Lemon Law to protect new Pinoy car owners

MANILA, Philippines - Finally the country will have a Lemon Law to protect new car owners from factory defects.

Under the Lemon Law, anyone who purchases a brand new car and experiences defects within a year after purchase would be able to secure a refund or replacement of the unit if repairs prove useless.

The Senate and House of Representatives met yesterday for a bicameral conference committee hearing to reconcile the conflicting provisions of two versions of the bill approved by the two chambers.

Senator Paolo Benigno Aquino IV, chairman of the Senate committee on trade, commerce and entrepreneurship, said that only minor clarifications were made regarding the two bills during the bicameral conference so a reconciled version was prepared yesterday.

The new version would now be presented before plenary in both chambers of Congress for ratification, after which the bill will be transmitted to the President for signing.

“If you buy a brand new motor vehicle from an authorized dealer and the defect is not addressed after four attempts, then you can get a new car or a refund,” Aquino said.

Under the bill, the manufacturer, distributor or authorized retailer is required to undertake repairs on the defective vehicle.

The repairs may include replacement of parts, components or assemblies.

All defects that occur within a year from delivery of vehicle to the owner or up to 20,000 kilometers of mileage would be covered by the law.

What would not be covered are defects that occur as a result of non-compliance by the consumer of his obligations under the warranty; modifications not authorized by the manufacturer, distributor, authorized dealer or retailer; abuse or neglect of the vehicle; and damage to the vehicle due to an accident or force majeure.

In order to avail of the rights of the consumer under the Lemon Law, the vehicle owner must notify the manufacturer, distributor or dealer in writing of the unresolved complaint and his intention to invoke his rights.

“It shall be the duty of the manufacturer, distributor, authorized dealer or retailer, upon receipt of the motor vehicle and the notice of non-conformity required under Section 6 hereof, to attend to the complaints of the consumer including, as may be necessary, making repairs and undertaking such actions to make the vehicle conform to the standards or specifications of the manufacturer or distributor for such vehicle,” according to the bill filed by Senators Cynthia Villar, Jinggoy Estrada and Aquino.

While the vehicle is under repair, the bill requires the manufacturer, distributor or dealer to compensate the car owner for non-usage of his car by providing a reasonable transportation allowance that would cover taxi fare or a service vehicle.

The Department of Trade and Industry (DTI) would have jurisdiction over all disputes that arise between the car owner and the manufacturer, distributor or dealer.

The bill provides for mediation and arbitration as options for the DTI to resolve the disputes.

Aquino noted that the DTI would have the power to come up with a decision if the two sides fail to reach agreement.

In case non-conformity of the vehicle is found by the DTI, it shall rule in favor of the consumer and direct the manufacturer, distributor, authorized dealer or retailer to grant either the replacement of the vehicle with a similar or comparable motor vehicle or to accept the return of the motor vehicle and refund the owner of all costs.

The concerned car owner also has the option to purchase another vehicle with a higher value or , provided that the owner would pay the difference in cost.

If ever the returned vehicle is made available for sale by the manufacturer, distributor or dealer later on, the Lemon Law requires that full disclosure of the circumstances surrounding the vehicle must be made to potential buyers.

Aquino noted that the Lemon Law was originally introduced by Manuel “Way Kurat” Zamora back in the 1990s.

“It took him three terms. This is 15 years in the making,” Aquino said.