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

New Mexico's Motor Vehicle Quality Assurance Act (NMSA 1978, Sections 57-16A-1 through 57-16A-9) covers new vehicles with a manufacturer's express warranty and presumes a lemon after four or more repair attempts for the same defect, or 30 or more cumulative business days out of service, within one year of delivery or the warranty term, whichever is earlier. The manufacturer (not the consumer) selects between replacing the vehicle or issuing a full refund, less a reasonable use allowance.

What Is New Mexico's Lemon Law?

New Mexico's Motor Vehicle Quality Assurance Act (NMSA 1978, Sections 57-16A-1 through 57-16A-9) protects consumers who buy new vehicles that turn out to have serious, unrepairable defects. The law requires manufacturers to replace the vehicle or refund the purchase price when repeated repair attempts fail to fix a problem that substantially impairs the vehicle's use and market value.

The Act also includes a separate provision for used vehicles (Section 57-16A-3.1), which prevents dealers from disclaiming the implied warranty of merchantability for a limited period after sale.

What Vehicles Does the Law Cover?

New Vehicle Coverage

The Motor Vehicle Quality Assurance Act applies to new motor vehicles sold and registered in New Mexico that come with a manufacturer's express warranty, that are normally used for personal, family, or household purposes, and whose gross vehicle weight is less than 10,000 pounds (Section 57-16A-2(F)). Covered vehicle types include:

• Passenger cars (sedans, coupes, hatchbacks, convertibles)
• Motorcycles
• Light-duty trucks and pickup trucks under 10,000 lbs GVWR
• SUVs and crossover vehicles
• Vans and minivans

Vehicles Not Covered

The following vehicles fall outside the Act's protection:

• Vehicles purchased primarily for business, commercial, or agricultural purposes
• Vehicles with a gross vehicle weight of 10,000 pounds or more
• Motor homes, which are not among the vehicle types listed in Section 57-16A-2(F) and commonly exceed that weight limit. The Act contains no rule splitting a motor home into a covered chassis and an uncovered living quarters, so there is no chassis-only claim under New Mexico's lemon law
• Off-road vehicles not designed for highway use
• Vehicles sold without a manufacturer's express warranty

Who Qualifies as a Consumer?

Section 57-16A-2(C) defines a "consumer" as "the purchaser, other than for purposes of resale, of a new or used motor vehicle normally used for personal, family or household purposes, a person to whom such a motor vehicle has been transferred during the duration of an express warranty applicable to the motor vehicle and any other person entitled by the terms of the warranty to enforce the obligations of the warranty."

Three groups therefore qualify: the original purchaser, someone who received the vehicle while the express warranty was still running, and anyone the warranty's own terms allow to enforce it. A subsequent owner who acquires the vehicle while it remains under warranty can invoke the lemon law. The New Mexico Court of Appeals has also held that a person is not a "consumer" under the Act unless he or she uses the vehicle for personal, family, or household purposes (Jones v. General Motors Corp., 1998-NMCA-020).

Lessees are not named in the definition. The word "lessee" does not appear in the definition of "consumer," even though the legislature used it elsewhere in the very same section, at Section 57-16A-2(H)(4). Whether a New Mexico lessee is covered is therefore unsettled. The strongest argument for a lessee runs through the "entitled by the terms of the warranty to enforce the obligations of the warranty" clause, which can apply where the lease and warranty documents give the lessee enforcement rights. Do not assume a lease is covered; have the lease and the warranty reviewed before relying on the Act.

Coverage Period and Reporting Requirements

New Mexico's lemon law coverage operates within a specific time window. Consumers must report nonconformities to the manufacturer, its agent, or its authorized dealer during the express warranty term or within one year following original delivery of the vehicle, whichever is earlier (Section 57-16A-3(A)). There is no mileage cap in the statute.

This "whichever is earlier" language is important. If the manufacturer's express warranty extends beyond one year, the lemon law coverage still ends at the one-year mark from delivery. Conversely, if the warranty expires before one year, the coverage ends when the warranty does.

