Iowa Lemon Laws: Used Car Regulations

Lemon laws in some states offer protection against manufacturer defects in both used and new vehicles, but Iowa is not one of them when it comes to used cars. The state only protects used cars if they are still under the original manufacturer express warranty. However, Iowa has consumer protection laws that cover used vehicles, which require the disclosure of major repairs to the buyers before they sign on the dotted line.

According to the Iowa Attorney General's Office, a vehicle must meet three basic requirements for Lemon Law coverage. If it does not meet all of these, a consumer cannot take action under Iowa Lemon Law. Some types of transportation, including mopeds, motorcycles and RVs, do not qualify at all. For a motor vehicle to be eligible, it must:

• Be less than two years old.
• Have under 24,000 miles of operation on the odometer.
• Weigh under 15,000 pounds.

The vehicle must have a defect or problem that makes it unsafe or unreliable for everyday use and significantly decreases its value. To be a "lemon," one or more of these factors must exist:

• The vehicle's problems persist after three or more visits to a mechanic or repair facility for the same issue.
• It has a defect that may cause serious bodily injury or death, and after one repair attempt by a mechanic the problem still exists.
• It has been out of service for 20 or more cumulative days (these do not have to be consecutive calendar days) for one or more problems, which persist.

While Iowa does not cover most used cars under its Lemon Law, consumers can find protection through its damage disclosure law. Sellers must disclose damages to a used vehicle if they exceed 50 percent of the car's fair market value before the damages occurred. They must base the amount on retail estimates for repairs and include labor, parts and other materials. Sellers have the option to base this estimate on the actual repair if it has already taken place. They must also include sales tax in their estimate.

There are exemptions to the state's damage disclosure law. There is no coverage for:

• Trucks and truck tractors with a gross vehicle weight rating (GVWR) of 16,000 pounds or greater.
• Vehicles over seven model years old.
• Motorcycles and motorized bicycles.
• Specialized mobile equipment.
• New cars with mileage of 1,000 miles or fewer, unless repairs for damages are over 50 percent of the vehicle's fair market value.

The Federal Trade Commission (FTC) has protections in place for used car buyers. Dealers selling at least five used cars per year must comply with its Used Car Rule, which applies to most states, including Iowa. According to the rule, dealers must prepare and display the FTC Buyers Guide, along with a compliance checklist, before offering a used vehicle for sale. This applies to cars sold on a used car lot through consignment or power of attorney as well as those sold through a public auction, but it does not apply to auctions closed to consumers.

The rule does not cover motorcycles, agricultural equipment and cars sold for parts or scrap in which the dealer relinquishes the title to obtain a salvage certificate. It considers a used car as a vehicle operated for reasons other than test driving or moving that may or may not have a title. It must also meet these requirements:

• A GVWR of fewer than 8,500 pounds.
• A curb weight of fewer than 6,000 pounds.
• A frontal area smaller than 46 square feet.

The FTC Buyers Guide must be prominent and in full view of the consumer when the car is for sale. Both sides of it must be visible. A dealer can place the guide hanging from a rear-view mirror, a side-view mirror, under a windshield wiper or attached to a side window.

The Buyers Guide discloses purchasing and warranty information for the consumer, including:

• The vehicle comes "as is" or has a warranty.
• Percentage of repair costs the dealer pays for if the car is under warranty.
• Difficulty of enforcing oral promises and the importance of getting everything in writing.
• Importance of keeping the Buyers Guide to refer to after the sale.
• Details of the car's mechanical and electrical systems and the significant issues that the buyer should be aware of.
• Importance of having the vehicle inspected before purchase by an independent mechanic.

When a vehicle does not meet the requirements for coverage under Iowa's Lemon Law, buyers with defective motor vehicles still have legal recourse against the vehicle manufacturer and can contact an Iowa lemon law attorney for legal advice to see what their options are. They can also report or ask about any safety issues they have with the vehicle by contacting the National Highway Traffic Safety Administration (NHTSA) or contacting the U.S. Department of Transportation's Vehicle Safety Hotline at 888-327-4236.

The Better Business Bureau (BBB) keeps past complaints against car dealers in its database. Buyers can contact the organization by inputting information through its Auto Line Complaint Form. They can also contact the Iowa attorney general's office to ask about past complaints by sending an email to [email protected], calling 515-281-5926 or writing the Office of the Attorney General of Iowa, Consumer Protection Division, Hoover State Office Building, 1305 E. Walnut Street, Des Moines, Iowa 50319-0106.

According to the Des Moines Register, consumers should do their own research before committing to buy a used car. The state attorney general suggests getting the car's VIN and looking up its history through VehicleHistory.gov, which offers information through the U.S. Department of Justice's National Motor Vehicle Title Information System. Carfax and AutoCheck sell reports on used vehicles.

After receiving a vehicle report, a potential buyer should check the car's odometer against the report and look for any damage that would signify an accident. If the vehicle has been moved between states, this can indicate an attempt to clear a bad report from its title. An experienced mechanic should check it out thoroughly, even if it's certified by the dealer.

Buyers should check that a car's price reflects its market value, which can be done by looking at comparable vehicles and data from Edmunds, Kelley Blue Book and the National Auto Dealers Association. If buying from an individual, consumers can also ask to see their driver's license to make sure it matches the name on the title. If it does not, this can be a sign of a stolen car. Iowa law does not entitle a buyer to a three-day right to cancel; however, some dealerships might. If they do, the consumer should make sure to get that promise in writing before making the purchase.