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Will Chrysler Honor its Lemon Law and Warranty Claims?

  Norman Taylor & Associates
  June 8, 2009

Good news for Chrysler consumers. U.S. customers of the new Chrysler to emerge from bankruptcy will be covered by lemon law rights according to the agreement reached by Chrysler and Fiat. Warranty promises will be honored as originally intended.

Under most states lemon laws, a manufacturer is suppose to either buy back or replace a lemon vehicle where the consumer has given the manufacturer a reasonable opportunity to repair a major problem.

Prior to the agreement reached between Chrysler and Fiat it was unclear how consumers who had initiated claims under the lemon law would be affected by the bankruptcy. Some consumers who had requested refunds on their “lemons” had been issued checks that bounced because of the bankruptcy filing. After many protests by consumer groups and attorneys on behalf of consumers, Chrysler said it immediately requested and received approval from the court to honor warranties in the bankruptcy case. The court decided that all warranty and lemon law obligations will be assumed by the new company after the clsoe of the transaction between Chrysler and Fiat.

Chrysler consumers can now rest easy knowing their warranty is intact and they will still have rights to seek a refund or replacement under the lemon law if they find they have purchased a lemon, whether it was prior to the bankruptcy, during or after.

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