Written Notice Requirement

The lemon law presumption (discussed below) never applies against a manufacturer unless the manufacturer "has received prior direct written notification from or on behalf of the consumer and an opportunity to cure the defect alleged" (Section 57-16A-3(C)). The same subsection requires the manufacturer to provide written notice and instruction to the consumer, either in the warranty or in a separate notice, of the obligation to file that written notification before invoking the Act's remedies.

Your written notice should include:

• Your name and contact information
• Vehicle details (year, make, model, VIN)
• A description of the nonconformity
• A summary of all repair attempts
• A clear statement requesting a refund or replacement

The Lemon Law Presumption

New Mexico law creates a rebuttable presumption that a manufacturer has had a reasonable number of attempts to repair a vehicle when certain conditions are met.

When the Presumption Applies

Business Days: New Mexico counts business days rather than calendar days for the out-of-service threshold. Weekends and holidays when the dealer is closed do not count toward the 30-day total. This standard tends to work in the consumer's favor because it takes longer to accumulate 30 business days than 30 calendar days, giving more time for the defect to reoccur and strengthen the claim.

What Is a Substantial Nonconformity?

The defect or condition must "substantially impair the use and market value" of the motor vehicle. The statute uses the conjunction "and," meaning both use and market value must be affected. Examples of qualifying nonconformities include:

• Engine problems causing stalling, loss of power, or failure to start
• Transmission defects that affect shifting or drivability
• Brake system malfunctions or repeated failures
• Steering problems that create safety hazards
• Electrical system failures affecting critical vehicle functions
• Air conditioning or heating system failures
• Persistent water leaks causing interior damage
• Safety system malfunctions (airbags, ABS, stability control)
• Excessive oil consumption requiring frequent attention

Minor cosmetic defects, isolated rattles, or problems that do not affect how you use the vehicle or its resale value typically do not qualify.

Extension of Time Periods

The warranty term and out-of-service period may be extended by any period during which repair services were unavailable to the consumer because of conditions beyond the consumer's control, such as natural disasters, strikes, or war.

Consumer Remedies: Refund or Replacement

When a vehicle qualifies as a lemon under the Act, the statute directs the manufacturer to either replace the vehicle or accept its return and issue a refund. Under Section 57-16A-3(B), "the manufacturer shall replace the motor vehicle with a comparable motor vehicle or accept return of the vehicle from the consumer and refund to the consumer the full purchase price." This means the manufacturer selects which remedy to offer; New Mexico does not give the consumer an explicit right to demand one remedy over the other. The only standard the Act sets for a replacement is that it be a "comparable motor vehicle," which Section 57-16A-2(B) defines as "an identical or reasonably equivalent motor vehicle." The Act does not require a replacement to be acceptable to the consumer, so a consumer who objects to an offered vehicle is arguing that it fails the reasonably-equivalent test, not exercising a veto.

Option 1: Replacement Vehicle

The manufacturer provides a comparable motor vehicle, meaning an identical or reasonably equivalent one (Section 57-16A-2(B)). In practice that usually looks like the same make and model with similar equipment, options, and accessories. The Act imposes no duty on the manufacturer to keep proposing substitutes until the consumer is satisfied. A consumer who believes an offered vehicle is not reasonably equivalent has to press that point through the manufacturer's dispute settlement procedure or in court.

Option 2: Full Refund (Vehicle Buyback)

The manufacturer accepts the return of the vehicle and refunds the consumer the full purchase price, including all "collateral charges." Under Section 57-16A-2, collateral charges are defined as additional charges not directly attributed to the manufacturer's suggested retail price, including:

• All applicable taxes
• License fees
• Title and registration fees
• Other governmental charges related to the purchase

The refund is the full purchase price plus 'collateral charges' as statutorily defined above, less a reasonable use allowance; the statute does not separately list towing costs, rental car expenses, or other incidental damages as refund components.

The Usage Deduction

Under both the refund and replacement options, the manufacturer may subtract a reasonable allowance for the consumer's use of the vehicle. Under Section 57-16A-3(B), this use allowance covers only the period before the consumer first reported the nonconformity and any subsequent time when the vehicle was not out of service for repairs.

The statute does not specify a numeric formula, but a common industry calculation is:

Usage Deduction = (Purchase Price x Miles Before First Repair Report) / 120,000

For example, if you paid $40,000 and drove 5,000 miles before reporting the defect, the deduction would be approximately $1,667.

