Vermont Lemon Law (2026): How to Qualify and Get a Refund

Vermont's lemon law protects buyers of new passenger vehicles, generally those under 12,000 pounds, when a defect cannot be fixed. Under 9 V.S.A. § 4172, Vermont presumes a vehicle is a lemon after three repair attempts for the same problem or 30 calendar days out of service during the warranty period. The consumer chooses between a full refund or a replacement vehicle.

Vermont's lemon law gives vehicle owners a clear path to a refund or replacement when a new car, truck, or SUV has a defect the manufacturer cannot fix. Codified at 9 V.S.A. §§ 4170-4181, the law has protected consumers since 1984. Vermont also funds its arbitration program through a modest $8 motor vehicle warranty fee collected at registration under 23 V.S.A. § 476, so consumers pay nothing out of pocket to file a claim.

This guide covers which vehicles qualify, how to build your case, what remedies are available, and how to navigate the free state arbitration process.

What Vehicles Are Covered

Vermont's lemon law defines coverage based on vehicle type, weight, and warranty status.

Covered Vehicle Types

• Passenger motor vehicles purchased, leased, or registered in Vermont
• Trucks with a gross vehicle weight rating (GVWR) of 12,000 pounds or less
• SUVs and crossovers under 12,000 pounds GVWR
• Passenger and cargo vans under the weight limit
• Electric vehicles, hybrids, and plug-in hybrids (as long as they meet the weight and warranty requirements)

Vehicles Not Covered

• Tractors
• Motorized highway building equipment
• Road-making appliances
• Snowmobiles
• Motorcycles and motor-driven cycles (Vermont defines a motor-driven cycle in 23 V.S.A. § 4 as a two- or three-wheeled vehicle of no more than 50 cubic centimeters that tops out at 30 mph, the class most riders call a moped)
• Living portions of recreation vehicles
• Trucks with GVWR over 12,000 pounds

This exclusion list comes from the lemon law's own definition of "motor vehicle" in 9 V.S.A. § 4171. The lemon law's coverage test, described next, also turns on whether the vehicle remains under the manufacturer's express warranty rather than on a specific weight cutoff, so confirm your vehicle's status with the Vermont DMV before relying on a weight figure alone.

What Counts as a "New Motor Vehicle"

Under 9 V.S.A. § 4171, a "new motor vehicle" means a passenger motor vehicle that is still under the manufacturer's express warranty. This broad definition means a used vehicle may qualify if it remains covered by the original factory warranty.

Who Qualifies as a Consumer

A "consumer" under Vermont's lemon law includes:

• The purchaser of a new motor vehicle (not for resale)
• The lessee of a new motor vehicle (not for sublease and not previously leased)
• Any person to whom the vehicle transfers during the warranty period
• Any person entitled by warranty terms to enforce warranty obligations

Governmental entities are excluded. Business or commercial enterprises that register or lease three or more motor vehicles also do not qualify.

Vermont's Lemon Law Presumption

Under 9 V.S.A. § 4172(g), Vermont law creates a rebuttable presumption that a reasonable number of repair attempts have been undertaken when certain conditions are met.

Two Ways to Qualify

Vermont offers two filing methods. A consumer needs to satisfy only one.

Repair Documentation Requirements

For repair attempts to count toward the presumption:

• Each attempt must be supported by a written examination or repair order.
• Manufacturers, their agents, and authorized dealers cannot refuse to provide a written repair order under 9 V.S.A. § 4172(d).
• The presumption applies to three repair attempts by the same agent or authorized dealer, unless the consumer shows good cause for visiting a different dealer.
• Each repair order should include dates, mileage, a written summary of the complaint, and a fully itemized statement of all work performed.

What "Substantially Impairs" Means

The defect must substantially impair the use, market value, or safety of the motor vehicle. Minor or cosmetic issues typically do not qualify. Examples of qualifying defects include persistent engine stalling, repeated transmission failures, brake system malfunctions, and electrical problems that affect vehicle operation.

