Vermont Lemon Law
Vermont State Statutes
Title 9, Chapter 115, Sections 4170 - 4181
Commerce and Trade
New Motor Vehicle Arbitration
As used in this chapter:
(1) "Board" means, unless otherwise indicated, the Vermont motor
vehicle arbitration board.
(2) "Consumer" means the purchaser, other than for purposes of
resale of a new motor vehicle or lessee of a new motor vehicle, other than for the
purposes of sub-lease, which has not been previously leased by another person, any
person to whom such motor vehicle is 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, but "consumer" shall
not include any governmental entity or any business or commercial enterprise which
registers or leases three or more motor vehicles.
(3) "Early termination costs" mean expenses and obligations incurred
by a motor vehicle lessee as a result of an early termination of a written lease
agreement and surrender of a motor vehicle to a manufacturer under the provisions of 9
V.S.A. 4172(e), including penalties for prepayment of finance arrangements.
(4) "Lease or leased" means a written agreement with a lessee as
defined in subdivision (5) of this section, which shall be for the use of a motor
vehicle for consideration for a term of two or more years.
(5) "Lessee" means any consumer who leases a motor vehicle pursuant
to a written lease agreement for a term of two or more years.
(6) "Motor vehicle" means a motor vehicle which is purchased or
leased, or registered in the state of Vermont and is registered in Vermont within 15
days of the date of purchase or lease and shall not include tractors, motorized highway
building equipment, road-making appliances, snowmobiles, motorcycles, mopeds, or the
living portion of recreation vehicles, or trucks with a gross vehicle weight over 10,000
(7) "Manufacturer" means any person, resident or nonresident, who
manufactures or assembles new motor vehicles or imports for distribution through
distributors of motor vehicles or any partnership, firm, association, joint venture,
corporation or trust, resident or nonresident, which is controlled by a manufacturer.
Additionally, the term "manufacturer" shall include:
(A) "distributor," meaning any person, resident or nonresident,
who in whole or in part offers for sale , sells, or distributes any new motor vehicle
to new motor vehicle dealers or new motor vehicle lessor's or maintains factory
representatives or who controls any person, firm, association, corporation, or trust,
resident or nonresident, who in whole or in part offers for sale, sells or distributes
any new motor vehicle to new motor vehicle dealers or new motor vehicle lessor's; and
(B) "factory branch" meaning any branch office maintained by a
manufacturer for the purpose of selling, leasing, offering for sale or lease, vehicles
to a distributor or new motor vehicle dealer or for directing or supervising, in whole
or in part, factory distributor representatives.
(8) "Motor vehicle lessor" means a person who holds title to a motor
vehicle leased to a lessee under a written lease agreement for a term of two or more
years, or who holds the lessor's rights under such an agreement.
(9) A "new motor vehicle" means a passenger motor vehicle which has
been sold to a new motor vehicle dealer or motor vehicle lessor by a manufacturer and
which has not been used for other than demonstration purposes and on which the original
title has not been issued from the new motor vehicle dealer other than to a motor
(10) Warranty shall be defined as including the following:
"Express warranty" means express warranties as defined in the Uniform
Commercial Code2-313, plus any written warranty of the manufacturer.
4172 Enforcement Of Warranties.
(a) Every new motor vehicle as defined in section 4171 of this title sold in
this state must conform to all applicable warranties.
(b) It shall be the manufacturer's obligation under this chapter to insure
that all new motor vehicles sold or leased in this state conform with manufacturer's
express warranties. The manufacturer may delegate responsibility to its agents or
authorized dealers provided, however, in the event the manufacturer delegates its
responsibility under this chapter to its agents or authorized dealers, it shall
compensate the dealer for all work performed by the dealer in satisfaction of the
manufacturer's responsibility under this chapter in the manner set forth in chapter 108
of this title known as the "Motor Vehicle Manufacturers, Distributors and Dealers'
Franchising Practices Act" as that act may be from time to time amended.
(c) If a new motor vehicle does not conform to all applicable express
warranties and the consumer reports the nonconformity to the manufacturer, its agent or
authorized dealer during the term of the warranty, the manufacturer shall cause whatever
repairs are necessary to conform the vehicle to the warranties, notwithstanding the fact
that the repairs are made after the expiration of a warranty term.
(d) A manufacturer, its agent or authorized dealer shall not refuse to provide
a consumer with a written repair order and shall provide to the consumer each time the
consumer's vehicle is brought in for examination or repair of a defect, a written
summary of the complaint and a fully itemized statement indicating all work performed on
the vehicle including, but not limited to, examination of the vehicle, parts and labor.