Refund Distribution

When there is an outstanding loan on the vehicle, the manufacturer pays the lender the remaining loan balance and refunds any excess to the consumer. Refunds are distributed to the consumer and any lienholder according to their respective interests.

UCC Remedy Limitation

Under Section 57-16A-5, a consumer who seeks enforcement under the Motor Vehicle Quality Assurance Act cannot also pursue Uniform Commercial Code remedies found in Sections 55-2-602 through 55-2-608 NMSA 1978. You must choose between lemon law remedies and UCC remedies.

Federal Backstop: Magnuson-Moss Warranty Act

New Mexico's state lemon law works alongside the federal Magnuson-Moss Warranty Act (15 U.S.C. 2301 et seq.), which governs written warranties on consumer products nationwide. If a manufacturer fails to honor its written warranty on a vehicle, you may have a claim under Magnuson-Moss even if you do not meet New Mexico's specific lemon law thresholds. A successful Magnuson-Moss claim allows recovery of attorney fees, making it easier to find counsel. In practice, attorneys handling New Mexico lemon law cases typically plead both state and federal claims together.

Dispute Resolution Procedures

New Mexico's lemon law establishes a framework for resolving disputes without going directly to court.

Manufacturer's Informal Dispute Settlement Program

Under Section 57-16A-6, if a manufacturer has established or participates in a fair and impartial informal dispute settlement procedure that substantially complies with the substantive requirements of Federal Trade Commission regulations (16 CFR Part 703), then the refund and replacement provisions of Section 57-16A-3(B) "shall not apply to any consumer who has not first resorted to that procedure." Put plainly: if your manufacturer runs a qualifying program, you have to go through it before you can demand a buyback or a replacement under the Act.

For the program to have that effect, Section 57-16A-6 requires that it be:

• Fair and impartial
• In substantial compliance with the substantive requirements of 16 CFR Part 703, the federal rules that govern accessibility, record keeping, and decision timeframes for warranty dispute settlement mechanisms

The Attorney General's Role

New Mexico does not run a certification program for independent arbitration providers under this Act. Section 57-16A-6 gives the state attorney general a narrower power: the attorney general "may investigate and determine that the informal dispute settlement procedure is fair and impartial and conforms with the requirements of Title 16, Part 703 of the Code of Federal Regulations." That is an investigatory check on a manufacturer's own program, not a state seal of approval a consumer can shop for. BBB AUTO LINE is the program several manufacturers use, but the manufacturer chooses it, not the state.

Court Action

If no qualifying dispute settlement program exists, or if the consumer is dissatisfied with the outcome, the consumer can file a lawsuit. Consumers who win their lemon law case in court are entitled to recover reasonable attorney fees and court costs from the manufacturer (Section 57-16A-9). This fee-shifting provision makes it easier for consumers to find attorneys willing to take lemon law cases on a contingency or fee-recovery basis.

Section 57-16A-9 cuts both ways. The same section provides that if a consumer does not prevail and brought the action "for frivolous reasons or in bad faith, the manufacturer shall be entitled to receive reasonable attorneys' fees and court costs from the consumer." Simply losing a good-faith claim does not trigger that; a claim a court finds frivolous or brought in bad faith does. Weigh that exposure with counsel before you file.

Manufacturer Defenses

Manufacturers may raise several affirmative defenses under Section 57-16A-4 to avoid liability.

Valid Affirmative Defenses

The burden of proving any affirmative defense falls on the manufacturer. Consumers should keep detailed documentation to counter these claims.

Dealer vs. Manufacturer Liability

New Mexico's lemon law places primary responsibility on the manufacturer, not the dealer. However, dealers must provide repair services and documentation. Dealers who engage in deceptive conduct may face separate liability under the New Mexico Unfair Practices Act (Sections 57-12-1 through 57-12-26 NMSA 1978).

Used Vehicle Protections (Section 57-16A-3.1)

New Mexico provides a separate layer of protection for used car buyers. Under Section 57-16A-3.1, a used motor vehicle dealer cannot exclude, modify, or disclaim the implied warranty of merchantability for a limited period after sale.

