How do vehicle lemon laws work in PH?

They're for your own protection
by Robby Consunji | Apr 19, 2019
PHOTO: Pexels/Freeimages

Republic Act No. 10642 or the Philippine Lemon Law is an Act Strengthening Consumer Protection in the Purchase of Brand New Motor Vehicles which aims to promote full protection to the rights of consumers in the sale of motor vehicles against business and trade practices which are deceptive, unfair, or otherwise inimical to consumers and the public interest.

The Philippine Lemon Law protects owners of brand-new vehicles purchased in the Philippines within a period of twelve (12) months after the date of the original delivery of the brand-new motor vehicle or within the first twenty thousand (20,000) kilometers of operation after delivery of the vehicle, whichever comes first. It gives the owner the right to report any non-conformity with the vehicle’s manufacturer or distributor’s standards or specifications.

The owner/ consumer should notify in writing the manufacturer, distributor, authorized dealer, or retailer of the unresolved complaint and his intention to avail of the Lemon Law rights.

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The Lemon Law rights may only be invoked within the 12 month period or within the first 20,000 kilometers of operation of the vehicle, and after at least four (4) separate repair attempts by the same manufacturer, distributor, authorized dealer, or retailer for the same complaint, and the nonconformity issue remains unresolved.

However, the following causes of nonconformity shall be excluded:

(a) Noncompliance by the consumer of the obligations under the warranty;

(b) Modifications not authorized by the manufacturer, distributor, authorized dealer, or retailer;

(c) Abuse or neglect of the brand-new motor vehicle; and

(d) Damage to the vehicle due to accident or force majeure.

After the notification in writing, the owner/consumer should bring the vehicle to the manufacturer, distributor, authorized dealer, or retailer from where the vehicle was purchased for a final attempt to address the complaint of the consumer to his or her satisfaction.

In the event the nonconformity issue remains unresolved despite efforts to repair the vehicle, the owner/consumer may file a complaint before the Department of Trade and Industry (DTI). But, if the vehicle is not returned for repair within 30 days from the date of notice of release following the final repair attempt, the repair is deemed successful.

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The consumer is also entitled to a reasonable daily transportation allowance, to compensate for the non-usage of the vehicle while under repair and during the period the consumer exercises his/her Lemon Law rights. This amount will cover the transportation of the consumer from his or her residence to his or her regular workplace or destination and vice versa, as evidenced by official receipt, or in such amount to be agreed upon by the parties, or a service vehicle at the option of the manufacturer, distributor, authorized dealer, or retailer.

DTI exercises exclusive and original jurisdiction over the dispute. In case DTI rules that there is nonconformity, it may direct the manufacturer, distributor, authorized dealer, or retailer to grant either of the following remedies to the consumer:

(i) Replace the motor vehicle with a similar or comparable motor vehicle in terms of specifications and values, subject to availability; or

(ii) Accept the return of the motor vehicle and pay the consumer the purchase price plus the collateral charges.

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The consumer may also decide to purchase another vehicle with a higher value and specifications from the same manufacturer, distributor, authorized dealer, or retailer, but should pay the difference in cost.

However, in case nonconformity of the motor vehicle is not found by the DTI, it shall direct the consumer to reimburse the manufacturer, distributor, authorized dealer, or retailer the costs incurred by the latter in validating the consumer’s complaints.

Republic Act No. 10642 provides that an appeal may be taken from a final judgment or order within fifteen (15) days from receipt and the Secretary of the DTI shall decide on the appeal within thirty (30) days from receipt.

Lastly, the manufacturer, distributor, authorized dealer or retailer may offer or make available for resale the returned motor vehicle. Provided that prior to sale or transfer, the manufacturer, distributor, authorized dealer, or retailer should disclose in writing to the next purchaser of the same vehicle the following information:

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(a) The motor vehicle was returned to the manufacturer, distributor, authorized dealer, or retailer;

(b) The nature of the nonconformity which caused the return; and

(c) The condition of the motor vehicle at the time of the transfer to the manufacturer, distributor, authorized dealer or retailer.

The responsibility of the manufacturer, distributor, authorized dealer, or retailer under this section shall cease upon the sale of the affected motor vehicle to the first purchaser.

In case the manufacturer, distributor, authorized dealer, or retailer violates and fails to comply with the required disclosure relating to the nature of the nonconformity which caused the return of the motor vehicle, they shall be held liable to pay damages to the aggrieved party without prejudice to any civil or criminal liability they and/or the responsible officer may incur under existing laws.

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