Do I have to make car payments for new car that has been in the shop?

Recently on our legal forum a car buyer asked, “If I have just purchased a new car and then the next week it broke down and I had to take it back to the dealership to have the car repaired- where it stayed for weeks- do I have to make my car payments?”

It’s great getting a new car- the new car smell, the leather seats, the stereo system- what’s not so great is driving off the car lot and having it break down a mile down the road. According to experts, however, there are an estimated 150,000 cars sold each year (or 1% of new cars) which can be classified as “lemons.”

We will talk about what this could mean for you and your new car purchase later. First, let’s review the issue of your car contract, and whether or not the fact your car broke down affects your rights under your car contract.

Car contract and my legal requirements to pay

If you want to purchase a new car but you do not have all of the money to pay up-front, you will have to find a lender who is willing to loan you the money to help finance the car. The loan can be issued prior to the car purchase or negotiated through the dealership.

Regardless of who provides the loan, however, this loan agreement and the requirements established under the new car finance contract are separate legal issues from whether or not the car actually runs or is a good deal.

The new car financial contract will outline the down payment for the vehicle, the interest rate charged on the loan, the amount financed, and the terms or length of the loan.

So, to answer this car buyer’s questions- no, you cannot simply decide to stop making loan payments for your car, even if it does not currently run. In fact, failure to meet the terms of the contract would be considered a breach of contract, allowing the lender to take a variety of actions against you to collect the debt.

Now, before you get too discouraged, just because you cannot stop loan payments does not mean that you do not have some rights under the laws of your state laws to ensure that the automobile you purchased is not in good working order. In the next section we will take a closer look at Lemon Laws and how they can protect you in the car buying process.

Lemon Laws and purchasing a new car

We mentioned that up to 150,000 cars are sold each year which can be categorized as “lemons.” The good news is states have passed laws to protect car buyers who may have purchased one of these cars. It’s important to note that while all states have protections for new car buyers, some states may not protect used car buyers (refer to your state’s Lemon Laws for specific information about protections offered in your state for new and used cars).

With that said, since you mentioned you bought a new car, we will discuss protections which should be offered by your state if any of the following has occurred:

• A new purchased or leased car develops a defect or condition that substantially impairs the motor vehicle’s use.
• A new purchased or leased car’s defect or condition substantially lowers the car’s market value or safety.

Now, before you go to the dealership and start making demands it’s imperative that you understand your state’s laws. For example, if one of the issues outlined above has occurred, all states will require that you give the manufacturer a reasonable opportunity to fix the car- which could be as many as three or four attempts to complete the repair.

What is considered “reasonable,” however, may vary by state, and it may also vary based on the issue. For example, if the defect causes a serious safety hazard which could be life-threatening, the manufacturer may only have one time to make the repair.

Hiring a Lemon Lawyer

If you have read your state’s Lemon Laws and talked to the dealer and you’re not making any progress you may want to talk to an attorney who understands the Uniform Commercial Code and Lemon Laws in your state. Assuming you are able to prove the car was a lemon, you will probably have the right to choose whether to get a replacement vehicle or whether you can get your money back.