Iowa (IA) Lemon Law Statutes

Chapter 322G.1-15

322G.1 Legislative intent.

The general assembly recognizes that a motor vehicle is a major consumer acquisition and that a defective motor vehicle undoubtedly creates a hardship for the consumer. The general assembly further recognizes that a duly franchised motor vehicle dealer is an authorized service agent of the manufacturer. It is the intent of the general assembly that a good faith motor vehicle warranty complaint by a consumer be resolved by the manufacturer within a specified period of time. It is further the intent of the general assembly to provide the statutory procedures whereby a consumer may receive a replacement motor vehicle, or a full refund, for a motor vehicle which cannot be brought into conformity with the warranty provided for in this chapter. However, this chapter does not limit the rights or remedies which are otherwise available to a consumer under any other law.

91 Acts, ch 153, §1

322G.2 Definitions.

As used in this chapter, unless the context otherwise requires:

91 Acts, ch 153, §2; 95 Acts, ch 45, §6

322G.3 Duties of manufacturer.

91 Acts, ch 153, §3

322G.4 Nonconformity of motor vehicles.

After twenty or more cumulative days when the motor vehicle has been out of service by reason of repair of one or more nonconformities, the consumer may give written notification to the manufacturer which shall be by certified or registered mail or by overnight service. Commencing upon the date such notification is received, the manufacturer has ten cumulative days when the vehicle has been out of service by reason of repair of one or more nonconformities to conform the motor vehicle to the warranty.

Refunds shall be made to the consumer and lienholder of record, if any, as their interests appear. If applicable, refunds shall be made to the lessor and lessee as follows: the lessee shall receive the lessee’s cost less a reasonable offset for use, and the lessor shall receive the lease price less the aggregate deposit and rental payments previously paid to the lessor for the leased vehicle. If it is determined that the lessee is entitled to a refund pursuant to this chapter, the consumer’s lease agreement with the lessor is terminated upon payment of the refund and no penalty for early termination shall be assessed. The department of revenue and finance shall refund to the manufacturer any use tax which the manufacturer refunded to the consumer, lessee, or lessor under this section, if the manufacturer provides to the department of revenue and finance a written request for a refund and evidence that the use tax was paid when the vehicle was purchased and that the manufacturer refunded the use tax to the consumer, lessee, or lessor.

The terms of this subsection shall be extended for a period of up to two years after the date of the original delivery of a motor vehicle to a consumer, or the first twenty-four thousand miles of operation attributable to a consumer, whichever occurs first, if a nonconformity has been reported but has not been cured by the manufacturer, or its authorized service agent, before the expiration of the lemon law rights period.

91 Acts, ch 153, §4

322G.5 Affirmative defenses.

Any of the following is an affirmative defense to a claim under this chapter:

91 Acts, ch 153, §5

322G.6 Informal dispute settlement procedures—operations and certification.

Within five days following the consumer’s notification to the certified program of the dispute, the program shall inform each party of their right to make an oral presentation.

Meetings of a certified program to hear and decide disputes shall be open to observers, including either party to the dispute, on reasonable and nondiscriminatory terms.

91 Acts, ch 153, §6

322G.7 Informal dispute settlement procedure—certification uniformity.

To facilitate uniform application, interpretation, and enforcement of this section and section 322G.6, and in implementing rules adopted pursuant to section 322G.14, the attorney general may cooperate with agencies that perform similar functions in any other states that enact these or similar sections. The cooperation authorized by this subsection may include any of the following:

91 Acts, ch 153, §7

322G.8 Consumer remedies.

91 Acts, ch 153, §8

322G.9 Compliance and disciplinary action.

The attorney general may enforce and ensure compliance with the provisions of this chapter and rules adopted pursuant to section 322G.14, may issue subpoenas requiring the attendance of witnesses and the production of evidence, and may petition any court having jurisdiction to compel compliance with the subpoenas. The attorney general may levy and collect an administrative fine in an amount not to exceed one thousand dollars for each violation against any manufacturer found to be in violation of this chapter or rules adopted pursuant to section 322G.14. A manufacturer may request a hearing pursuant to chapter 17A, the administrative procedure Act, if the manufacturer contests the fine levied against it. The proceeds from any fine levied and collected pursuant to this section shall be placed in the attorney general’s motor vehicle fraud and odometer law enforcement fund for implementation and enforcement of this chapter.