(e) If, after a reasonable number of attempts, the manufacturer, its agent or
authorized dealer or its delegate is unable to conform the motor vehicle to any express
warranty by repairing or correcting any defect or condition covered by the warranty
which substantially impairs the use, market value, or safety of the motor vehicle to the
consumer, the manufacturer shall, at the option of the consumer within 30 days of the
effective date of the board's order, replace the motor vehicle with a new motor vehicle
from the same manufacturer, if available, of comparable worth to the same make and model
with all options and accessories with appropriate adjustments being allowed for any
model year differences or shall accept return of the vehicle from the consumer and
refund to the consumer the full purchase price or to the lessee in the case of leased
vehicles, as provided in subsection (i) of this section. In those instances in which a
refund is tendered, the manufacturer shall refund to the consumer the full purchase
price as indicated in the purchase contract and all credits and allowances for any
trade-in or down payment, license fees, finance charges, credit charges, registration
fees and any similar charges and incidental and consequential damages or in the case of
leased vehicles, as provided in subsection (i) of this section. Refunds shall be made to
the consumer and lien holder, if any, as their interests may appear or to the motor
vehicle lessor and lessee as provided in subsection (i) of this section. A reasonable
allowance for use shall be that amount directly attributable to use by the consumer
prior to his or her first repair attempt and shall be calculated by multiplying the full
purchase price of the vehicle by a fraction having as its denominator 100,000 and having
as its numerator the number of miles that the vehicle traveled prior to the first
attempt at repairing the vehicle. If the manufacturer refunds the purchase price or a
portion of the price to the consumer, the purchase and use tax shall be refunded by the
state to the consumer in the proportionate amount. To receive a refund, the consumer
must file a claim with the commissioner of motor vehicles.
(f) It shall be an affirmative defense to any claim under this chapter that an
alleged nonconformity does not substantially impair the use, market value or safety or
that the nonconformity is the result of abuse, neglect, or unauthorized modifications or
alterations of a motor vehicle by a consumer.
(g) It shall be presumed that a reasonable number of attempts have been
undertaken to conform a motor vehicle to the applicable warranties if:
(1) the same nonconformity as identified in any written examination or
repair order has been subject to repair at least three times by the manufacturer, its
agent or authorized dealer and at least the first repair attempt occurs within the
express warranty term and the same nonconformity continues to exist, or
(2) the vehicle is out of service by reason of repair of one or more
nonconformities, defects or conditions for a cumulative total of 30 or more calendar
days during the term of the express warranty. The term of any warranty and the 30-day
period shall be extended by any period of time during which repair services were not
available to the consumer because of war, invasion, strike, fire, flood or other
natural disaster. If an extension of time is necessitated due to these conditions, the
manufacturer shall cause provision for the free use of a vehicle to the consumer whose
vehicle is out of service. A vehicle shall not be deemed out of service if it is
available to the consumer for a major part of the day.
(h) In order for an attempt at repair to qualify for the presumptions of this
section, the attempt at repair must be evidenced by a written examination or repair
order issued by the manufacturer, its agent or its authorized dealer. The presumptions
of this section shall only apply to three attempts at repair evidenced by written
examination or repair orders undertaken by the same agent or authorized dealer, unless
the consumer shows good cause for taking the vehicle to a different agent or authorized
(i) In cases in which a refund is tendered by a manufacturer for a leased
motor vehicle under subsection (e) of this section, the refund and rights of the motor
vehicle lessor, lessee and manufacturer shall be in accordance with the following:
(1) The manufacturer shall provide to the lessee, the aggregate deposit and
rental payments previously paid to the motor vehicle lessor by the lessee, and
incidental and consequential damages, if applicable, minus a reasonable allowance for
use and allocated payments for purchase and use tax. The aggregate deposit shall
include, but not be limited to, all cash payments and trade-in allowances tendered by
the lessee to the motor vehicle lessor under the lease agreement. The reasonable
allowance for use shall be calculated by multiplying the aggregate deposit and rental
payments made by the lessee on the motor vehicle by a fraction having as its
denominator 100,000 and having as its numerator the number of miles that the vehicle
traveled prior to the first attempt at repairing the vehicle.
(2) The manufacturer shall provide to the motor vehicle lessor the aggregate
of the following:
(A) the lessor's actual purchase cost, less payments made by the lessee;
(B) the freight cost, if applicable;
(C) the cost for dealer or manufacturer-installed accessories, if
(D) any fee paid to another to obtain the lease;
(E) an amount equal to five percent of the lessor's actual purchase cost
as prescribed in subdivision (2)(A) of this section. The amount in this subdivision
shall be instead of any early termination costs as defined in 4171(3) of this
chapter or as described in the lease agreement.
