Why is there a Lemon Law? – TEXAS LEMON LAW

The Law Office of Darin Siefkes Texas Lemon Law

Why is there a Lemon Law?

Sometimes, understanding why something exists helps you understand some of its peculiarities. The Texas Lemon Law is that way.

Before the Texas Lemon Law, consumers faced a problem if they had a vehicle that was repeatedly repaired – a lack of damages. Since the repairs were paid for by the manufacturer, the consumer suffered no damages due to the excessive number of repairs attempts. The damages that did exist – rental car expenses, towing, etc. were waived by the sales contract. That meant that a consumer had no recourse for a lemon vehicle.

Theoretically, excessive repairs would decrease the value of the vehicle. But, as long as the consumer avoided the dealer who made the repairs, no one knew about the problems with the vehicle. Also, the loss of value a vehicle suffers due to excessive repairs is not the only factor that hurts the value of a vehicle. In fact, it almost never is — a used vehicles is worth significantly less than a new vehicle. This depreciation is natural and not caused by the repairs so it is not recoverable from the manufacturer or dealerships.

A typical consumer would by a $7,000 vehicle (remember we are talking about early ‘80’s). After two years it depreciates to $3,000 naturally. If the excessive repairs knocked the value down to $2,000 (a third of its value), the consumer could only recover $1,000. If the consumer borrowed money to purchase the vehicle, it is highly likely that, even with a court judgement and the proceeds from the sale of the vehicle, they would still be upside down on the loan with the recovered damages. Since there was no viable way for a consumer to recover their losses, the Lemon Law was passed by the Texas Legislature.