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What To Know About The Indiana Lemon Law (2023)

The lemon law in Indiana dictates that a vehicle with a serious defect must be repaired to satisfactory condition within a reasonable number of attempts or days.

If repair of the vehicle is not possible, the manufacturer must replace the vehicle with the same (or similar) vehicle or accept a return of the vehicle for its original purchase price.

Indiana Lemon Law Rules for New Cars

woman stresses next to broken down car

Indiana’s lemon law is geared toward the newest vehicles.

This means it applies to all new vehicles sold at car lots.

Lemon Law Requirements for New Vehicles

The lemon law applies in Indiana if:

  • The issue with the vehicle “significantly impairs” the use, market value, or safety of the vehicle or is covered by the vehicle’s warranty.
  • The issue with the vehicle occurs within 18 months of its original purchase/delivery.
  • The issue with the vehicle occurs within the first 18,000 miles.
  • The vehicle came with the issue. (i.e. You didn’t drive it off the lot and immediately sideswipe a curb, jacking up the running board or suspension.)

If your car meets the definition of a “lemon” in Indiana, the car dealership/manufacturer is required to do one of the following things:

  • Repair the car within a reasonable number of attempts
  • Repair the car within a reasonable number of days
  • Replace the car with an identical or equivalent vehicle that is acceptable to you
  • Allow you to return the car for a full refund (minus a “reasonable allowance” for the mileage put on the vehicle)

Repair the car within a reasonable number of attempts

What constitutes a reasonable number of attempts to repair a vehicle in Indiana is four (4).

The exception to this is if the issue with the vehicle is a serious safety issue, in which case federal law reduces the number of failed attempts at repair to one (1).

If the dealer/manufacturer cannot repair the vehicle after four attempts (one in the case of serious safety defect), the manufacturer must allow you to return the car for an identical (or comparable) vehicle or refund.

Repair the car within a reasonable number of days

What constitutes a reasonable number of days in Indiana is 30.

If the vehicle is in the shop more than 30 days with the same issue, it’s considered a lemon and the manufacturer must allow you to return the vehicle for an identical (or like) vehicle or refund.

These 30 days do not have to be consecutive. Instead, they are cumulative.

Any time your car is in the shop within the lemon law period for the same issue counts toward your 30 days, even if they are months apart.

Replace the car with a “substantially identical” vehicle

If the manufacturer cannot repair the vehicle within the allotted number of attempts or days, they must allow you to return it.

When you return the car, you may request a replacement vehicle.

This replacement vehicle must be similar enough to the original vehicle (same make, model, have the same features, etc.) and acceptable to you.

The manufacturer must pay any additional taxes and fees associated with the exchange, as well as any incidental charges (interest, car rental fees, etc.), but may deduct an allowance for the mileage put on the vehicle.

This fee is calculated by a standard formula.

Allow you to return the car for a full refund

If you do not want a replacement vehicle after your first vehicle turns out to be a lemon, you may request a refund instead.

When refunding a lemon, dealers must refund the full buying price of the car (including all taxes, fees and interest paid on the loan), minus the mileage fee.

Indiana Lemon Law Rules for Used Cars

All vehicles within the lemon law coverage period are subject to the lemon law in Indiana.

This means very new previously-owned vehicles (within 18 months of delivery to the original owner) with low mileage (fewer than 18,000 miles) are generally eligible.

The lemon law applies to used cars in Indiana if:

  • The issue with the vehicle “significantly impairs” the use, market value, or safety of the vehicle or is covered by the vehicle’s warranty.
  • The vehicle is still within Indiana’s lemon law eligibility period.
  • The issue with the vehicle was not caused by improper use by the former owner.

Indiana Lemon Law Time Limit

The time limit in Indiana for filing a lemon law claim is two years after the first report of the issue to the dealer or manufacturer.

Any time spent in the manufacturer’s informal dispute settlement procedure (arbitration) does not count against this time.

How do I file a lemon law claim in Indiana?

