New Mexico Lemon Law: Complete Guide for 2026

New Mexico Lemon Law consumer protection guide

Last verified: February 2026

Key Points

Primary Law: Motor Vehicle Quality Assurance Act (NMSA 1978, §§ 57-16A-1 to 57-16A-9)
Coverage: New motor vehicles within manufacturer’s express warranty term
Presumption: 4+ repair attempts for same defect OR 30+ business days out of service
Remedies: Replacement vehicle or full refund at consumer’s option
Arbitration: Certified third-party dispute resolution or manufacturer program
Attorney Fees: Prevailing consumers may recover reasonable attorney fees

Quick Penalties Overview

Violation Type	Consumer Remedy	Additional Damages
Failure to repair after reasonable attempts	Refund or replacement	Attorney fees to prevailing consumer
Manufacturer fails to comply with arbitration	Court enforcement	Additional civil penalties
Failure to disclose lemon buyback status	Rescission of sale	Title branding required; Unfair Practices Act claims

📑 Table of Contents (click to expand)

New Mexico’s Lemon Law Overview
What Vehicles Are Covered
New Mexico’s Lemon Law Presumption
Notice Requirements
Consumer Remedies: Refund vs. Replacement
Dispute Resolution Procedures
Manufacturer Defenses
Title Branding and Disclosure
Electric Vehicle Considerations
Statute of Limitations
Frequently Asked Questions
Resources and Legal Help

New Mexico’s Lemon Law Overview

New Mexico’s lemon law, officially known as the Motor Vehicle Quality Assurance Act, is codified in NMSA 1978, Sections 57-16A-1 through 57-16A-9. This law provides important consumer protections for purchasers and lessees of new motor vehicles that cannot be repaired after a reasonable number of attempts during the warranty period.

The Motor Vehicle Quality Assurance Act was enacted to ensure that New Mexico consumers receive vehicles that conform to the manufacturer’s express warranties. When a manufacturer or its authorized dealers are unable to repair a vehicle after reasonable attempts, the law requires the manufacturer to either replace the vehicle or refund the purchase price, at the consumer’s option.

New Mexico’s lemon law follows the standard model used by many states, with a 4 repair attempts or 30 business days out of service threshold to trigger the lemon law presumption. The law ties the coverage period to the manufacturer’s express warranty term, which means protection continues as long as the vehicle is under warranty.

The law includes provisions for informal dispute resolution, allowing consumers to seek relief through certified arbitration programs before resorting to litigation. This provides a faster, less expensive path to resolution for many consumers.

What Vehicles Are Covered

New Mexico’s Motor Vehicle Quality Assurance Act covers new motor vehicles purchased or leased in the state that come with a manufacturer’s express warranty. The definition of covered vehicles is relatively broad.

Covered Vehicle Types

Passenger cars: Sedans, coupes, hatchbacks, convertibles, and similar vehicles
Trucks: Light-duty trucks and pickup trucks for personal use
SUVs and crossovers: Sport utility vehicles and crossover vehicles
Vans and minivans: Including passenger and cargo configurations
Motorcycles: Street-legal motorcycles with manufacturer warranties (if covered under the Act)
Leased vehicles: Vehicles leased for personal, family, or household purposes

Vehicles Not Covered

Vehicles purchased primarily for business, commercial, or agricultural purposes
Vehicles with a gross vehicle weight rating exceeding certain thresholds
Motor homes (the living quarters portion; chassis may have separate coverage)
Off-road vehicles not designed for highway use
Used vehicles (unless still within original manufacturer warranty)
Vehicles sold without a manufacturer’s express warranty

Consumer Definition

Under New Mexico’s lemon law, a “consumer” means a buyer or lessee of a motor vehicle for purposes other than resale, and any person to whom the vehicle is transferred during the warranty period who is entitled to enforce the warranty. This includes subsequent owners who acquire the vehicle while it is still under warranty.

New Mexico’s Lemon Law Presumption

New Mexico law creates a presumption that a manufacturer has had a reasonable number of attempts to repair a vehicle if certain conditions are met during the express warranty term.

The Lemon Law Presumption Applies When:

Condition	Requirement	Details
Repair Attempts (Same Problem)	4 or more attempts	Same nonconformity that substantially impairs use, market value, or safety
Days Out of Service	30 or more business days	Cumulative total during warranty term for repair of any nonconformities
Timeframe	During express warranty term	Problems must be reported during the manufacturer’s warranty period

Business Days: New Mexico uses business days rather than calendar days, which is generally more favorable to consumers. Weekends and holidays when the dealer is closed do not count toward the 30-day threshold.

What Qualifies as a Substantial Nonconformity?