Duration of Used Car Warranty

The implied warranty of merchantability lasts until midnight of the fifteenth calendar day after delivery or until the vehicle has been driven 500 miles after delivery, whichever comes first.

What "Merchantability" Means

A used motor vehicle meets the implied warranty of merchantability if it functions substantially free of any defect that significantly limits its use for ordinary transportation on public highways.

Required Dealer Disclosure

The purchase agreement must include a conspicuous statement in boldface, 10-point or larger type, set off from the rest of the agreement:

"New Mexico law requires that this vehicle will be fit for the ordinary purposes for which the vehicle is used for fifteen days or five hundred miles after delivery, whichever is earlier, except with regard to particular defects disclosed on the first page of this agreement. You (the consumer) will have to pay up to twenty-five dollars ($25.00) for each of the first two repairs if the warranty is violated."

If the agreement lacks this disclosure, the entire purchase agreement is voidable at the consumer's option.

Consumer Repair Cost Sharing

If the used vehicle does not meet the implied warranty, the seller must have a reasonable opportunity to repair it. The consumer pays one-half the cost of the first two repairs needed to bring the vehicle into compliance, up to $25 per repair.

Consequence of Warranty Violations

Any attempt to exclude, modify, or disclaim the implied warranty in violation of this section makes the purchase agreement voidable at the buyer's option. This gives the consumer the potential right to unwind the entire transaction.

Title Branding and Disclosure

The Motor Vehicle Quality Assurance Act contains two resale-disclosure rules that buyers of used vehicles should know about.

Section 57-16A-7 (resale of a returned vehicle). A motor vehicle that has not been properly repaired under Section 57-16A-3(B), or under a similar law of another state, may not be resold in New Mexico "unless the manufacturer provides full written disclosure of the reason for the return to any prospective buyer."

Section 57-16A-7.1 (notice attached to the vehicle). A manufacturer, its agent, its authorized dealer, or a used motor vehicle dealer that has replaced or repurchased a vehicle under the Act, or that has been ordered by judgment or decree to do so, must attach written notification to the vehicle stating that it was replaced or repurchased before offering it for resale. A consumer or a used motor vehicle dealer may bring a cause of action against a person who removes that notification, unless the seller gave the purchaser written notification of the replacement or repurchase before the sale was completed. This section was added by Laws 2003, Chapter 216, Section 2.

The Act does not itself set out a title-branding procedure, so contact the New Mexico Motor Vehicle Division for how a manufacturer buyback is recorded on a New Mexico title. When you are shopping, look for the notice Section 57-16A-7.1 requires to be attached to the vehicle, check the vehicle history report, and ask the seller directly whether the vehicle was ever returned to a manufacturer as a lemon.

Electric Vehicle Considerations

Electric vehicles (EVs) sold in New Mexico with manufacturer warranties are covered under the Motor Vehicle Quality Assurance Act. As EV adoption grows in the state, understanding how the lemon law applies to these vehicles is increasingly relevant.

Common EV Defects That May Qualify

• Battery degradation significantly beyond normal parameters
• Charging system failures (onboard charger, charging port)
• Range substantially below manufacturer specifications
• Electric motor or drivetrain malfunctions
• Thermal management system failures affecting battery performance
• Software defects affecting vehicle operation or safety
• Regenerative braking system problems

EV-Specific Challenges

• Software updates: Manufacturers may argue that over-the-air updates resolved the issue, potentially resetting the repair attempt count
• Battery warranty: Separate battery warranties (often 8 years/100,000 miles) may complicate coverage analysis
• Limited service options: Fewer New Mexico dealers may have EV-certified technicians
• Documentation: Electrical and software defects may require specialized diagnostic records

Statute of Limitations

Timing is critical when filing a New Mexico lemon law claim.

Key Deadlines

The 18-month and 90-day deadlines work on a "whichever is later" basis. If you go through a dispute settlement program and receive a decision after the 18-month window has passed, you still have 90 days from that decision to file suit.

