Indiana Lemon Law: Your Complete Legal Guide

Overview of Indiana's Lemon Law

Indiana's Motor Vehicle Protection Act, codified at Indiana Code § 24-5-13, provides legal protection for consumers who purchase or lease new motor vehicles that turn out to have serious, unfixable defects. The law requires manufacturers to either refund or replace a qualifying vehicle after a reasonable number of repair attempts have failed.

The Indiana Attorney General's Consumer Protection Division oversees enforcement and certification of informal dispute settlement procedures under the statute. If you believe your vehicle qualifies as a lemon, you can contact the Attorney General's office at 1-800-382-5516 or file a complaint online.

What Vehicles Are Covered

Under Indiana Code § 24-5-13-5, the lemon law applies to specific types of motor vehicles. Understanding which vehicles qualify is the first step before pursuing a claim.

Covered Vehicle Types

• Passenger cars: Sedans, coupes, and hatchbacks sold or registered in Indiana
• Trucks: Pickup trucks and light trucks under 10,000 pounds GVWR
• SUVs and crossovers: Sport utility vehicles that fall under the weight limit
• Vans and minivans: Personal passenger vehicles
• Electric vehicles (EVs): Battery electric and plug-in hybrid vehicles under 10,000 pounds are covered the same as gas-powered vehicles
• Leased vehicles: Consumer leases exceeding four months
• Nonresident purchases: Vehicles sold to Indiana buyers who are nonresidents

Vehicles Not Covered

• Conversion vans: Vehicles modified by secondary manufacturers
• Motor homes: Recreational vehicles
• Farm tractors: Agricultural equipment
• Motorcycles and mopeds: Two-wheeled vehicles
• Snowmobiles: Winter recreational vehicles
• Off-road vehicles: Vehicles designed primarily for off-highway use
• Vehicles over 10,000 pounds: Heavy trucks and commercial vehicles

Who Qualifies as a Buyer

A "buyer" under Indiana law is any person who enters into an agreement or contract within Indiana for the transfer, lease, or purchase of a motor vehicle for purposes other than resale or sublease. The definition focuses on the transaction location and purpose rather than the buyer's state of residence.

This also includes subsequent purchasers. If you buy a used vehicle that is still within the original term of protection, you may qualify for lemon law rights as a "buyer" under the statute.

Indiana's Lemon Law Presumption

Under Indiana Code § 24-5-13-15, the law creates a rebuttable presumption that a reasonable number of repair attempts have been made when certain conditions are met within the "term of protection."

Term of Protection

The term of protection begins on the date of original delivery and ends at the earlier of:

• 18 months after delivery, or
• 18,000 miles after delivery

When the Lemon Law Presumption Applies

Condition	Requirement	Deadline
Repair attempts (same defect)	4 or more attempts for the same nonconformity	Within 18 months or 18,000 miles
Days out of service	30 or more business days for repair of any nonconformity	Within 18 months or 18,000 miles
Nonconformity type	Must substantially impair use, market value, or safety	Must be first reported within the term of protection

Both triggering conditions require that the nonconformity continues to exist after the repair attempts or out-of-service period.

What Qualifies as a Nonconformity

Under Indiana Code § 24-5-13-6, a "nonconformity" means any specific or generic defect or condition, or concurrent combination of defects or conditions, that:

• Substantially impairs the use, market value, or safety of the motor vehicle, or
• Renders the motor vehicle nonconforming to the terms of the manufacturer's warranty

The defect does not need to make the vehicle undrivable. A persistent problem that significantly reduces the vehicle's value or creates a safety concern can qualify.

Examples of Covered Defects

• Engine or transmission failures
• Brake system malfunctions
• Steering problems affecting vehicle control
• Electrical system failures
• Persistent warning lights indicating major issues
• Air conditioning or heating system failures
• Fuel system problems
• Safety equipment defects (airbags, seatbelts)
• EV battery or charging system malfunctions
• Software errors that affect drivability or safety

Consumer Remedies: Refund vs. Replacement

When a vehicle qualifies as a lemon under Indiana law, the buyer has the right to choose between a refund or a replacement. Under Indiana Code § 24-5-13-10, the manufacturer must provide the chosen remedy within 30 days.

