that occurred as a result of the nonconformity, like towing and alternative transportation). These are offset by a reasonable fee for the use of the vehicle, calculated by dividing the number of miles driven before the nonconformity was reported by 120,000 and multiplying the result by the purchase price.

If the consumer is the owner of the vehicle, he or she is entitled to all three of the refund categories, minus the offset. If the vehicle is leased, the lessor receives a refund 105% of the purchase price plus collateral charges, minus the offset. The lessee is entitled to the deposit and fees paid for the rental plus incidental charges, minus the offset.

If replacement is chosen, the substituted vehicle must have the approximate value as the original vehicle was when purchased. The manufacturer is required to pay collateral and incidental charges to the consumer, and the consumer is required to pay the offset to the manufacturer.