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The Hawaii Lemon Law

The Hawaii lemon law protects you and other Hawaians who purchased or leased new motor vehicles that turn out to be lemons.

What Vehicles Does the HI Lemon Law Cover?

The lemon law in Hawaii covers all new and demonstrator cars, pickup trucks and SUVs under 10,000 pounds gross vehicle rating (find this number on the sticker placed on the driver side door jamb), plus all vehicles still under the manufacturer's original warranty that have been transferred to a second owner.

The vehicle must have been purchased or leased in Hawaii, or registered for first use in Hawaii. The protection period lasts for two years after the original delivery of the vehicle, or 24,000 miles, whichever occurs first.

The vehicle must be primarily for personal, family or household use, or owned/leased by an individual and also used for business purposes, or owned/leased by a business and also used for personal, family or household use. For the business vehicle to be covered, the business cannot own or lease more than one vehicle per year.

Motorcycles, mopeds and motor scooters are not covered.

The defect must substantially impair your use of or the safety of the vehicle, or substantially reduce it's market value. You may need the help of a licensed mechanic or other technical expert to prove this.

The defect cannot be caused by abuse, neglect, an accident, or any unauthorized repairs or modifications (those not done by the manufacturer or its authorized dealer).

You must also have tried to have the defect repaired by an authorized dealer during the two year/24,000 mile protection period, and you must have sent a letter to the manufacturer during that period.

You also must have given the manufacturer a "reasonable opportunity" to fix the defect. This means at least three repair attempts for the same defect, one attempt for a defect that could cause death or serious injury, or a total of 30 or more business days out of service for repairs for any number of defects. Whichever threshold you use, it must have been reached within the protection period. The more thresholds (the Hawaii lemon law calls them presumptions) you can use, the stronger your case will be.

Important note: if the dealer did not provide a Lemon Law Statement of Rights when you purchased or leased the vehicle, you are not required to write to the manufacturer, although I recommend that you do it anyway. Also, if you did not receive the statement, include that information when you send in your paperwork to the government program.

Finally, you must have filed a request for arbitration with Hawaii's State Certified Arbitration Program (SCAP) within one year from the end of the protection period.

I Have a Hawai'i Lemon. What's the Next Step?

You must send a letter to the manufacturer (not to the dealership where you bought or leased the vehicle). You'll find the address in the Lemon Law Statement of Rights. Send the letter by certified mail, return receipt requested. Include photocopies of all your documentation, including notes, service orders and work invoices, and anything else that will support your claim. If you plan to ask for collateral charges (such as window tinting) or incidental charges (such as rental fees while your vehicle is repaired), include copies of those receips with your copies.

The manufacturer has the right to inspect the lemon vehicle, including a test drive and diagnostic tests, after your case has been started. However, it cannot make any further repair attempt unless you authorize it.

Once you've sent your letter, complete the form that SCAP provides. This is where you make your legal claim(s) against the manufacturer, so be very accurate and very complete. An inaccurate or incomplete form will be returned to you. If necessary, add extra sheets to include all information.

Send three copies of all the documents asked for in the form. And be sure to include the $50 filing fee, which will be refunded to you should the arbitration decision be in your favor.

SCAP will notify you that the case has been started. The arbitration hearing will happen and the decision rendered within 45 days.

Arbitration and Law Suits

You are allowed to negotiate with the manufacturer outside the Hawaii lemon law arbitration hearing. This should speed up the replacement/refund process. However, be certain that every term is clear and to your satisfaction. Your $50 SCAP fee will not be returned to you if you come to an agreement outside of arbitration.

The Hawaii lemon law allows for binding (upon both parties) or non-binding arbitration. If you choose binding arbitration, neither you nor the manufacturer can appeal the decision. If you choose non-binding and appeal, and your position is not improved by at least 25%, the court will order that you pay the costs of the appeal plus the manufacturer's attorney's fees. So be very certain of your case before appealing.

If you accept an offer outside the arbitration process, and the manufacturer does not comply with it (does not provide a replacement or refund), you'll likely need to consult a lawyer. I recommend that you speak with a lemon law attorney, a lawyer experienced with the lemon law in Hawaii.

Replacement or Refund?

The arbitrator may reward a replacement. If so, it must be an identical vehicle or one that's reasonably equivalent to the lemon. If you can't agree on a comparable replacement, the arbitrator may award a refund instead. You are responsible for arranging any needed financing.

A refund will include the full purchase price, along with the cost of dealer-installed options, sales tax, registration fees and other related charges. If you asked for and documented collateral and incidental charges, those may be awarded as well. Any lien holder will be paid first, with you receiving the balance of the refund.

In the case of a lease, the lessor's actual purchase cost is considered to be the "purchase price" for the reasonable use fee. The refund will be paid to the lessor first, with the balance paid to you. The lease agreement is terminated, with no early termination penalties.

Whether you receive a replacement or refund, the manufacturer is entitled to deduct a reasonable use fee based on the purchase price plus the mileage you put on the vehicle until the date of the third repair attempt, the first repair attempt in the case of a life-threatening defect, or the 30th day that the vehicle was out of service.

Hawaii Lemon Law Summary

As a state-run lemon law system, Hawaii's is more convoluted and more demanding than that of many other states. However, it also ensures fairness for you and the manufacturer, spelling out most details as you go.

Be thorough, accurate and complete when sending documents to the manufacturer and to SCAP. The more prepared you are, the better your chances of receiving compensation.

NOTE:The information here is not legal advice and is only presented to you so you can know your options if you purchased a lemon. As with any legal issue, you should seek the advice of a qualified attorney.


 

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