Extension of Time Periods

The warranty term and 30-day out-of-service period are extended by any time during which repair services were not available due to war, invasion, strike, fire, flood, or other natural disaster. If an extension applies, the manufacturer must provide a free loaner vehicle during the out-of-service period.

Consumer Remedies: Refund vs. Replacement

When a vehicle qualifies as a lemon under Vermont law, 9 V.S.A. § 4172(e)(1) gives the consumer the choice of remedy, exercised within 30 days of the effective date of the Board's order.

Option 1: Replacement Vehicle

The manufacturer must replace the defective vehicle with:

• A new motor vehicle from the same manufacturer (if available)
• Comparable worth to the same make and model
• All options and accessories originally included
• Appropriate adjustments for model year differences

Option 2: Full Refund (Buyback)

The manufacturer must accept return of the vehicle and refund:

• The full purchase price as indicated in the purchase contract
• All credits and allowances for any trade-in or down payment
• Finance charges and credit charges
• Registration fees
• Similar charges and incidental and consequential damages where applicable

Reasonable Allowance for Use

The manufacturer may deduct a reasonable allowance for use. Vermont law calculates this with a specific formula:

Allowance = (Full Purchase Price x Miles Before First Repair) / 100,000

The deduction is based only on miles driven before the first repair attempt for the defect, not the total miles on the vehicle at the time of the buyback.

Sales Tax Refund

If the manufacturer refunds the purchase price, Vermont also refunds the motor vehicle purchase and use tax to the consumer in a proportionate amount. The consumer must file a claim with the Commissioner of Motor Vehicles within 90 days of the effective date of the order.

Penalty for Late Compliance

Under 9 V.S.A. § 4173(f), the manufacturer must pay the refund amounts set out in 9 V.S.A. § 4172(e) or (i) within 30 days of the facsimile transmission confirmation receipt of the Board's decision, or within 15 days of final adjudication. If the manufacturer fails to complete the transaction by the effective date of the order, the consumer receives an additional 10% of the total award. The statute states that penalty flatly and lists no exceptions to it.

How to File a Lemon Law Claim in Vermont

Vermont provides a free state-administered arbitration process. There is no filing fee or cost assessed against the consumer.

Step 1: Document Everything

• Keep all repair orders showing dates, mileage, and work performed.
• Obtain written repair orders for each visit (dealers must provide these by law).
• Note the specific symptoms and problems each time they occur.
• Save all correspondence with the dealer and manufacturer.
• Take photos or videos of defects when possible.

Step 2: Report and Allow Repairs

Report the nonconformity to the manufacturer, its agent, or authorized dealer during the warranty term. Allow a reasonable number of repair attempts. For Method A claims, this typically means at least three attempts for the same problem.

Step 3: Send Written Notice and Elect Your Forum

After a reasonable number of repair attempts, or after 30 cumulative calendar days out of service, 9 V.S.A. § 4173(a)(1) requires you to notify the manufacturer and the lessor in writing, on forms the manufacturer supplies when the vehicle is delivered, of the defect and of your election to proceed under the lemon law.

That notice must also state which forum you choose. Section 4173(a)(2) gives you two options: the dispute settlement or arbitration mechanism the manufacturer runs, or the Vermont Motor Vehicle Arbitration Board. The choice is a one-way door. Section 4173(a)(3) provides that the consumer's election "shall preclude his or her recourse to the method not selected," so choosing the manufacturer's program closes off the state Board, and choosing the Board closes off the manufacturer's program. Compare the two before you send the notice.

Any provision or agreement that purports to waive, limit, or disclaim your rights under the chapter is void as contrary to public policy, except in a settlement agreement between you and the manufacturer or where federal law requires otherwise.

Step 4: Manufacturer's Final Repair Attempt

Before the claim proceeds to a hearing, the manufacturer may request a final opportunity to repair the vehicle within the 45-day arbitration period. Any right to a final repair attempt is waived if the manufacturer does not complete it at least five days before the scheduled hearing.

If the final repair resolves the problem to the consumer's satisfaction, the arbitration proceedings terminate without prejudice. Under the 2023 amendment to 9 V.S.A. § 4173(d), the consumer retains the right to refile if the repair proves unsatisfactory within one year following the expiration of the express warranty term.