Before filing a lemon law claim in Indiana, you may have to contact the manufacturer of the vehicle to try to get the issue resolved.

If this is the case, it should say so clearly in the warranty paperwork or owner’s manual of the vehicle.

Typically, contacting the manufacturer involves sending a certified letter with specific information to the address the manufacturer provides.

At this point, the manufacturer may request a last attempt to fix the vehicle or may offer to replace or refund the vehicle.

Whatever the manufacturer decides, you can proceed at this point with the informal dispute settlement procedure as explained in your vehicle’s paperwork. (Or file a lawsuit if there is no dispute settlement procedure).

If you cannot find information on the settlement procedure in your car’s paperwork or have difficulty with the process, you can fill out a Consumer Complaint Form with the Attorney General’s office.

General Lemon Law FAQ

To further your understanding of lemon laws, here are some frequently asked questions about how they pertain to vehicles.

What is a lemon law?

A lemon law is a law that protects consumers from defective products or “lemons,” generally by enforcement of a warranty.

What is a lemon car?

“Lemon car” meaning varies slightly from state to state, but, in general, if a new car has a defect the dealer or manufacturer cannot fix, that car is a lemon.

Defects in lemon cars typically affect the operation or safety of a vehicle, but not always.

Structural issues that affect that value of a car are also covered.

Is there a federal lemon law?

There is no federal lemon law specifically geared toward vehicles.

However, there is a federal warranty act called the Magnuson-Moss Warranty Act which protects consumers from false or misleading warranties and makes warranties easier to enforce.

Since cars sold by dealerships typically come with full warranties, the Magnuson-Moss Warranty Act applies to them.

This act serves as the basis for state-specific lemon laws.

What’s in the Magnuson-Moss Warranty Act (as it applies to vehicles)?

The Magnuson-Moss Warranty Act includes several key points that pertain to vehicle warranties.

These points are:

  • No product is required to have a warranty (and many used cars don’t).
  • The terms of a warranty must be fully disclosed in simple, understandable language.
  • Any ambiguity in the language of a warranty is held against the warrantor (in this case, the manufacturer or dealer).
  • Warrantors cannot require only branded parts be used with their products for a warranty to remain valid (Ford can’t require only Ford parts be used on your vehicle).
  • Service contracts must follow these same rules.

Basically, if you feel like you’ve been duped by a warranty, you may have a case under the Magnuson-Moss Act.

And if your vehicle comes with a “full warranty”:

  • A dealer/manufacturer must repair any defect for free within a reasonable amount of time/reasonable number of attempts

Or, if the dealer/manufacturer cannot repair the vehicle, they must:

  • Replace the vehicle with an exact-match vehicle or allow you to return the vehicle for a full refund (including all taxes and fees)

Does the federal lemon law cover used cars?

If the used cars come with warranties, it does.

The Magnuson-Moss Act is not directed toward products themselves, but the warranties which cover them.

So, if you bought a used car that came with both a defect AND a warranty that covers that defect, the dealer must either repair your vehicle (in a satisfactory manner).

If they fail to do so, you can seek restitution under the Magnuson-Moss Act.

You may be able to come to an agreement with the dealer through arbitration, but, more likely, you will have to take the matter to court.

Does the lemon law apply to leased vehicles?

Yes. In Indiana, the lemon law applies to leased vehicles that are new and under a manufacturer’s warranty.

Chucking A Lemon In Indiana

When you buy a new car, whether you really need one or are just looking for an upgrade, there’s nothing worse than getting it home only to discover it’s a non-functional dud.

But manufacturers shouldn’t be shipping dud cars to dealerships and dealerships shouldn’t be putting dud cars out on their lots.

That’s the point of lemon laws, to ensure new vehicles driven off of car lots are safe, functional, and free from major defects.

So, if you think you’ve gotten a lemon car in Indiana, you shouldn’t accept it and you shouldn’t delay.

You do have recourse, and the sooner you bring the issue to the dealer’s and manufacturer’s attention, the stronger your “lemon” claim will be.