91 Acts, ch 153, §9

322G.10 Unfair or deceptive trade practice.

A violation by a manufacturer of this chapter is an unfair or deceptive trade practice in violation of section 714.16, subsection 2, paragraph “a”.

91 Acts, ch 153, §10

322G.11 Dealer liability.

This chapter, except for the requirements of section 322G.12, does not impose any liability on a franchised motor vehicle dealer or create a cause of action by a consumer against a dealer. A dealer shall not be made a party defendant in any action involving or relating to this chapter, except as provided in this section. The manufacturer shall not charge back or require reimbursement by the dealer for any costs, including but not limited to any refunds or vehicle replacements, incurred by the manufacturer pursuant to this chapter, in the absence of a finding by a court that the related repairs had been carried out by the dealer in a manner substantially inconsistent with the manufacturer’s published instructions. A manufacturer who is found by a court to have improperly charged back a dealer because of a violation of this section is liable to the injured dealer for full reimbursement plus reasonable costs and any attorney’s fees.

91 Acts, ch 153, §11; 95 Acts, ch 45, §7

322G.12 Resale of returned vehicles.

A manufacturer who accepts the return of a motor vehicle pursuant to a settlement, determination, or decision under this chapter shall notify the state department of transportation, report the vehicle identification number of that motor vehicle within ten days after the acceptance, and obtain a new certificate of title for the vehicle in the manufacturer’s name pursuant to section 321.46. In obtaining a new certificate of title, the manufacturer shall title the vehicle in the county of the transferor’s residence and shall be exempt from the registration fee requirements of section 321.46. For purposes of chapter 423, a manufacturer’s acceptance of the return of a motor vehicle, as described in this section, shall not be considered “use”, as defined in section 423.1. The new certificate of title, and all subsequent registration receipts and certificates of title issued for the motor vehicle, shall contain a designation indicating that the motor vehicle was returned to the manufacturer pursuant to this chapter or a similar law of another state. The state department of transportation shall determine the manner in which the designation is to be indicated on registration receipts and certificates of title and may determine that a “REBUILT” or “SALVAGE” designation supersedes the designation required by this paragraph and include the “REBUILT” or “SALVAGE” designation on the registration receipt and certificate of title in lieu of the designation required by this paragraph.

A person shall not knowingly lease, sell, either at wholesale or retail, or transfer a title to a motor vehicle returned by reason of a settlement, determination, or decision pursuant to this chapter or a similar law of another state unless the nature of the nonconformity is clearly and conspicuously disclosed to the prospective transferee, lessee, or buyer. The attorney general shall prescribe by rule the form, content, and procedure pertaining to such a disclosure statement, recognizing the need of manufacturers to implement a uniform disclosure form. The manufacturer shall make a reasonable effort to ensure that such disclosure is made to the first subsequent retail buyer or lessee. For purposes of this section, “settlement” includes an agreement entered into between the manufacturer and the consumer that occurs after the thirtieth day following the manufacturer’s receipt of the consumer’s written notification pursuant to section 322G.4.

91 Acts, ch 153, §12; 95 Acts, ch 45, §8

322G.13 Certain agreements void.

Any agreement entered into by a consumer that waives, limits, or disclaims the rights set forth in this chapter is void as contrary to public policy.

91 Acts, ch 153, §13

322G.14 Rulemaking authority.

91 Acts, ch 153, §14

322G.15 Applicability.

1. This chapter takes effect July 1, 1991, and applies to motor vehicles originally purchased or leased by consumers on or after that date.

2. This chapter applies to motor vehicles originally purchased or leased in this state and, except for section 322G.3, subsections 1 and 2, and section 322G.6, subsection 1, applies to motor vehicles originally purchased or leased in other states, if the consumer is a resident of this state at the time the consumer’s rights are asserted under this chapter.

91 Acts, ch 153, §15; 95 Acts, ch 45, §9; 96 Acts, ch 1079, § 10