(3) The purchase and use tax shall be refunded by the state to whomever paid
the tax. The party must file a claim with the commissioner of the department of motor
(4) The lessee's lease agreement with the motor vehicle lessor and all
contractual obligations shall be terminated upon a decision of the board in favor of
the lessee. The lessee shall not be liable for any further costs or charges to the
manufacturer or motor vehicle lessor under the lease agreement.
(5) The motor vehicle lessor shall release the motor vehicle title to the
manufacturer upon payment by the manufacturer under the provisions of this subsection.
(6) The board shall give notice to the motor vehicle lessor of the lessee's
filing of a request for arbitration under this chapter and shall notify the motor
vehicle lessor of the date, time and place scheduled for a hearing before the board.
The motor vehicle lessor shall provide testimony and evidence necessary to the
arbitration proceedings. Any decision of the board shall be binding upon the motor
4173 Procedure To Obtain Refund Or Replacement.
(a) After the third attempt at repair or correction of the nonconformity,
defect or condition, or after the vehicle is out of service by reason of repair of one
or more nonconformities, defects or conditions for a cumulative total of 30 or more
calendar days as provided in this chapter, the consumer shall notify the manufacturer
and lessor in writing, on forms to be provided by the manufacturer at the time the new
motor vehicle is delivered, of the nonconformity, defect or condition and the consumer's
election to proceed under this chapter. The forms shall be made available by the
manufacturer to the Vermont motor vehicle arbitration board, and any other public or
nonprofit agencies that shall request them. Notice of consumer rights under this chapter
shall be conspicuously displayed by all authorized dealers and agents of the
manufacturer. The consumer shall in the notice, elect whether to use the dispute
settlement mechanism and/or the arbitration provisions established by the manufacturer
or to proceed under the Vermont motor vehicle arbitration board as established under
this chapter. The consumer's election of whether to proceed before the board or the
manufacturer's mechanism shall preclude his or her recourse to the method not selected.
(b) A consumer cannot pursue a remedy under this chapter if he or she has
discontinued financing or lease payments if the payments have been discontinued due to
the manufacturer's breach of obligation under this chapter or of a breach of the
(c) Arbitration of the consumer's complaint, either through the manufacturer's
dispute settlement mechanism or the board, must be held within 45 days of receipt by the
manufacturer or the board and the manufacturer of the consumer's notice electing the
remedy of arbitration unless the consumer or the manufacturer has good cause for an
extension of time, not to exceed an additional 30-day period. If the extension of time
is requested by the manufacturer, the manufacturer shall provide free use of a vehicle
to the consumer if the consumer's vehicle is out of service. In the event the consumer
elects to proceed in accordance with the manufacturer's dispute settlement mechanism and
the arbitration of the dispute is not held within 45 days of the manufacturer's receipt
of the consumer's notice and the manufacturer is not able to establish good cause for
the delay, the consumer shall be entitled to receive the relief requested under this
(d) Within the 45-day period set forth in subsection (c) of this section, the
manufacturer shall have one final opportunity to correct and repair the defect which the
consumer claims entitles him or her to a refund or replacement vehicle. If the consumer
is satisfied with the corrective work done by the manufacturer or his delegate, the
arbitration proceedings shall be terminated without prejudice to the consumer's right to
request arbitration be recommenced if the repair proves unsatisfactory for the duration
of the express warranty.
(e) The manufacturer shall refund the amounts provided for in section 4172(e)
or (i) of this chapter within 30 days of a decision of the board or within 15 days of
4174 Vermont Motor Vehicle Arbitration Board.
(a) There is created a Vermont motor vehicle arbitration board consisting of
five members and two alternate members to be appointed by the governor for terms of
three years. Board members may be appointed for two additional three-year terms. One
member of the board shall be a new car dealer in Vermont, one member and one alternate
shall be persons knowledgeable in automobile mechanics, and three members and one
alternate shall be persons having no direct involvement in the design, manufacture,
distribution, sales or service of motor vehicles or their parts. Board members shall be
compensated in accordance with the provisions of 32 V.S.A. 1010. The board shall be
attached to the transportation board and shall receive administrative services from the
(b) The board shall promulgate rules under the provisions of 3 V.S.A. chapter
25 to implement the provisions of this chapter.
(c) The board may issue subpoenas to compel the attendance of witnesses to
testify under oath and to produce documents.
