Michigan Lemon Law (2026): How to Qualify & Get a Refund

Michigan's New Motor Vehicle Warranties Act (MCL 257.1401 through MCL 257.1410) protects buyers and lessees of new passenger vehicles. Under MCL 257.1403, a vehicle is presumed a lemon after four repair attempts for the same defect within two years of the first repair attempt, or after 30 cumulative days out of service within the warranty period or first year of ownership. The consumer has the right to demand a full refund.

What the Michigan Lemon Law Covers

Michigan's lemon law, formally called the New Motor Vehicle Warranties Act (MCL 257.1401 through 257.1410), protects consumers who purchase or lease new motor vehicles that turn out to have serious defects. The law has been in effect since 1986 and has not been amended during the 2025 or 2026 legislative sessions.

Under MCL 257.1401, a "new motor vehicle" is one that is purchased or leased in Michigan (or purchased or leased by a Michigan resident) and is covered by a manufacturer's express warranty at the time of purchase or lease.

Covered Vehicle Types

The statute specifically covers vehicles designed as:

• Passenger cars (sedans, coupes, hatchbacks)
• Sport utility vehicles
• Pickup trucks
• Vans and minivans
• Leased new vehicles under manufacturer warranty
• Demonstrator vehicles with active manufacturer warranty

Vehicles Not Covered

The following vehicle types are excluded from coverage:

• Motor homes (the living quarters portion is excluded)
• Buses
• Trucks other than pickup trucks and vans
• Vehicles designed to travel on fewer than four wheels (motorcycles, three-wheelers)
• Off-road vehicles not designed for highway use
• Used vehicles without an active manufacturer warranty

Who Qualifies as a "Consumer"

Michigan's lemon law defines "consumer" broadly under MCL 257.1401. You qualify if you:

• Purchase or lease a new motor vehicle for personal, family, or household use (not for resale)
• Purchase or lease fewer than 10 new motor vehicles per year
• Purchase or lease 10 or more vehicles per year, but only if all are for personal, family, or household use

This definition means that small business owners who buy a personal vehicle are protected, while large fleet purchasers buying for commercial resale are not.

The Lemon Law Presumption

Under MCL 257.1403, Michigan law creates a legal presumption that a manufacturer has had a reasonable number of repair attempts. When this presumption applies, the burden shifts to the manufacturer to provide a remedy. The two thresholds carry different time windows and both trigger separate consumer notice obligations.

When the Presumption Applies

Notice that the two thresholds use different clocks. The repair-attempts path runs from the first repair attempt for the defect and allows two years. The out-of-service path is tied to the warranty period or first year of ownership. Meeting either threshold is sufficient.

Written Notice Trigger and Final Repair Window

Before pursuing remedies, you must send written notice to the manufacturer. The notice obligation is triggered by whichever comes first:

• After the third failed repair attempt for the same defect
• After the vehicle has been out of service for at least 25 cumulative days

The notice must be sent by return receipt service (certified mail with return receipt requested). Once the manufacturer receives notice, it must direct you to a reasonably accessible repair facility. The manufacturer then has 5 business days to attempt one final repair. If the defect persists after that attempt, you may demand your remedy.

What Counts as a "Substantial" Defect

Not every vehicle problem triggers lemon law protection. The defect must "substantially impair the use or value" of the vehicle. Examples of qualifying defects include:

• Engine or transmission failures that affect drivability
• Persistent stalling, misfiring, or failure to start
• Brake system malfunctions
• Steering defects that create safety hazards
• Electrical system failures affecting critical safety components
• Air conditioning or heating failures
• Significant water leaks into the passenger compartment
• Persistent dashboard warning lights indicating serious mechanical issues

Minor cosmetic issues, squeaks, rattles, or problems that do not affect the vehicle's safety, operation, or market value typically do not qualify.

Consumer Remedies: Refund or Replacement

When a vehicle qualifies as a lemon, Michigan law gives the consumer a meaningful choice between two remedies. Importantly, the consumer holds the power to demand a refund rather than accept a replacement.

Option 1: Full Refund (Buyback)

Under MCL 257.1403, a refund includes:

• The full purchase price of the vehicle
• All collateral charges, including sales tax, license fees, registration fees, and title fees
• Towing costs the consumer incurred because of the defect
• Reasonable rental car costs for a comparable vehicle
• Loan payoff to the lienholder to satisfy the remaining balance

Usage Deduction: The manufacturer may subtract a reasonable allowance for the consumer's use. Michigan's statute specifies the formula precisely:

Usage Deduction = Purchase Price x (Miles Before First Defect Report + Miles Beyond 25,000) / 100,000

The numerator combines two amounts: (1) all miles driven before the consumer first reported the defect, and (2) all miles driven beyond 25,000 total odometer miles (regardless of when the defect was reported). The denominator is always 100,000 miles.

However, courts and arbitrators may reduce this deduction. Under MCL 257.1403(3), if the consumer presents evidence that the vehicle "did not provide reliable transportation for ordinary personal use" beyond the first 25,000 miles, the mileage offset for that period may be lowered. Also, the usage deduction does not apply when the consumer selects a replacement vehicle instead of a refund.

Option 2: Replacement Vehicle

Instead of a refund, the manufacturer may offer a replacement that is:

• A comparable motor vehicle currently in production
• Acceptable to the consumer
• Covered by a full manufacturer warranty

Michigan law states clearly that "a consumer shall have the right to demand a refund." The manufacturer cannot force you to accept a replacement if you prefer a refund.

How to File a Lemon Law Claim in Michigan

Filing a successful lemon law claim requires careful documentation and strict compliance with procedural requirements.