How to Protect Your Rights

• Report every defect in writing during the warranty period
• Keep copies of all repair orders, invoices, and communications
• Track the number of days your vehicle spends at the dealer for repairs
• Follow manufacturer notice procedures exactly
• Use the manufacturer's dispute settlement program if required before going to court
• Consult a consumer protection attorney if informal resolution fails

Filing a Lemon Law Complaint

If you believe your vehicle qualifies as a lemon, follow these steps:

1. Document everything. Keep every repair order, invoice, and written communication. Record dates the vehicle was dropped off and picked up.
2. Send written notice to the manufacturer. Mail a detailed letter via certified mail describing the defect, listing all repair attempts, and requesting a refund or replacement.
3. Use the manufacturer's dispute settlement program if one exists and complies with FTC regulations.
4. Contact the New Mexico Department of Justice if you need guidance. The office formerly known as the Office of the Attorney General is now the New Mexico Department of Justice. Its consumer protection hotline is 1-844-255-9210, and you can file a complaint online at nmdoj.gov.
5. Consult an attorney. If informal efforts fail, a consumer protection attorney experienced with New Mexico lemon law can evaluate your case. Prevailing consumers recover attorney fees under the Act, and a consumer who loses a claim a court finds frivolous or brought in bad faith can be ordered to pay the manufacturer's fees, so an honest assessment of the claim's strength is worth getting early.

More New Mexico Laws

• New Mexico Car Accident Laws

Frequently Asked Questions

How many repair attempts trigger New Mexico's lemon law?

New Mexico law presumes a vehicle is a lemon after four or more repair attempts for the same nonconformity that substantially impairs the vehicle's use and market value, or after the vehicle has been out of service for 30 or more cumulative business days during the coverage period. The coverage period runs during the express warranty term or one year from original delivery, whichever is earlier.

Does New Mexico count business days or calendar days for the out-of-service period?

New Mexico uses business days for calculating the 30-day out-of-service threshold. Weekends and holidays when the dealer is closed do not count. This is more favorable to consumers than states that use calendar days, because it takes longer to reach the 30-day mark, giving more time for the defect to recur.

Who chooses between a refund and a replacement vehicle in New Mexico?

Under the Motor Vehicle Quality Assurance Act, the manufacturer selects whether to replace the vehicle or accept its return and issue a refund. The statute directs the manufacturer to replace the vehicle or accept return and provide a refund; it does not give the consumer an explicit right to demand one remedy over the other. The only limit on the manufacturer's choice of replacement is that it be a comparable motor vehicle, which Section 57-16A-2(B) defines as an identical or reasonably equivalent motor vehicle. The Act does not require the replacement to be acceptable to the consumer, so a consumer who objects has to show the vehicle is not reasonably equivalent.

Does New Mexico's lemon law cover used cars?

New Mexico has a separate used car protection under Section 57-16A-3.1. Used motor vehicle dealers cannot disclaim the implied warranty of merchantability for 15 calendar days or 500 miles after delivery, whichever comes first. The consumer pays up to $25 for each of the first two warranty repairs. This is not the same as the full lemon law for new vehicles, but it does provide meaningful short-term protection.

How long do I have to file a lemon law claim in New Mexico?

You must file a lawsuit within 18 months of the original delivery date. If you use a manufacturer's informal dispute settlement program, you have 90 days after the panel's final decision to file suit, even if the 18-month window has already closed. Defects must be reported during the express warranty period or within one year of delivery, whichever is earlier.

What is the usage deduction on a New Mexico lemon law refund?

The manufacturer may subtract a reasonable allowance for your use of the vehicle before you first reported the defect. The statute does not specify a fixed formula, but a common calculation is purchase price multiplied by miles driven before first repair report, divided by 120,000. For example, if you paid $40,000 and drove 5,000 miles before the first report, the deduction would be roughly $1,667.

Can I recover attorney fees if I win my lemon law case?

Yes. Under Section 57-16A-9, a consumer who prevails in court is entitled to recover reasonable attorney fees and court costs from the manufacturer. Federal claims under the Magnuson-Moss Warranty Act also carry attorney fee recovery, which is why attorneys will take these cases. The same New Mexico section runs the other way as well: if the consumer does not prevail and brought the action for frivolous reasons or in bad faith, the manufacturer is entitled to reasonable attorneys' fees and court costs from the consumer.