Hawaii Lemon Law Statutes...
Hawaii Lemon Laws and the federal Lemon Law (the Magnuson-Moss Warranty Act) provide for compensation to Hawaii consumers of defective automobiles and trucks and other vehicles and products including motorcycles, RV's, boats, computers and other consumer appliances and products. To qualify under the Hawaii Lemon Law or the Federal Lemon Law, you must generally have a product that suffered multiple repair attempts under the manufacturer's factory warranty. Lemon Law compensation can include a refund, replacement or cash
Hawaii State Statutes
Title 26, Chapter 481I
Trade Regulation And Practice
Motor Vehicle Express Warranty Enforcement (Lemon Law)
481I-1 Legislative intent.
The legislature recognizes that a motor vehicle
is a major consumer purchase and that a defective motor vehicle creates a
hardship for the consumer. The legislature further recognizes that a duly
franchised motor vehicle dealer is an authorized service agent of the
manufacturer. It is the intent of the legislature 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 legislature to
provide statutory procedures whereby a consumer may receive a replacement motor
vehicle, or a full refund, for a motor vehicle which is not brought into
conformity with the applicable express warranties, as provided in this chapter.
Finally, it is the intent of the legislature to ensure that consumers are made
aware of their rights under this chapter and are not refused the information,
documents, or service necessary to exercise their rights.
Nothing in this chapter shall in any way limit or
expand the rights or remedies which are otherwise available to a consumer under
any other law.
When used in this section unless the context
"Business day" means any day during
which the service departments of authorized dealers of the manufacturer of the
motor vehicle are normally open for business.
"Collateral charges" means those
additional charges to a consumer wholly incurred as a result of the
acquisition of the motor vehicle. For the purposes of this chapter, collateral
charges include but are not limited to finance and interest charges,
manufacturer-installed or agent-installed items, general excise tax, license
and registration fees, title charges, and similar government charges.
"Consumer" means the purchaser, other
than for purposes of resale, or the lessee of a motor vehicle, any person to
whom the motor vehicle is transferred during the duration of the express
warranty applicable to the motor vehicle, and any other person entitled to
enforce the obligations of the express warranty.
"Express warranty" means any written
warranty issued by the manufacturer, or any affirmation of fact or promise
made by the manufacturer, excluding statements made by the dealer, in
connection with the sale or lease of a motor vehicle to a consumer, which
relates to the nature of the material or workmanship and affirms or promises
that the motor vehicle shall conform to the affirmation, promise, or
description or that the material or workmanship is free of defects or will
meet a specified level of performance.
"Incidental charges" means those
reasonable costs incurred by the consumer, including, but not limited to,
towing charges and the costs of obtaining alternative transportation which are
directly caused by the nonconformity or nonconformities which are the subject
of the claim, but shall not include loss of use, loss of income, or personal
"Lemon law rights period" means the
term of the manufacturer's express warranty, the period ending two years after
the date of the original delivery of a motor vehicle to a consumer, or the
first 24,000 miles of operation, whichever occurs first.
"Lessee" means any consumer who
leases a motor vehicle for one year or more pursuant to a written lease
agreement which provides that the lessee is responsible for repairs to such
motor vehicle, or any consumer who leases a motor vehicle pursuant to a
"Motor vehicle" means a
self-propelled vehicle primarily designed for the transportation of persons or
property over public streets and highways which is used primarily for
personal, family, or household purposes. For purposes of this definition, a
"motor vehicle" also includes a "demonstrator", which
means a vehicle assigned by a dealer for the purpose of demonstrating
qualities and characteristics common to vehicles of the same or similar model
or type, but does not include mopeds, motorcycles, or motor scooters, as those
terms are defined in chapter 286, or vehicles over 10,000 pounds, gross
vehicle weight rating. For purposes of this definition, a "motor
vehicle" also includes (1) an individually registered vehicle used for an
individual's business purposes and for personal, family, or household
purposes; and (2) a vehicle owned or leased by a sole proprietorship,
corporation or partnership which has purchased or leased no more than one
vehicle per year, used for household, individual, or personal use in addition
to business use.
