legislature finds and declares that manufacturers, distributors
and importers of new motor vehicles should be obligated to
provide speedy and less costly resolution of automobile warranty
problems. Manufacturers should be required to provide in as
expeditious a manner as possible a refund of the consumer's
purchase price or payments to a lessor and lessee or a
replacement vehicle that is acceptable to the consumer whenever
the manufacturer is unable to make the vehicle conform with its
applicable warranty. New motor vehicle dealers and used motor
vehicle dealers cannot be sued under this chapter.
used in this chapter:
"Board" means, unless otherwise indicated, the Vermont
motor vehicle arbitration board.
"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
"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
"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.
"Lessee" means any consumer who leases a motor vehicle
pursuant to a written lease agreement for a term of two or more
"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
"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:
"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
"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.
"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.
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 vehicle lessor.
Warranty shall be defined as including the following:
warranty" means express warranties as defined in the
Uniform Commercial Code2-313, plus any written warranty of the
Enforcement Of Warranties.
Every new motor vehicle as defined in section 4171 of this title
sold in this state must conform to all applicable warranties.
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.
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.
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.
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.
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.
It shall be presumed that a reasonable number of attempts have
been undertaken to conform a motor vehicle to the applicable
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
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.
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 dealer.
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:
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.
The manufacturer shall provide to the motor vehicle lessor the
aggregate of the following:
the lessor's actual purchase cost, less payments made by the
the freight cost, if applicable;
the cost for dealer or manufacturer-installed accessories, if
any fee paid to another to obtain the lease;
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.
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 vehicles.
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.
The motor vehicle lessor shall release the motor vehicle title
to the manufacturer upon payment by the manufacturer under the
provisions of this subsection.
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 vehicle lessor.
Procedure To Obtain Refund Or Replacement.
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.
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
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 chapter.
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.
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 final adjudication.
Vermont Motor Vehicle Arbitration Board.
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 transportation board.
The board shall promulgate rules under the provisions of 3 V.S.A.
chapter 25 to implement the provisions of this chapter.
The board may issue subpoenas to compel the attendance of
witnesses to testify under oath and to produce documents.
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.
Fees And Costs.
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.
Appeal From Board.
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:
the award was procured by corruption, fraud or other undue
there was evident partiality by the board or corruption or
misconduct prejudicing the rights of any party by the board;
the board exceeded its powers;
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.
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.
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.
Unfair And Deceptive Acts And Practices.
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.
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.
Effective Date; Limitations.
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:
the expiration of the express warranty term; or
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
Nothing in this chapter shall in any way limit the rights or
remedies which are otherwise available to a consumer under any
Notification To Consumers.
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.
Sale Of Defective Motor Vehicles.
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.