Is a Vehicle Purchase or Lease by a Business Covered by the Arizona Lemon Law?

Whether the vehicle is owned by a business or private consumer is not a deciding factor under the Lemon Law. That means businesses in Arizona do have Lemon Law protection.

The issue is that leases oftentimes are not covered by the Arizona Lemon Law. Although there are other warranty laws that apply leased vehicles, the Arizona Lemon Law has the most teeth.

The reason leases are typically excluded from Lemon Law coverage is due to a 2006 Arizona Supreme Court opinion.  In PARROT v. DAIMLERCHRYSLER, the court said that since the leasing company technically owns a Lemon vehicle and the consumer is renting it from the leasing company, the leasing company would have Lemon Law rights but not the consumer. We strongly disagree with that case, but it’s the law in Arizona.

The problem with a lot of leases is that the leasing company is just a subsidiary financing arm of the manufacturer. If an attorney is involved after the fact because the leased vehicle is a Lemon (or the consumer contacts the company on his or her own), the leasing company is not going to agree to transfer Arizona Lemon Law rights to the consumer because it’s basically part of the manufacturing company.

Many businesses or individual consumers that lease a vehicle have no idea they’re severely constraining their Lemon Law rights by leasing instead of buying. If they knew that, they wouldn’t lease.

One silver lining is if the leasing company is an independent third-party lender, meaning it’s not just the financing arm of the vehicle manufacturer, it will often agree to what’s called an assignment of Lemon Law rights, meaning it will transfer Lemon Law rights to the consumer. When we get those kinds of cases, we send letters to lenders requesting that they transfer Arizona Lemon Law rights to the consumer who is leasing the vehicle or else we will be forced to go after the lenders.

With that being said, it is still best to have Lemon Law rights immediately assigned to the actual consumer (whether it is a business or an individual) when a vehicle leased. We have a form addendum on our website that can be downloaded by any consumer who is considering leasing a vehicle. The form is an assignment or transfer of Arizona Lemon Law rights to the consumer by the leasing company.

You need to request the assignment of Lemon Law rights ahead of time with this addendum and refuse to lease the vehicle if they don’t agree to it. What you can do is tell the car dealer, “I’m not going to lease this vehicle unless the leasing company agrees ahead of time in writing to transfer Lemon Law rights to me. That way if the vehicle turns out to be defective, I would be covered.”

Why Do I Need a Lemon Law Attorney to Help Me with My Arizona Lemon law Claim? Can’t I Just Handle This on My Own?

It’s very important to have a Lemon Law attorney because a motor vehicle is not like a TV; you can’t just go and swap it out without any problems. It’s an expensive product, and the companies are trying to control their costs. The last thing they want to do is buy it back, give you a new vehicle, or compensate you fairly because that’s very expensive for them.

They know that for every ten people who threaten to hire an attorney for a legitimate Lemon Law claim, only one or two will actually make good on that threat. Most people are leery of attorneys and the legal system, and they don’t understand that they can basically get a free attorney because the attorney’s fees are sought under the law from the manufacturer. If more people knew that, they would follow up their threats by actually hiring an attorney.

Remember, these companies are trying to minimize their costs; they’re not trying to do what’s best for you but what’s best for them. They have no fiduciary duty to you. They don’t represent you; they represent themselves. And so, what the companies will often do is try and get you to sign your rights away for just a minimal offer (like a month of payments or short warranty extension or some free maintenance). A lot of people don’t realize they’re signing away substantial rights, such as the right to a vehicle buyback or even thousands of dollars in compensation. Some of these releases might even release other rights, not just Lemon Law rights. They might release rights to compensation even if a consumer is injured—that’s how bad some of these releases are.

If you’re trying to deal with these companies on your own, you’re up against legally trained representatives, at a minimum, and possibly even actual attorneys who deal with the Lemon Law side of things for the company. Unless you’ve gone through four years of college and three years of law school, plus research on the Lemon Law (which they don’t teach you about in law school), you’re at a severe disadvantage as far as knowing what’s available to you and the tricks of the trade.

Imagine if somebody walked into wherever you work and tried to do your job for a day with zero training and zero experience in doing what you do. Do you think there’s any possible way that they could do as good of a job as you? Would they know what to look out for? Of course not, it’s impossible! But for some reason, people think that they can do that with a legal matter.

People won’t ever consider doing surgery on themselves, but they think they can handle a legal matter on their own, which is just as difficult as trying to do surgery on yourself. That’s why it doesn’t make sense to reach out to one of these companies on your own instead of seeking out free legal help.

For more information on the Arizona Lemon Law, a Free Lemon Law Evaluation is your next best step. Please call (480) 237-2744 for Free Lemon Law help today.