Step 5: File a Demand for Arbitration

File a Demand for Arbitration using Form VN-219, available from the Vermont DMV Lemon Law page at dmv.vermont.gov. On the form, indicate whether you are requesting a refund or a replacement vehicle.

Include copies of:

• All repair orders and service records
• The purchase or lease agreement
• Warranty documentation
• Any correspondence with the manufacturer or dealer

Mail the completed form and documentation to:

Motor Vehicle Arbitration Board PO Box 6 Fairfax, VT 05454

Send a copy to the manufacturer as well. A claim will be returned if required enclosures are omitted.

Step 6: Arbitration Hearing

Hearings are held monthly. Cases may be resolved by settlement, acceptance of a final repair attempt, or administrative dismissal before reaching a hearing. At the hearing, you may represent yourself or bring an attorney.

Keep Making Your Loan or Lease Payments

This is the trap that ends Vermont lemon law claims. 9 V.S.A. § 4173(b) states that "a consumer cannot pursue a remedy under this chapter if he or she has discontinued financing or lease payments."

Owners of a car that will not run reasonably ask why they should keep paying for it. In Vermont, stopping those payments forfeits the lemon law remedy outright, no matter how strong the defect evidence is. Keep the loan or lease current while the claim is pending. If you win, the refund under 9 V.S.A. § 4172(e) returns the purchase price along with your finance and credit charges.

Filing Deadline

Under 9 V.S.A. § 4179(a), any proceeding initiated under the lemon law chapter must be commenced within one year following the expiration of the express warranty term, which ends at the stated time or mileage limit, whichever comes first. That one-year limit runs against proceedings under the whole chapter, not only against Board arbitration, so missing it closes off the chapter's remedies rather than merely the state arbitration route. Claims under other law, such as a federal Magnuson-Moss action or a Vermont Consumer Protection Act claim, carry their own separate deadlines.

Vermont Motor Vehicle Arbitration Board

The Vermont Motor Vehicle Arbitration Board is established under 9 V.S.A. § 4174 to hear and decide lemon law claims.

Board Composition

The Governor appoints five members and three alternates to three-year terms:

• One member and one alternate who are new car dealers in Vermont
• One member and one alternate who are active automobile technicians
• Three members and one alternate who have no direct involvement in the design, manufacture, distribution, sales, or service of motor vehicles or their parts

This composition ensures a balanced perspective with both industry expertise and consumer representation.

Hearing Process

• Hearings are less formal than court proceedings.
• Both parties present evidence and testimony.
• The Board issues a written decision, mailed to the consumer and transmitted to the manufacturer by facsimile.
• A manufacturer ordered to pay a refund must do so within 30 days of the facsimile transmission confirmation receipt of the decision, or within 15 days of final adjudication (9 V.S.A. § 4173(f)).

Possible Outcomes

Appeals

A Board decision is not subject to ordinary appellate review, and this is one of the most commonly misunderstood parts of the process. Under 9 V.S.A. § 4176(a)(1), the Board's decision is final unless a motion for reconsideration accompanied by new evidence is filed within 30 days of the consumer's receipt of the decision. The Board may let the other side respond and may reconvene the hearing.

Once the decision is final, a Superior Court may modify or vacate it only if a party to the arbitration proves by clear and convincing evidence one of four narrow grounds:

• The decision was procured by corruption, fraud, or other undue means
• There was evident partiality by the Board, or corruption or misconduct by the Board that prejudiced a party's rights
• The Board exceeded its powers
• The Board refused to postpone a hearing after sufficient cause was shown, refused to hear evidence material to the controversy, or otherwise conducted the hearing contrary to its own rules so as to substantially prejudice a party

There is no re-argument of the merits on that list. An application to vacate or modify must be made within 30 days after delivery of the final decision, except that one predicated on corruption, fraud, or other undue means may be made within 30 days after those grounds are known or should have been known. Section 4176(a)(2) also provides that if the decision is confirmed, the prevailing party is awarded the attorney's fees incurred in obtaining confirmation plus all costs. Under § 4176(b), when a Superior Court judgment affirms a Board decision, further review requires permission of the presiding judge, and that permission may be conditioned on the appellant paying the other side's appellate attorney's fees and giving security for costs, expenses, and financial loss caused by the delay.

