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June 6, 2007

Roxas: Lemon law should better protect car buyers
Buyers of defective brand new vehicles may soon be able to have their car
serviced up to four times with the dealers or manufacturers shouldering
half the cost, or they may opt to demand a refund or replacement of their

A bicameral conference committee approved a consolidated version of the
“Lemon Law Act of 2007” on Tuesday. The measure is for Senate ratification
to be fully passed into law.

Senator Mar Roxas, principal author of the Senate version of the Lemon
Law, said the bill aims to strengthen consumer protection in the purchase
of brand new motor vehicles.

“This is an important measure for the consumers, especially middle class
families who save anywhere from half to a million pesos for a vehicle.
Next to buying a house, a motor vehicle is considered a major investment.
It is simply injustice on the part of consumers when they unknowingly
purchase a vehicle fraught with factory defects or faulty safety
mechanisms,” Roxas said.

“The Lemon Law gives life to the policy of the State providing full
protection to consumer rights against deceptive and unfair sales
practices,” he added.

Roxas was quick to clarify that although the law protects auto buyers from
being shortchanged with faulty motor vehicles and fraudulent warranties,
this should not be seen as a substitute for ordinary warranties.

“Firstly, it only covers brand new four-wheeled vehicles. Secondly, it
only concerns rare, unusual or exceptional cases where the vehicle suffers
from a factory defect that may be life threatening.”

The Senate Trade Committee Chair said that based on statistics of the
Department of Trade and Industry, this law is expected to affect only
about half of one percent of all vehicles sold in the country. The law
provides up to four attempts of vehicle repair with the owner and the
dealer or manufacturer each sharing half of the expenses.

On the first two instances, the owner can ask the dealer to repair the
vehicle. On the third and fourth, it will be the manufacturer shouldering
the repair. If the buyer is still not satisfied, the dispute will be
resolved by arbitration through an “arbitration council” and then later in
the court.

The possible recourse for a customer, in case of adverse decisions, is
either to return the vehicle or claim a refund of the purchase price, less
a depreciation cost of 20 percent. “Refund can only be made if there’s
just cause. It is the last resort under this law. The point here is that
affected customers now have ample legal recourse,” Roxas said.

The Liberal Party stalwart added that the law provides for a
point-to-point “first class taxi fare allowance” for vehicle owners whose
cars are under repair. This is to compensate them for the inconvenience
caused by their car’s temporary non-use. PNA


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