"Nonconformity" means a defect,
malfunction, or condition that fails to conform to the motor vehicle's
applicable express warranty and that substantially impairs the use, market
value, or safety of a motor vehicle, but does not include a defect,
malfunction, or condition that results from an accident, abuse, neglect,
modification, or alteration of the motor vehicle by persons other than the
manufacturer, its agent, distributor, or authorized dealer.
"Purchase price" means the cash price
appearing in the sales agreement or contract and paid for the motor vehicle,
including any net allowance for a trade-in vehicle. Where the consumer is a
second or subsequent purchaser and the arbitration award is for a refund of
the motor vehicle, "purchase price" means the purchase price of the
second or subsequent purchase not to exceed the purchase price paid by the
"Reasonable offset" for use means the
number of miles attributable to a consumer up to the date of the third repair
attempt of the same nonconformity which is the subject of the claim, the date
of the first repair attempt of a nonconformity that is likely to cause death
or serious bodily injury, or the date of the thirtieth cumulative business day
when the vehicle is out of service by reason of repair of one or more
nonconformities, whichever occurs first. The reasonable offset for use shall
be equal to one per cent of the purchase price for every thousand miles of
"Replacement motor vehicle" means a
motor vehicle which is identical or reasonably equivalent to the motor vehicle
to be replaced, as the motor vehicle to be replaced existed at the time of
original acquisition, including any service contract, undercoating,
rustproofing, and factory or dealer installed options.
"Settlement" means an agreement for
repurchase or replacement of a motor vehicle entered into between a
manufacturer and a consumer that occurs after a dispute is submitted to an
informal dispute resolution procedure or arbitration program or after a
dispute is approved for arbitration under section 481I-4.
"Settlement" does not include an agreement for a motor vehicle to be
repurchased pursuant to a guaranteed repurchase or satisfaction program
advertised by the manufacturer in which the vehicle was not alleged or found
to have a nonconformity as defined in this section.
"Substantially impairs" means to
render the motor vehicle unfit, unreliable, or unsafe for warranted or normal
use, or to significantly diminish the value of the motor vehicle.
481I-3 Motor vehicle: express warranties,
(a) If a motor vehicle does not conform
to all applicable express warranties, and the consumer reports the
nonconformity in writing to the manufacturer, its agent, distributor, or its
authorized dealer during the term of the lemon law rights period, then the
manufacturer, or, at its option, its agent, distributor, or its authorized
dealer, shall make such repairs as are necessary to conform the vehicle to
such express warranties, notwithstanding the fact that such repairs are made
after the expiration of such term.
(b) If the manufacturer, its agents,
distributors, or authorized dealers are unable to conform the motor vehicle to
any applicable express warranty by repairing or correcting any defect or
condition which substantially impairs the use, market value, or safety of the
motor vehicle after a reasonable number of documented attempts, then the
manufacturer shall provide the consumer with a replacement motor vehicle or
accept return of the vehicle from the consumer and refund to the consumer the
following: the full purchase price including but not limited to charges for
undercoating, dealer preparation, transportation, installed options, and all
collateral and incidental charges, and less a reasonable offset for the
consumer's use of the motor vehicle.
If either a replacement motor vehicle or a
refund is awarded, an "offset" may be made for damage to the vehicle
not attributable to normal wear and tear, if unrelated to the nonconformity.
If a replacement motor vehicle is awarded, a reasonable offset shall be made
for the use of the motor vehicle and an additional offset may be made for loss
to the fair market value of the vehicle resulting from damage beyond normal
wear and tear, unless the damage resulted from the nonconformity. When the
manufacturer supplies a replacement motor vehicle, the manufacturer shall be
responsible for the general excise tax, and license and registration fees.