Manufacturer Obligations and Defenses

Vermont law places specific obligations on manufacturers and limits the defenses they can raise.

Manufacturer Disclosure Requirements

Manufacturers must:

• Clearly disclose any informal dispute settlement procedures in the warranty or owner's manual
• Provide written repair orders to consumers at each service visit, including a summary of the complaint and itemized work performed
• Comply with Board orders within the specified timeframe or face a 10% penalty

Common Manufacturer Defenses

Dealer Liability Protection

Vermont's lemon law explicitly states that new motor vehicle dealers and used motor vehicle dealers cannot be sued under this chapter. All claims must be directed at the manufacturer.

Federal Magnuson-Moss Warranty Act Overlay

Vermont's state lemon law operates alongside the federal Magnuson-Moss Warranty Act (15 U.S.C. §§ 2301-2312), which applies to any consumer product sold with a written warranty, including motor vehicles. If a manufacturer fails to honor its written warranty after a reasonable number of repair attempts, a consumer may pursue a Magnuson-Moss claim in federal or state court independent of the Vermont arbitration process. Magnuson-Moss also allows recovery of attorney fees when the consumer prevails, which can make it a powerful supplement to a state lemon law claim, particularly for used vehicles that remain under a factory warranty but fall outside a stricter state eligibility window.

Used Vehicle Protections

Vermont provides broader used vehicle coverage than many states.

Used Vehicle Lemon Law Coverage

Used vehicles qualify under Vermont's lemon law if:

• The vehicle is still covered by the manufacturer's express warranty
• The first repair for the claimed defect occurred within the warranty period
• All other eligibility requirements are met

Because Vermont defines "new motor vehicle" as any passenger motor vehicle under the manufacturer's express warranty, a two- or three-year-old vehicle with remaining factory warranty coverage may still qualify.

Additional Used Vehicle Protections

Beyond the lemon law, Vermont used vehicle buyers may have recourse through:

• The federal Magnuson-Moss Warranty Act for vehicles with unexpired warranties
• The Vermont Consumer Protection Act (9 V.S.A. Chapter 63) for unfair and deceptive practices
• Common law warranty claims for breach of express or implied warranty

Leased Vehicle Coverage

Vermont's lemon law provides specific protections for lessees, with the refund and lease-termination mechanics set out in 9 V.S.A. § 4172(i).

Lease Requirements

Under the definitions in 9 V.S.A. § 4171, to be covered the lease must be:

• A written lease agreement for a term of two or more years
• The vehicle must not have been previously leased by another person

Replacement for Leased Vehicles

If the lessee elects replacement, a collateral change with appropriate adjustments for model year difference or excess mileage is incorporated into an amended lease agreement.

Refund Calculation for Leased Vehicles

If the lessee chooses a refund:

• The lessee receives aggregate deposit and rental payments previously paid, plus incidental and consequential damages, minus the reasonable use allowance and allocated purchase/use tax.
• The lessor receives actual purchase cost, freight, accessories, fees to obtain the lease, and 5% of actual purchase cost (in lieu of early termination costs).

Lease Termination

Upon a Board decision in favor of the lessee:

• The lease agreement and all contractual obligations terminate.
• The lessee owes no further costs to the manufacturer or lessor.
• The motor vehicle lessor must release title to the manufacturer upon payment.

Electric Vehicle Considerations

Vermont's lemon law applies to electric vehicles, hybrids, and plug-in hybrids as long as the vehicle meets the standard eligibility requirements (passenger motor vehicle under 12,000 lbs GVWR and under the manufacturer's express warranty).

EV owners should be aware of a few distinctions:

• Most manufacturers provide a separate battery warranty (typically 8 years or 100,000 miles) in addition to the bumper-to-bumper warranty.
• Battery-related defects that substantially impair the vehicle's use, value, or safety may qualify under the lemon law if the defect occurs within the applicable warranty period.
• Charging system defects, software malfunctions affecting vehicle operation, and drivetrain issues in EVs are treated the same as mechanical defects in traditional vehicles.