(d) The board shall render a decision within 30 days of the conclusion of a
hearing and has authority to issue any and all damages as are provided by this chapter.
4175 Fees And Costs.
There shall be no filing fee or costs assessed against the consumer for using the
Vermont motor vehicle arbitration board or the manufacturer's dispute settlement
mechanism. In the event an authorized franchise dealer or any of its employees including
mechanics or service personnel are called upon to testify or produce documents, repair
orders or other materials in any arbitration held before the Vermont motor vehicle
arbitration board or the manufacturer's dispute settlement mechanism, the person who
requests the participation of the authorized franchise dealer or requests the production
of documents must make arrangements in advance to reasonably compensate the dealer for the
actual expense involved. Where a conflict arises as to actual expenses, the board shall
make that determination. In the event the consumer prevails, these costs shall be
reimbursed to the consumer by the manufacturer.
4176 Appeal From Board.
(a) The decision of the board shall be final and shall not be modified or
vacated unless, on appeal to the superior court a party to the arbitration proceeding
proves, by clear and convincing evidence, that:
(1) the award was procured by corruption, fraud or other undue means;
(2) there was evident partiality by the board or corruption or misconduct
prejudicing the rights of any party by the board;
(3) the board exceeded its powers;
(4) the board refused to postpone a hearing after being shown sufficient
cause to do so or refused to hear evidence material to the controversy or otherwise
conducted the hearing contrary to the rules promulgated by the board so as to
prejudice substantially the rights of a party.
An application to vacate or modify an award shall be made within 30 days after
delivery of a copy of the award to the applicant except that if predicated upon
corruption, fraud or other undue means, it may be made within 30 days after such grounds
are known or should have been known. In the event an award is confirmed, the party who
prevails shall be awarded the attorney's fees incurred in obtaining confirmation of the
award together with all costs.
(b) When a judgment of the superior court affirms an award of the board,
permission of the presiding judge shall be required for review. Review may be
conditioned upon the appellant paying appellee's appellate attorney's fees (sic),
giving security for costs, expenses and financial loss resulting from the passage of
time for review.
4177 Unfair And Deceptive Acts And Practices.
Failure of the manufacturer, its agents, authorized dealers, or motor vehicle lessor's
to comply with a decision of the board shall constitute an unfair or deceptive act or
practice under 9 V.S.A. chapter 63.
Nothing in this chapter shall be construed as imposing any liability on a
manufacturer's authorized dealers or creating a cause of action by a manufacturer against
its authorized agents or dealers. It shall be a violation of 9 V.S.A. chapter 108 for a
manufacturer to engage in reprisals or threats of reprisals, directly or indirectly,
against any authorized dealer arising out of the dealer's efforts to repair a motor
vehicle under the provisions of this chapter.
4179 Effective Date; Limitations.
(a) This chapter shall apply to motor vehicles beginning with the model year
following July 1, 1984. Any proceedings initiated under this chapter shall be commenced
within one year following:
(1) the expiration of the express warranty term; or
(2) one year following the manufacturer's last attempt at repair of the
nonconformity which gives rise to the consumer's request that the vehicle be replaced
or the money refunded, whichever comes later.
(b) Nothing in this chapter shall in any way limit the rights or remedies
which are otherwise available to a consumer under any other law.
4180 Notification To Consumers.
The manufacturer of every motor vehicle sold in this state beginning with the model
year following July 1, 1984 shall provide a clear and conspicuous written notice of the
consumer's rights under this chapter and at the time of the delivery of every new motor
vehicle in this state beginning with the model year following July 1, 1984 shall provide
the consumer with a stamped self-addressed notice in a form satisfactory to the Vermont
motor vehicle arbitration board sufficient to notify the manufacturer of the consumer's
election to proceed under this chapter. The manufacturer shall not delegate this
responsibility to its authorized dealers. The manufacturer of every new motor vehicle sold
in this state beginning with the effective date of this chapter shall also provide a clear
and conspicuous notice that informs consumers of their rights under this chapter.
4181 Sale Of Defective Motor Vehicles.
Any manufacturer, its agent or authorized dealer who attempts to resell a motor vehicle
after final determination, adjudication or settlement, pursuant to the provisions of this
chapter or after final determination, adjudication or settlement under similar laws of any
other state shall apprise prospective buyers in Vermont by means of a clearly visible
window sticker and such manufacturers are prohibited from reselling in Vermont any vehicle
determined or adjudicated as having a serious safety defect. Notice that a vehicle has
been returned pursuant to such law shall also be conspicuously printed on the motor
vehicle certificate of title.
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