The defect or condition must “substantially impair” the use, market value, or safety of the motor vehicle. Examples of qualifying nonconformities include:

Engine problems causing stalling, loss of power, or failure to start
Transmission defects affecting shifting or drivability
Brake system malfunctions or failures
Steering problems creating safety hazards
Electrical system failures affecting critical vehicle functions
Air conditioning or heating system failures
Persistent water leaks causing interior damage
Safety system malfunctions (airbags, ABS, electronic stability control)
Excessive oil consumption requiring frequent attention
Persistent warning lights indicating serious mechanical issues

Minor cosmetic defects, rattles, or problems that do not affect safety, drivability, or significant value typically do not qualify.

Extension of Time Periods

The warranty term and the 30-day out-of-service period may be extended by any time during which repair services were not available to the consumer due to conditions beyond the consumer’s control, such as natural disasters, strikes, or war.

Notice Requirements

New Mexico’s lemon law includes specific notice requirements that consumers should follow to preserve their rights.

Reporting the Defect

Consumers must report nonconformities to the manufacturer, its agent, or its authorized dealer during the warranty term. The manufacturer then has the opportunity to make necessary repairs.

Written Notice Before Refund or Replacement

Before being entitled to a refund or replacement, consumers may be required to provide written notice to the manufacturer. This notice should include:

Consumer’s name and contact information
Vehicle information (year, make, model, VIN)
Description of the nonconformity
Summary of repair attempts
Request for refund or replacement

Manufacturer Disclosure Obligations

If the manufacturer requires written notice as a condition of obtaining a refund or replacement, the manufacturer must clearly and conspicuously disclose this requirement to the consumer. The disclosure must include the name and address where the consumer should send the notice.

Consumer Remedies: Refund vs. Replacement

When a vehicle qualifies as a lemon under New Mexico law, the consumer has the right to choose between two remedies.

Option 1: Replacement Vehicle

The manufacturer must replace the motor vehicle with a comparable new motor vehicle acceptable to the consumer. The replacement should be of the same make and model with similar equipment, options, and accessories.

Option 2: Vehicle Buyback (Refund)

The manufacturer must accept return of the vehicle and refund to the consumer:

Full purchase price: The total contract price paid for the vehicle
Collateral charges: Including sales tax, license fees, registration fees, and similar government charges
Finance charges: If applicable, interest and fees paid on vehicle financing
Incidental damages: Reasonable costs incurred because of the nonconformity, such as towing, rental car, and related expenses

Usage Deduction: The manufacturer may deduct a reasonable allowance for the consumer’s use of the vehicle prior to the first report of the nonconformity. This allowance is typically calculated using a mileage-based formula:

Usage Deduction = (Purchase Price × Miles Before First Repair) / 120,000

Consumer’s Election

Under New Mexico’s law, the choice between refund and replacement belongs to the consumer, not the manufacturer. This is an important protection that ensures consumers receive the remedy they prefer.

Refund Distribution

Refunds must be made to the consumer and any lienholder as their interests appear. If there is an outstanding loan on the vehicle, the manufacturer typically pays the loan balance to the lender and refunds any excess to the consumer.

Dispute Resolution Procedures

New Mexico’s lemon law provides for informal dispute resolution procedures to help consumers resolve claims without litigation.

Manufacturer’s Dispute Settlement Program

If the manufacturer has established an informal dispute settlement procedure that complies with Federal Trade Commission regulations (16 CFR Part 703), consumers may be required to use that procedure before pursuing refund or replacement remedies under the lemon law.

Requirements for Valid Programs

For a manufacturer’s program to be valid, it must:

Comply with all FTC requirements under 16 CFR Part 703
Be reasonably accessible to consumers
Provide decisions within the timeframes specified in the regulations
Not require the consumer to waive any statutory rights

Certified Arbitration

New Mexico may certify third-party arbitration programs that meet certain standards. Consumers can use these programs to resolve disputes more quickly and at lower cost than litigation.

Court Action

If no qualifying dispute settlement program exists, or if the consumer is unsatisfied with the outcome of such a program, the consumer may pursue remedies in court. Consumers who prevail in lemon law litigation may be entitled to recover reasonable attorney fees and costs.

Manufacturer Defenses

Manufacturers may raise several affirmative defenses to avoid lemon law liability.

Valid Affirmative Defenses

Defense	Manufacturer’s Argument	Consumer’s Counter
Lack of substantial impairment	Defect does not substantially impair use, market value, or safety	Document how defect affects daily use, safety, or resale value
Consumer abuse or neglect	Nonconformity caused by consumer’s abuse, neglect, or misuse	Provide maintenance records showing proper care
Unauthorized modifications	Defect caused by unauthorized modifications or alterations	Show defect existed before modifications or is unrelated
Accident damage	Nonconformity resulted from collision or accident	Show defect predates accident or is unrelated

The burden of proving these affirmative defenses rests with the manufacturer. Consumers should maintain thorough documentation to counter any claims that they caused the defect.