Step 1: Document Everything

Start keeping records from the first sign of trouble:

• Save all repair orders, invoices, and work orders
• Record dates your vehicle entered and left the repair shop
• Write down the symptoms you experienced each time
• Keep all correspondence with the dealer and manufacturer
• Take photos or video of the defect when possible
• Save receipts for rental cars and towing

Step 2: Allow Repair Attempts

Give the dealer or manufacturer at least three opportunities to repair the same defect before sending your written notice. Alternatively, if your vehicle has been out of service for 25 or more cumulative days, you may proceed with notice at that point.

Step 3: Send Written Notice

After the third failed repair or 25 days out of service, send certified mail with return receipt requested to the manufacturer's customer service address. Keep copies of everything.

Step 4: Deliver the Vehicle for Final Repair

The manufacturer must direct you to a reasonably accessible repair facility. Deliver the vehicle and allow 5 business days for the final repair attempt.

Step 5: Pursue Your Remedy

If the manufacturer fails to fix the defect during the final repair window, you can demand a refund or replacement. If the manufacturer refuses, you have two paths forward.

Dispute Resolution and Litigation

Manufacturer Arbitration Programs

Under MCL 257.1405, if the manufacturer has established an informal dispute settlement procedure that complies with federal regulations under the Magnuson-Moss Warranty Act (16 CFR Part 703), the consumer must first use that procedure before filing a lawsuit.

Several major manufacturers use the BBB AUTO LINE program for dispute resolution. This process is free for consumers and involves presenting your case to a neutral arbitrator. The arbitrator's decision binds the manufacturer, but the consumer is not required to accept it.

If you go through manufacturer arbitration and are unsatisfied with the result, you retain your right to file a lawsuit.

Federal Magnuson-Moss Warranty Act Overlay

The federal Magnuson-Moss Warranty Act (15 U.S.C. 2301 et seq.) operates alongside Michigan's state lemon law as the federal backstop for warranty disputes. It applies to any consumer product sold with a written warranty, including motor vehicles. Under Magnuson-Moss, consumers who prevail in a warranty lawsuit may recover attorney fees and costs even when the state lemon law thresholds have not been met. This means used vehicle buyers who still have an active written warranty, or consumers whose defects surfaced after the one-year state window, may still have a viable federal claim.

Filing a Lawsuit

You may file suit in Michigan circuit court if:

• No manufacturer arbitration program exists, or
• You have completed the arbitration process and rejected the decision

Under MCL 257.1407, a consumer who prevails in a lemon law lawsuit may recover costs, expenses, and attorney fees based on actual time expended by the attorney. This fee-shifting provision means many lemon law attorneys represent consumers at no upfront cost.

Manufacturer Defenses

Manufacturers may raise several defenses to avoid liability. Understanding these defenses helps consumers build stronger claims.

Under MCL 257.1406, the lemon law does not apply to defects that result from accident, abuse, neglect, or unauthorized modification by anyone other than the manufacturer, its agent, or the dealer.

Protections for Used Vehicle Buyers

Michigan's lemon law primarily covers new vehicles. However, some used vehicle buyers may still have protections.

Used Vehicles With Possible Coverage

• Active manufacturer warranty: If the original manufacturer warranty has not expired, subsequent owners may have rights under the lemon law
• Certified Pre-Owned (CPO) vehicles: Manufacturer-backed CPO warranties may provide coverage
• Transferred warranty rights: If the warranty transfers to the second owner per the warranty terms

Federal Backstop for Used Buyers

Even when Michigan's state lemon law does not apply, the Magnuson-Moss Warranty Act (15 U.S.C. 2301) may protect consumers with used vehicles still under a written warranty. Because Magnuson-Moss covers any consumer product with a written warranty, a used-car buyer who gets a defective vehicle while an unexpired manufacturer warranty is in effect can pursue a federal warranty claim and recover attorney fees if successful.

Title Branding for Buyback Vehicles

Under MCL 257.1408, the Michigan Secretary of State must include a written statement with any new motor vehicle title informing consumers of their lemon law rights. When a vehicle is returned under the lemon law, the manufacturer must ensure proper disclosure on the title so that future buyers know the vehicle was a lemon law buyback.

Time Limits and Extensions

Understanding the deadlines for a Michigan lemon law claim is critical for protecting your rights.

Key Timeframes

• Repair-attempts clock: Four or more repair attempts must occur within 2 years of the first repair attempt for that defect
• Out-of-service clock: 30 or more cumulative days must occur during the manufacturer's warranty term or within 1 year of delivery, whichever is earlier
• Initial reporting window: The consumer must first report the defect during the warranty term or within one year of delivery
• Continuing repairs: If a defect was first reported during the warranty period, repairs may continue after the warranty expires as part of the same repair attempt

Warranty Extensions

The warranty term and the one-year period are extended if repair services are unavailable because of war, invasion, strike, fire, flood, or other natural disaster. This ensures consumers are not penalized for circumstances outside their control.

Filing a Complaint With the Attorney General

In addition to pursuing remedies directly through the manufacturer, consumers may file a complaint with the Michigan Attorney General's Consumer Protection Division. The AG's office can informally mediate disputes between consumers and manufacturers.

To file a complaint, contact:

• Online: Visit michigan.gov/ag/complaints
• Phone: 877-765-8388
• Mail: Consumer Protection Division, P.O. Box 30213, Lansing, MI 48909

While the Attorney General's office does not directly enforce the lemon law on behalf of individual consumers, a complaint can apply pressure on the manufacturer and create a record of the dispute.

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