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Most, but not all, states demand that defective vehicle owners submit to the arbitration process before they file a lawsuit. Unfortunately, most folks have no idea what arbitration is and how it helps auto lemon owners.

Lemon Law Arbitration: Why It Was Designed

The two most expensive items people will ever purchase are a home and car. The costs of both generally exceed more than $20,000 and, when you pay that much for a vehicle, you certainly want a vehicle that’s both safe and reliable… for years. Of course, people pay for what they get and they either have the vehicles until one of two things:

- They’re tired of it
- It’s beyond drivable

There are, on some occasions, where people have purchased a vehicle that left a nasty metallic taste in their mouth or a pit at the bottom of their stomach because it didn’t even live up to the standards stipulated in the manufacturer warranty when it was bought.  In fact, the manufacturer is supposed to handle those issues themselves but they rebuffed you, for whatever reason.

This is the reason for a lemon law – they’re designed to help and protect people from defective automobiles when manufacturers refuse to cooperate or don’t agree that a problem exists. It wasn’t too long ago that consumers, who wanted to use the lemon law, had to hire a lawyer and file a lawsuit. To say this process isn’t drawn-out, costly and tedious is an outright lie because it’s every bit those. And, because of this, some states and manufacturers have permitted the use of arbitration to deal with any lemon law cases.

What Happens During The Arbitration Process

Now, arbitration allows both sides (manufacturer and owner) to present their case to one or more persons. These persons will render a decision based on the facts presented that’ll favor either the consumer or the manufacturer. It’s not unheard of for the manufacturer to choose the panels. After all, most manufacturers have arbitration programs in most states.  Some states, however, will create an arbitration panel all their own, separate from the manufacturer’s program.

Whatever the case may be, these folks must be impartial and have no direct bonds to the manufacturer.  In several cases, the panel members are either present or former auto dealers or mechanics.

An arbitration hearing doesn’t generally cost more than $50 for the owner. Very reasonable… if you consider how much an attorney will charge you to deal with the lemon law case. The system is created so the panel will make a decision quickly and the owner gets relief without time being wasted.

The majority of states hold arbitration hearing results to be binding to the manufacturer, not the owner. If the arbitration panel decides in favor of the owner, the manufacturer can do one of two things:

- Replace their vehicle with another
- Refund them the money of their vehicle

If the decision comes back in favor for the manufacturer, the owner keeps his/her right to file a lawsuit.

Really, arbitration works very well for both owners and manufacturers, as cases are dealt with in a timely fashion. What do you really have to lose?

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