Refunds made pursuant to this subsection shall be deemed to be refunds of the
sales price and treated as such for purposes of section 237-3. Refunds shall
be made to the consumer and lienholder, if any, as their interests may appear
on the records of ownership. If applicable, refunds shall be made to the
lessor and lessee pursuant to rules adopted by the department of commerce and
(c) It shall be an affirmative defense
to any claim under this section that a nonconformity is the result of abuse,
neglect, or unauthorized modifications or alterations of a motor vehicle by a
(d) It shall be presumed that a
reasonable number of attempts have been undertaken to conform a motor vehicle
to the applicable express warranties, if, during the lemon law rights period,
any of the following occurs:
(1) The same nonconformity has been
subject to examination or repair at least three times by the manufacturer,
its agents, distributors, or authorized dealers, but such nonconformity
continues to exists; or
(2) The nonconformity has been subject
to examination or repair at least once by the manufacturer, its agents,
distributors, or authorized dealers, but continues to be a nonconformity
which is likely to cause death or serious bodily injury if the vehicle is
(3) The motor vehicle is out of
service by reason of repair by the manufacturer, its agents, distributors,
or authorized dealers for one or more nonconformities for a cumulative total
of thirty or more business days during the lemon law rights period.
The term of the lemon law rights period and
such thirty-day period shall be extended by any period of time during which
repair services are not available to the consumer because of a war, invasion,
strike, fire, flood or other natural disaster.
The presumptions provided in this subsection
shall not apply unless the manufacturer has received a written report of the
nonconformity from the consumer and has had a reasonable opportunity to repair
the nonconformity alleged.
Upon a second notice of the nonconformity, or,
if the motor vehicle has been out of service by reason of repair in excess of
twenty business days, the dealer shall notify the manufacturer of the
(e) During the lemon law rights period,
the manufacturer or its agent, distributor, or authorized dealer shall provide
to the consumer, each time the consumer's vehicle is returned from being
diagnosed or repaired under the warranty, a fully itemized, legible statement
or repair order indicating any diagnosis made and all work performed on the
vehicle, including, but not limited to, a general description of the problem
reported by the consumer or an identification of the defect or condition,
parts and labor supplied, the date and the odometer reading when the vehicle
was submitted for repair, and the date when the vehicle was made available to
the consumer. The consumer shall sign and receive a copy of the statement or
(f) Upon request from the consumer, the
manufacturer, or at its option its agent, distributor, or authorized dealer,
shall provide a copy of any report or computer reading regarding inspection,
diagnosis, or test-drive of the consumer's motor vehicle, and shall provide a
copy of any technical service bulletin related to the nonconformity issued by
the manufacturer regarding the year and model of the consumer's motor vehicle
as it pertains to any material, feature, component, or the performance
Upon receipt of a consumer's written report of
a nonconformity to the manufacturer, the manufacturer or, at its option, its
agent, distributor, or authorized dealer, shall inform the consumer of any
technical service bulletin or report relating to the nonconformity, and shall
advise the consumer of the consumer's right to obtain a copy of such report or
technical service bulletin.
(g) The manufacturer, its agent,
distributor, or authorized dealer, shall provide the consumer at the time of
purchase of the motor vehicle a written notice setting forth the terms of a
state certified arbitration program and a statement of the rights of the
consumer under this section in plain language, the form of which has been
previously reviewed and approved by the department of commerce and consumer
affairs for substantial compliance with title 16, Code of Federal Regulations,
part 703, as may be modified by the requirements of this chapter. The written
notice must specify the requirement that written notification to the
manufacturer of the motor vehicle nonconformity is required before the
consumer is eligible for a refund or replacement of the motor vehicle. The
notice must also include the name and address to which the consumer must send
such written notification. The provision of this statement is the direct
responsibility of the dealer, as that term is defined in chapter 437.
(h) The consumer shall be required to
notify the manufacturer of the nonconformity only if the consumer has received
a written notice setting forth the terms of the state certified arbitration
program and a statement of the rights of the consumer as set out in subsection
(i) Where the state certified
arbitration program is invoked by the consumer of a motor vehicle under
express warranties, a decision resolving the dispute shall be rendered within
forty-five days after the procedure is invoked. However, the failure of an
arbitrator to render a decision within forty-five days because of unforeseen
circumstances shall not void any subsequent decision.