More Vermont Laws

• Vermont Car Accident Laws

Frequently Asked Questions

How many repair attempts does Vermont require before a vehicle qualifies as a lemon?

Vermont's lemon law presumption requires three or more repair attempts for the same nonconformity (Method A), or 30 or more cumulative calendar days out of service for repairs during the warranty (Method B). At least the first repair attempt must occur within the warranty term.

Does Vermont's lemon law cover used cars?

Yes. Vermont defines a new motor vehicle as any passenger motor vehicle still under the manufacturer's express warranty. A used car with remaining factory warranty coverage may qualify if the first repair for the claimed defect occurred during the warranty period and all other eligibility requirements are met.

Is there a fee to use the Vermont Motor Vehicle Arbitration Board?

No. The arbitration process through the Vermont Motor Vehicle Arbitration Board is free to consumers. Vermont funds the program through an $8 motor vehicle warranty fee collected at vehicle registration under 23 V.S.A. Section 476.

How long do I have to file a Vermont lemon law claim?

Under 9 V.S.A. Section 4179(a), any proceeding under Vermont's lemon law chapter must be commenced within one year following the expiration of the express warranty term, which ends at the stated time or mileage limit, whichever occurs first. The limit applies to proceedings under the whole chapter, not just to Board arbitration, so missing it closes off the chapter's remedies rather than only the state arbitration route.

Can I stop making car payments while my Vermont lemon law claim is pending?

No. 9 V.S.A. Section 4173(b) states that a consumer cannot pursue a remedy under the chapter if he or she has discontinued financing or lease payments. Stopping payments on a defective vehicle forfeits the lemon law remedy entirely, so keep the loan or lease current while the claim is pending. If you win a refund, 9 V.S.A. Section 4172(e) returns the purchase price along with finance and credit charges.

Do I have to choose between the manufacturer's arbitration program and the Vermont Arbitration Board?

Yes, and the choice is binding. Under 9 V.S.A. Section 4173(a), your written notice to the manufacturer and lessor must elect either the manufacturer's dispute settlement or arbitration mechanism or the Vermont Motor Vehicle Arbitration Board. Section 4173(a)(3) provides that the election precludes recourse to the method not selected, so compare both options before sending the notice.

Can I sue a car dealer under Vermont's lemon law?

No. Vermont's lemon law explicitly states that new motor vehicle dealers and used motor vehicle dealers cannot be sued under this chapter. Claims must be directed at the manufacturer. However, consumers may have separate claims against dealers under the Vermont Consumer Protection Act (9 V.S.A. Chapter 63) for unfair or deceptive practices.

What is the reasonable use deduction formula in Vermont?

Vermont calculates the reasonable use allowance as: (Full Purchase Price x Miles Before First Repair Attempt) / 100,000. The deduction is based only on miles driven before the first repair attempt for the defect, not total miles at the time of buyback.

What happens if the manufacturer does not comply with a lemon law order?

Under 9 V.S.A. Section 4173(f), the manufacturer must pay a refund within 30 days of the facsimile transmission confirmation receipt of the Board's decision, or within 15 days of final adjudication. If the manufacturer fails to complete the transaction by the effective date of the order, the consumer receives an additional 10% of the total award. The statute lists no exceptions to that penalty.

Can I appeal a Vermont Arbitration Board decision?

Not in the ordinary sense. Under 9 V.S.A. Section 4176(a)(1), the Board's decision is final unless a motion for reconsideration with new evidence is filed within 30 days of the consumer's receipt of it. After that, a Superior Court may modify or vacate the decision only if a party proves by clear and convincing evidence that it was procured by corruption, fraud, or other undue means; that there was evident partiality, corruption, or misconduct by the Board; that the Board exceeded its powers; or that the Board refused a justified postponement, refused material evidence, or otherwise violated its own rules to a party's substantial prejudice. If the decision is confirmed, the prevailing party is awarded attorney's fees and costs.