Newly Passed Laws for Drivers in the Philippines- The Lemon Law

They say that many Filipinos are undisciplined when it comes to following traffic rules and regulations. And while there’s some weight to it, we think that in most cases, these actions are the result of ignorance, and not a deliberate attempt to evade the law. Bills that turn into laws often don’t make it to the front page of a newspaper (except in extraordinary and urgent cases). Most of them are sandwiched in-between pages or placed in obscure places, and really, who has time to browse for them anyway?

It’s easy to see why many of these driving and traffic regulations are taken for granted. But still, they’re important – especially for drivers who brave through our tangled and traffic-infested roads. There are a handful of bills (and even memorandums) that have been approved and enforced already, so over the next few weeks Carmudi will be giving you a rundown of the most recent car regulations to keep you updated. After all, we’re all mature and responsible drivers here, right? Right. So let’s start the “car” rolling.

The Philippine Lemon Law Of 2014 or an Act Strengthening Consumer Protection in the Purchase of Brand New Motor Vehicles and for Other Purposes)

We think that the Lemon Law Philippines is one of the most important laws that has been passed recently, so we made it first on our list for our driving rules and regulations series.

What is the Lemon Law?

Republic Act No. 10642, or simply the Lemon Law, provides “full protection to the rights of consumers in the sale of motor vehicles against business and trade practices which are deceptive, unfair or otherwise inimical to consumers and the public interest”.

Simply stated, you have a right to return a brand new car (or reimburse your payment) for as long as it falls under “the period ending twelve (12) months after the date of the original delivery of a brand new motor vehicle to a consumer or the first twenty thousand (20,000) kilometers of operation after such delivery, whichever comes first.”

Note that you’re only allowed within the time frame of 12 months to file your complaint. By complaint we mean the “defect or condition that significantly impairs the use, value or safety of your brand new motor vehicle and prevents it from conforming to the car dealer or manufacturer’s standards or specifications”.

Why is it called the Lemon Law?

You might probably be wondering why it's called a Lemon Law. Back in the 1800s, people would describe others who were unfriendly, sour, or unpleasant as 'lemons'. And in 1909, it was first recorded as an American English slang word to describe a ‘worthless thing’. Over time, the term 'lemon' became associated with any broken or defective object that constantly breaks down—especially cars- hence a “lemon car”.

Which vehicles are included?

When we say motor vehicles, we mean any self-propelled, four-wheeled road vehicle designed to carry passengers, including, but not limited to the following:

• Sedans
• Asian Utility Vehicles (AUVs)
• Convertibles
• Coupes
• Pick-Ups
• Sports Utility Vehicles (SUVs)
• Station Wagons
• Vans

Which vehicles Are excluded?

Motorcyles and tricycles are not included here, and neither are buses. Other vehicles excluded from the list include the following:

• Trolley Cars
• Street Sweepers
• Sprinklers
• Lawn Mowers
• Dump Trucks
• Road Rollers
• Delivery Trucks

Vehicles that run on tracks or rails, tractors, trailers and traction engines of all varieties used solely for agricultural functions are also not included, and neither are heavy equipment vehicles, such as, but not limited to:

• Amphibian Trucks
• Bulldozers
• Cranes
• Forklifts
• Graders
• Payloaders

How does the Lemon Law work?

Let’s say your new car has broken down. You need to immediately go to your authorized dealer, manufacturer, distributor, or retailer and file your complaint against them.

Once they receive your complaint, they will be given four (4) separate attempts to repair the motor vehicle.

We’d like to repeat this again: your new car must be repaired at least four (4) times before you can invoke your Lemon Law right. Take note that one (1) repair attempt means that you should return your vehicle 30 days from its release. Otherwise, it will be considered a successful repair (and a done deal).

Since you’re not using your car during the time of repair, you can choose to either get a service vehicle or a daily transportation allowance from your car dealer. If you choose daily allowance, then it will cover your transportation from your residence to your workplace (or from any starting point to your destination, equivalent to an air-conditioned taxi fare, as evidenced by official receipt). Another option for your transportation allowance is a fixed amount of money given for a certain period of time.

Once they have reached four unsuccessful repair attempts, then you can now invoke your Lemon Law right. You must send a written notice to the manufacturer or authorized dealer of the unresolved complaint (Notice of Availment of Lemon Law Rights), and your intent to invoke your rights under the Lemon Law. You also need to bring your car again to the car distributor for a final attempt to address your complaint (and for them to work out a way to resolve it).

When all else fails, then you can go the DTI to file your grievances. Once the DTI sees your complaint as valid, it will demand that your car dealer either:

1) Replace your  motor vehicle with a similar or comparable motor vehicle in terms of specifications and values, subject to availability; or

2) Accept the return of the motor vehicle and pay the purchase price plus the collateral charges (like fees paid to the Land Transportation Office or LTO for the registration of a brand new motor vehicle and other expenses, such as insurance, etc.)

Whichever the case, your dealer or car manufacturer will often choose the option that will cost them less. This, however, might now work for you, so you can ask the DTI to help you resolve this matter.

What happens to the defected car you’ve complained about?

Oftentimes, the defected cars are returned to the car manufacturer and are then repaired and sold again. But before they can do this, the car dealer should make sure to disclose in writing ALL of the following information before they sell or transfer the repaired car to another prospective buyer:

• The motor vehicle was returned to the manufacturer, distributor, authorized dealer or retailer;
• The nature of the nonconformity (or defects) which caused the return; and
• The condition of the motor vehicle at the time of the transfer to the manufacturer, distributor, authorized dealer or retailer.

What if they don’t disclose these information? They get slapped with a P100,000 fine right on their faces. This serves as a fine lesson for businesses to always practice honesty in the first place.