Any decision rendered resolving the dispute
shall provide appropriate remedies including, but not limited to, the
(1) Provision of a replacement motor
(2) Acceptance of the motor vehicle
from the consumer, refund of the full purchase price, and all collateral and
The decision shall specify a date for
performance and completion of all awarded remedies.
(j) Any action brought under this
section must be initiated within one year following expiration of the lemon
law rights period.
(k) No vehicle transferred to a dealer
or manufacturer by a buyer or a lessee under this chapter or by judgment,
settlement, or arbitration award in this State or in another state may be
sold, leased, or auctioned by any person unless:
(1) The nature of the defect
experienced by the original buyer or lessee is clearly and conspicuously
disclosed on a separate document that must be signed by the manufacturer and
the purchaser and must be in ten point, capitalized type, in substantially
the following form:
"IMPORTANT: THIS VEHICLE WAS RETURNED TO
THE MANUFACTURER BECAUSE A DEFECT(S) COVERED BY THE MANUFACTURER'S EXPRESS
WARRANTY WAS NOT REPAIRED WITHIN A REASONABLE TIME AS PROVIDED BY
(2) The defect is corrected; and
(3) The manufacturer warrants to the
new buyer or lessee, in writing, that if the defect reappears within one
year or 12,000 miles after the date of resale, whichever occurs first, it
will be corrected at no expense to the consumer.
(l) A violation of subsection (k) shall
constitute prima facie evidence of an unfair or deceptive act or practice
under chapter 480.
481I-4 Arbitration mechanism.
(a) The department of commerce and
consumer affairs shall establish and monitor a state certified arbitration
program which is in substantial compliance with title 16, Code of Federal
Regulations, part 703, as may be modified by this section, and shall adopt
appropriate rules governing its operation.
(b) The director of commerce and
consumer affairs may contract with an independent arbitration organization for
annual term appointments to screen, hear, and resolve consumer complaints
which have been initiated pursuant to section 481I-3.
The following criteria shall be considered in
evaluating the suitability of independent arbitration mechanisms: capability,
objectivity, experience, non-affiliation with manufacturers of or dealers in
new motor vehicles, reliability, financial stability, and fee structure.
(c) If a consumer agrees to participate
in and be bound by the operation and decision of the state certified
arbitration program, then all parties shall also participate in, and be bound
by, the operation and decision of the state certified arbitration program. The
prevailing party of an arbitration decision made pursuant to this section may
be allowed reasonable attorney's fees.
(d) The submission of any dispute to
arbitration in which the consumer elects nonbinding arbitration shall not
limit the right of any party to a subsequent trial de novo upon written demand
made upon the opposing party to the arbitration within thirty calendar days
after service of the arbitration award, and the award shall not be admissible
as evidence at that trial. If the party demanding a trial de novo does not
improve its position as a result of the trial by at least twenty-five per
cent, then the court shall order that all of the reasonable costs of trial,
consultation, and attorney's fees be paid for by the party making the demand.
If neither party to a nonbinding arbitration
demands a trial de novo within thirty days after service of the arbitration
award, the arbitrator's decision shall become binding on both parties upon the
expiration of the thirty-day period.
(e) Funding of the state certified
arbitration program shall be provided through an initial filing fee of $200 to
be paid by the manufacturer and $50 to be paid by the consumer upon initiating
a case for arbitration under this section. Every final decision in favor of
the consumer issued by the independent arbitration mechanism shall include
within its relief the return of the $50 filing fee to the consumer. The
director of commerce and consumer affairs may establish a trust fund for the
purpose of administering fees and costs associated with the state certified
(f) The failure of a manufacturer to
timely comply with a binding decision of a state certified arbitration program
shall be prima facie evidence of an unfair or deceptive act or practice under
chapter 480 unless the manufacturer can prove that it attempted in "good
faith" to comply, or that the failure was beyond the manufacturer's
control, the result of a written agreement with the consumer, or based on an
appeal filed under chapter 658.