Option 1: Vehicle Refund (Buyback)

Under Indiana Code § 24-5-13-11, if the buyer chooses a refund, the manufacturer must pay:

• Full contract price: Including all credits and allowances for trade-in vehicles
• Sales tax: All tax paid on the purchase
• Registration fees: Unexpended portion of prepaid registration and excise tax
• Finance charges: All finance charges actually expended
• Dealer-added options: Cost of options installed by the authorized dealer

Usage Deduction: The manufacturer may deduct a reasonable allowance for use, calculated as:

Usage Deduction = (Total Contract Price x Miles Before Return) / 100,000

For example, if your vehicle cost $40,000 and you drove 8,000 miles before returning it, the usage deduction would be $3,200.

Option 2: Replacement Vehicle

Under Indiana Code § 24-5-13-12, if the buyer chooses a replacement:

• The replacement must be a comparable vehicle
• The manufacturer must reimburse transfer of registration fees
• The manufacturer must reimburse any sales tax incurred
• If the original was financed by the manufacturer or its agent, refinancing terms cannot be less favorable

Additional Reimbursement

Under Indiana Code § 24-5-13-13, the manufacturer must also reimburse necessary towing costs and rental car expenses actually incurred as a direct result of the nonconformity.

Consumer's Option to Retain the Vehicle

Under Indiana Code § 24-5-13-14, the buyer has the option to keep using the returned vehicle until the manufacturer tenders a full refund or delivers a replacement. Any miles driven during this retention period will be reflected in the usage allowance calculation.

How to File a Lemon Law Claim in Indiana

Successfully pursuing a lemon law claim in Indiana requires careful documentation and strict compliance with procedural steps.

Step 1: Document Everything

• Keep all repair orders (dealers are required to provide them)
• Record the dates your vehicle was in the shop
• Document the symptoms you experienced each time
• Save all correspondence with the dealer and manufacturer
• Take photos or videos of the defects
• Maintain records of towing and rental car expenses

Good documentation is the foundation of a successful lemon law claim. Without repair orders and records of out-of-service dates, it becomes difficult to prove the statutory thresholds.

Step 2: Report the Nonconformity

Under Indiana Code § 24-5-13-8, you must report the nonconformity to the manufacturer, its agent, or an authorized dealer within the term of protection. Once reported during the term, the manufacturer must make necessary repairs even if the term of protection later expires.

Step 3: Notify the Manufacturer in Writing

Under Indiana Code § 24-5-13-9, you must notify the manufacturer of your claim in writing if:

• The manufacturer has clearly and conspicuously disclosed in the warranty or owner's manual that written notification is required
• The manufacturer has provided the name and address for sending the notification

If the manufacturer has not made the required disclosure in the warranty or owner's manual, you are not required to give written notice before proceeding.

Step 4: Use Informal Dispute Settlement (If Required)

Under Indiana Code § 24-5-13-19, if the manufacturer has established an informal dispute settlement procedure that is certified by the Indiana Attorney General, you may be required to use it before pursuing other remedies.

Programs like BBB AUTO LINE handle arbitration for several major manufacturers. The process typically involves submitting your case file and attending a hearing where an independent arbitrator reviews the evidence.

Step 5: Contact the Attorney General

If you need assistance or want to file a complaint, contact the Indiana Attorney General's Consumer Protection Division:

• Phone: 1-800-382-5516
• Online: File a complaint
• Fax: 317-233-4393

Step 6: File Legal Action if Necessary

Under Indiana Code § 24-5-13-21, you may bring a civil action for violations of the lemon law. Prevailing consumers may recover reasonable attorney fees and court costs in addition to the refund or replacement remedy.