Dealer Liability

Generally, New Mexico’s lemon law places primary responsibility on manufacturers rather than dealers. However, dealers are required to provide repair services and documentation, and may face liability under other laws (such as the Unfair Practices Act) for deceptive conduct.

Title Branding and Disclosure

New Mexico has requirements for disclosing vehicles that have been returned under lemon laws to protect subsequent purchasers.

Title Branding Requirements

When a vehicle is returned to a manufacturer under the lemon law:

The title must be branded to indicate lemon law buyback status
The New Mexico Motor Vehicle Division must be notified
The branded title follows the vehicle across state lines

Disclosure Obligations

Anyone reselling a vehicle that was previously returned under a lemon law must disclose this fact to potential buyers. The disclosure should be clear and conspicuous and include:

That the vehicle was returned under a lemon law
The nature of the defect that led to the return
Any repairs made before resale

Consequences of Non-Disclosure

Failure to disclose lemon law buyback status can result in:

Rescission of the sale
Claims under the New Mexico Unfair Practices Act
Fraud claims
Civil penalties

Electric Vehicle Considerations

Electric vehicles (EVs) are covered under New Mexico’s lemon law. As EV adoption grows in the state, understanding how the lemon law applies to these vehicles is increasingly important.

Common EV Defects That May Qualify

Battery degradation significantly beyond normal parameters
Charging system failures (onboard charger, charging port issues)
Range substantially below manufacturer specifications
Electric motor or drivetrain malfunctions
Thermal management system failures affecting battery performance
Software glitches affecting vehicle operation or safety
Regenerative braking system problems
Display or infotainment system failures affecting critical functions

EV-Specific Challenges

Software updates: Manufacturers may argue over-the-air updates resolved issues
Battery warranty: Separate battery warranties may complicate coverage analysis
Limited service options: Fewer dealers may be equipped to service EVs
Documentation: Software and electrical issues may require specialized diagnostic records
Range variability: Proving range defects can be challenging due to environmental factors

Statute of Limitations

Understanding the time limits for filing a New Mexico lemon law claim is essential for protecting your rights.

Key Time Periods

Coverage period: During the manufacturer’s express warranty term
Reporting defects: Nonconformities must be reported during the warranty period
Dispute resolution: Should be pursued promptly after the presumption is triggered
Court action: Subject to general statute of limitations for contract or warranty claims

Preserving Your Rights

Report all defects promptly and in writing during the warranty period
Keep detailed records of all repair attempts and dates
Document the number of days your vehicle was out of service
Follow any manufacturer notice requirements
Use manufacturer dispute settlement procedures if required
Consult with an attorney if your claim is not resolved informally

Frequently Asked Questions

How many repair attempts does New Mexico require?

New Mexico law presumes a vehicle is a lemon after four or more repair attempts for the same nonconformity, or after the vehicle has been out of service for 30 or more cumulative business days during the warranty term. The nonconformity must substantially impair the use, market value, or safety of the vehicle.

Does New Mexico use business days or calendar days?

New Mexico uses business days for calculating the out-of-service period. This means weekends and holidays when the dealer is closed do not count, which is generally more favorable to consumers than states using calendar days.

Can I choose between a refund and replacement in New Mexico?

Yes. Under New Mexico’s Motor Vehicle Quality Assurance Act, the choice between a refund and a comparable replacement vehicle belongs to the consumer. The manufacturer cannot force you to accept a replacement if you prefer a refund.

What is the usage deduction formula in New Mexico?

The manufacturer may deduct a reasonable allowance for your use of the vehicle before the first repair attempt. This is typically calculated by multiplying the purchase price by the miles driven before the first repair, then dividing by 120,000. For example, if you paid $36,000 and drove 6,000 miles before the first repair, the deduction would be $1,800.

Do I have to use the manufacturer’s arbitration program?

If the manufacturer has an informal dispute settlement procedure that complies with FTC regulations (16 CFR Part 703), you may be required to use it before pursuing lemon law remedies. However, if no qualifying program exists, or if you are unsatisfied with the outcome, you can proceed to court.

Can I recover attorney fees if I win my lemon law case?

Yes. Consumers who prevail in lemon law litigation in New Mexico may be entitled to recover reasonable attorney fees and costs. This makes it easier to find attorneys willing to take lemon law cases, as their fees will be paid by the manufacturer if successful.

What happens if I bought a used car that was a former lemon?

New Mexico requires that lemon law buyback vehicles have branded titles and that sellers disclose the vehicle’s lemon law history to buyers. If this disclosure was not made, you may have claims under the New Mexico Unfair Practices Act, fraud claims, and potentially the right to rescind the sale.