What should you do if your brand new car is found to be defective?

Have you recently bought your first brand-new car? Perhaps no one could ever explain your excitement and eagerness when you take it for a drive around your neighborhood on the first day after picking it up from the car dealership. Furthermore, it’s a thrilling experience when you get behind the wheel of a new car and park it in your garage. How could anyone not be pleased with that?

After driving it for a week, you thought everything was fine with your car; of course, it's brand new! Unfortunately, after a few more weeks, you notice that your car is no longer as efficient as it used to be. Perhaps the car you consider your buddy becomes a problem due to some issues that were not discovered before purchasing it. They usually label it as a “lemon car”.

Having a lemon unit can be a great burden as it requires to have regular servicing due to some recurring issues. Not only does it add to your monthly expenses but also requires your time and effort. So, what should you do if your brand-new car is found to be defective in the first place? Fortunately, our government lawmakers approved a law that protects consumers in situations like yours. The law is known as "The Philippine Lemon Law".

The Philippine Lemon Law

The RA 10642 also known as “The Philippine Lemon Law” was enacted in 2014 to promote full protection to the rights of consumers in the sale of motor vehicles against business and trade practices which are deceptive, unfair, or otherwise inimical to consumers and the public interest.

This law basically gives full protection to motor vehicle buyers/owners in case the new units they bought from the authorized dealers are deemed defective. The vehicle types included are hatchbacks, sedans, crossovers, and even huge SUVs, among other passenger vehicles. It's important to note, however, that this law does not yet apply to motorbikes, buses, delivery vehicles, or heavy equipment.

This law only covers brand new vehicles that are bought within twelve (12) months or twenty thousand (20,000) kilometers in operation after the delivery of the vehicle, whichever comes first. This includes nonconformity with the vehicle’s manufacturer or distributor’s standards or specifications except for the following causes:

• Noncompliance by the consumer of the obligations under the warranty;
• Modifications not authorized by the manufacturer, distributor, authorized dealer or retailer;
• Abuse or neglect of the brand new motor vehicle; and
• Damage to the vehicle due to accident or force majeure.

Things that you should do

The following are the steps that you should take when your brand-new vehicle is found to be defective under the lemon law:

1. Repair Attempts. You must first bring your vehicle to the manufacturer, distributor, dealer, or retailer, to give them an opportunity to fix the vehicle to be in conformity with the vehicle’s manufacturer or distributor’s standards or specifications. Be sure to bring it immediately after the discovery of defectiveness.

   If the vehicle is still not fixed after four (4) attempts to bring it into compliance with the vehicle's manufacturer or distributor's standards or specifications, you have the option of exercising your Lemon Law rights. Take note that these rights can only be invoked within twelve (12) months after the purchase or twenty thousand (20,000) kilometers of operation of the vehicles.

2. Notice of Availment of Lemon Law Rights. Once you’re qualified for lemon law rights, you must first notify in writing the manufacturer, distributor, authorized dealer or retailer of the unresolved complaint, and your intention to invoke your rights under RA 10642 within the Lemon Law rights period.

3. Availment of Lemon Law Rights. After filing the notice of availment, you should need to bring the vehicle to the manufacturer, distributor, authorized dealer, or retailer from where the vehicle was purchased for a final attempt to address your complaint to your satisfaction.

4. File a complaint to the DTI. If the vehicle is deemed to be defective or the nonconformity remains unresolved despite the fixing efforts, you may file a complaint before the Department of Trade and Industry (DTI). But, if the vehicle is not returned for repair within 30 days from the date of notice of release following the final repair attempt, the repair is deemed successful.

   Take note that you are also entitled to a reasonable daily transportation allowance, to compensate for the non-usage of the vehicle while under repair and during the period you exercise your Lemon Law rights. This amount will cover the transportation from your residence to your regular workplace or destination and vice versa, as evidenced by official receipt, or in such amount to be agreed upon by the parties, or a service vehicle at the option of the manufacturer, distributor, authorized dealer, or retailer.

5. Wait for the DTI to issue a decision. The DTI has sole and exclusive jurisdiction over the case. If the DTI finds nonconformity, it may order the manufacturer, distributor, authorized dealer, or retailer to provide you with one of the following remedies:

   • replace the motor vehicle with a similar or comparable motor vehicle in terms of specifications and values, subject to availability; or,
   • accept the return of the motor vehicle and pay the consumer the purchase price plus the collateral charges.

6. Exercise your remedy. Once the DTI issues an order, you shall then exercise your rights with the aforementioned options. You can alternatively choose to buy another vehicle from the same manufacturer, distributor, authorized dealer, or retailer with a greater value and specs, but you will have to pay the difference in price. However, if the DTI does not find nonconformity with the motor vehicle, you must reimburse the manufacturer, distributor, authorized dealer, or retailer for the costs incurred in confirming your complaint.