Arbitration Requirements

Indiana law addresses informal dispute settlement procedures in detail under Indiana Code § 24-5-13-19.

Certification Requirements

The lemon law does not apply to any buyer who has not first used an informal procedure established by or participated in by a manufacturer if:

• The procedure is certified by the Indiana Attorney General
• The procedure complies with 16 CFR 703 (federal arbitration regulations)
• The procedure complies with any additional rules adopted by the Attorney General

If the manufacturer does not have a certified program, no arbitration is required before filing suit.

Consumer Rights in Arbitration

• Right to present evidence and testimony
• Right to have an attorney present
• Right to receive a written decision with findings
• Right to reject an unfavorable decision and proceed to litigation

An arbitration decision in your favor is binding on the manufacturer. If the decision is not in your favor, you can still file a lawsuit in court.

Manufacturer Defenses

Manufacturers may raise affirmative defenses under Indiana Code § 24-5-13-18.

Common Manufacturer Defenses

Defense	Manufacturer's Argument	Consumer's Counter
No substantial impairment	Defect does not substantially impair use, value, or safety	Document how the defect affects daily use and safety
Consumer abuse or neglect	Defect caused by owner abuse or neglect	Provide maintenance records showing proper care
Unauthorized modifications	Problem resulted from unauthorized modifications	Show defect existed before modifications or is unrelated
Unauthorized alterations	Vehicle was altered by someone other than the manufacturer or dealer	Demonstrate that alterations did not cause the nonconformity

Prohibited Conduct

Under Indiana Code § 24-5-13-16, a manufacturer, its agent, or authorized dealer may not refuse to diagnose or repair any vehicle for the purpose of avoiding liability under the lemon law. This anti-avoidance provision prevents dealers from turning away vehicles to keep repair attempt counts low.

Electric Vehicle Considerations

Electric vehicles (EVs) and plug-in hybrids that meet the weight and registration requirements are fully covered under Indiana's lemon law. The statute does not distinguish between powertrains, so battery electric, plug-in hybrid, and traditional gas-powered vehicles all receive the same protection.

EV-Specific Defects That May Qualify

• Battery pack degradation or failure within the term of protection
• Charging system malfunctions
• Software glitches that affect range, performance, or safety
• Thermal management system failures
• Regenerative braking problems
• Electric motor faults

Separate Battery Warranty

Most EV manufacturers provide a separate battery warranty (typically 8 years or 100,000 miles) in addition to the standard bumper-to-bumper warranty. Battery defects that occur within the lemon law's 18-month or 18,000-mile term of protection may qualify under both the lemon law and the battery warranty.

If a battery defect surfaces after the lemon law term expires but within the battery warranty period, the federal Magnuson-Moss Warranty Act may provide an alternative path to relief.

Buyback Vehicle Disclosure Rules

Indiana has a separate statute, Indiana Code § 24-5-13.5, that governs what happens when a lemon law buyback vehicle is resold. These rules protect the next buyer from unknowingly purchasing a vehicle with a documented defect history.

Title Branding Requirements

When a manufacturer repurchases or replaces a vehicle under the lemon law, it must stamp "Manufacturer Buyback - Disclosure on File" on the face of the original certificate of title. This branding remains on the title for the life of the vehicle.

Within 31 days of receiving the certificate of title, the manufacturer must apply to the Indiana Bureau of Motor Vehicles for a new title in the manufacturer's name and provide a copy of the disclosure document.

Resale Requirements

Before reselling a buyback vehicle in Indiana, the dealer must:

• Provide the buyer with a written statement disclosing the vehicle's buyback history
• Obtain the buyer's signed acknowledgment of the disclosure
• Provide an express warranty from the manufacturer for at least 12,000 miles or 12 months from the date of resale

Penalties for Nondisclosure

A manufacturer or dealer who fails to comply with these buyback disclosure requirements commits a deceptive act under Indiana's consumer protection statutes. The Attorney General may pursue enforcement, and affected consumers may seek remedies including damages.

Leased Vehicle Rights

Indiana's lemon law includes specific provisions for leased vehicles under Indiana Code § 24-5-13-11.5.

Leased Vehicle Refund

If a leased motor vehicle qualifies as a lemon, the refund is distributed between the lessee and lessor as follows:

Lessee Receives:

• All deposit and lease payments paid to the lessor
• Credits and allowances for any trade-in vehicles
• Less a reasonable allowance for use

Lessor Receives:

• Purchase cost including freight and accessories
• Fees paid to obtain the lease
• Insurance premiums or costs expended for the lessee's benefit
• Sales tax paid by the lessor
• 5% of the lessor's purchase cost
• Less total payments received from the lessee

Usage Deduction for Leases

The usage deduction for leased vehicles is calculated as:

Usage Deduction = (Total Lease Obligation x Miles Before Return) / 100,000

Used Vehicle Protections

Indiana's Motor Vehicle Protection Act is primarily designed for new vehicles. However, several protections exist for used vehicle buyers.

Remaining Manufacturer Warranty

The definition of "buyer" includes any person to whom a motor vehicle is transferred during the term of protection. If you purchase a used vehicle that is still within the original 18 months or 18,000 miles protection period, you may have lemon law rights as a subsequent owner.

Methamphetamine Vehicle Disclosure

Under Indiana Code §§ 24-5-13-16.1 and 24-5-13-16.2, Indiana law requires disclosure when selling any motor vehicle that was used to manufacture methamphetamine within the previous two years. Failure to disclose can result in:

• Decontamination at the seller's expense
• Reimbursement for the buyer's remediation costs
• Liquidated damages up to $10,000

Federal Magnuson-Moss Warranty Act

The federal Magnuson-Moss Warranty Act provides additional protections for used vehicle buyers who still have active warranty coverage. This federal law allows consumers to sue manufacturers for breach of warranty in state or federal court.

Statute of Limitations

Understanding the deadlines for filing a lemon law claim is critical under Indiana Code § 24-5-13-23.

Filing Deadlines

• Report the defect: The nonconformity must be reported to the manufacturer, agent, or dealer within 18 months or 18,000 miles of delivery (whichever comes first)
• Repair obligation continues: Once reported within the term, the manufacturer must continue to attempt repairs even if the term expires
• File a lawsuit: You must file a civil action within two years from the date you first reported the problem to the dealer

Missing either deadline can bar your claim, so act promptly.

Tolling Provisions

The 30-business-day out-of-service period is extended during extraordinary events, including:

• War or invasion
• Civil unrest
• Fire or natural disaster
• Terrorist attack

During these events, the manufacturer must provide or arrange for free use of a vehicle for the affected consumer.

Dealer Liability Protections

Under Indiana Code § 24-5-13-24, Indiana's lemon law does not impose liability on franchised dealers or create a cause of action against them. The law targets manufacturers, not the local dealership.

Additionally, manufacturers may not directly or indirectly shift lemon law liability onto their franchised dealers. This provision ensures that dealers cooperate with consumers during the repair process without fear of financial repercussions.

Tips for Strengthening Your Lemon Law Claim

Following these practical steps can improve your chances of a successful outcome:

1. Start a written log from day one. Record every symptom, every visit, and every conversation with the dealership service department.
2. Request copies of all repair orders. Indiana dealers are required to provide them. Do not leave without your paperwork.
3. Send written notice by certified mail. Even if not required, having proof of delivery strengthens your case.
4. Do not authorize unrelated repairs during lemon law service visits. Keep the focus on the nonconformity.
5. Check NHTSA for recalls and complaints. The NHTSA complaints database may show that other owners have reported the same problem with your vehicle.
6. Consult a lemon law attorney before accepting a settlement. Under Indiana Code § 24-5-13-22, prevailing consumers recover reasonable attorney fees, so many attorneys take these cases on contingency.

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