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257.1401
Definitions.
Sec. 1. As used in this act: (a) "Consumer" means 1
or more of the following: (i) A person who purchases or leases
a new motor vehicle for personal, family, or household use and
not for the purpose of selling or leasing the new motor vehicle
to another person.
(ii) A person who purchases or leases less than 10 new motor vehicles
a year.
(iii) A person who purchases or leases 10 or more new motor vehicles
a year only if the vehicles are purchased or leased for personal,
family, or household use.
(iv) Any other person entitled to enforce the provisions of an
express warranty pursuant to the terms of that warranty.
(b) "Lessee" means a person who, under a lease, acquires
the right to possession and use of a new motor vehicle.
(c) "Lessor" means a person who, under a lease, transfers
the right to possession and use of a new motor vehicle.
(d) "Manufacturer" means a person who manufactures,
assembles, or is a distributor of new motor vehicles and includes
an agent of a manufacturer but does not include a new motor vehicle
dealer.
(e) "Manufacturer's express warranty" means an express
warranty as determined under the uniform commercial code, 1962
PA 174, MCL 440.1101 to 440.11102, offered by the manufacturer
on a new motor vehicle.
(f) "Motor vehicle" means a motor vehicle as defined
in section 33 of the Michigan vehicle code, 1949 PA 300, MCL 257.33,
that is designed as a passenger vehicle, or sport utility vehicle,
but does not include a motor home, bus, truck other than a pickup
truck or van, or a vehicle designed to travel on less than 4 wheels.
(g) "New motor vehicle" means a motor vehicle that is
purchased or leased in this state or purchased or leased by a
resident of this state and is covered by a manufacturer's express
warranty at the time of purchase or lease.
(h) "New motor vehicle dealer" means a person or that
person's agent who holds a dealer agreement for the sale of new
motor vehicles, who is engaged in the business of purchasing,
leasing, selling, exchanging, or dealing in new motor vehicles,
and who has an established place of business in this state.
(i) "Person" means a natural person, a sole proprietorship,
partnership, corporation, association, unit or agency of government,
trust, estate, or other legal entity.
(j) "Resident of this state" means as follows: (i) For
an individual, an individual who is a legal resident of this state.
(ii) For a sole proprietorship or partnership, a sole proprietorship
or partnership created pursuant to the laws of this state and
its main office is located in this state.
(iii) For a corporation, a corporation that is a domestic corporation
and was created under the laws of this state.
(iv) For an association, an association created pursuant to the
laws of this state and its main office is located in this state.
(v) For a unit or agency of government, a unit or agency of government
located in this state.
(vi) For a trust, estate, or other legal entity, a trust, estate,
or other legal entity created pursuant to the laws of this state
and that is located in this state.
(k) "Lease price" means the actual vehicle sales price
paid by the lessor including any cash payment by the consumer
and the sum equal to any allowance for any trade-in but excludes
debt from any other transaction as well as any manufacturer to
consumer discount, rebate, or incentive appearing in the agreement
or contract that the consumer received or that was applied to
reduce the purchase or lease cost. Additionally, any sales tax,
license and registration fees, and similar government charges
not included elsewhere paid by the lessor on behalf of the lessee
are included as a part of lease price.
(l) "Purchase price" means the actual vehicle sales
price listed on the buyer's order including any cash payment by
the consumer and the sum equal to any allowance for any trade-in
but excludes debt from any other transaction as well as any manufacturer
to consumer discount, rebate, or incentive appearing in the agreement
or contract that the consumer received or that was applied to
reduce the purchase cost. Additionally, any sales tax, license
and registration fees, and similar government charges not included
elsewhere paid by the consumer are included as a part of purchase
price.
257.1402
Repair of defect or condition; report.
Sec. 2. If a new motor vehicle has any defect or condition that
impairs the use or value of the new motor vehicle to the consumer
or which prevents the new motor vehicle from conforming to the
manufacturer's express warranty, the manufacturer or a new motor
vehicle dealer of that type of motor vehicle shall repair the
defect or condition as required under section 3 if the consumer
initially reported the defect or condition to the manufacturer
or the new motor vehicle dealer within 1 of the following time
periods, whichever is earlier: (a) During the term the manufacturer's
express warranty is in effect.
(b) Not later than 1 year from the date of delivery of the new
motor vehicle to the original consumer.
257.1403
Continued existence of defect or condition; replacement of motor
vehicle or refund; allowance for use; reimbursement for towing
costs and costs for rental vehicle; determination of ordinary
and personal use; consent to replacement of security interest;
presumption; performing repairs after expiration of warranty;
extension of time for repair services.
Sec. 3. (1) If a defect or condition that was reported to the
manufacturer or new motor vehicle dealer pursuant to section 2
continues to exist and the new motor vehicle has been subjected
to a reasonable number of repairs as determined under subsection
(5), the manufacturer shall within 30 days, do either of the following
as applicable:
(a)
If the new motor vehicle was purchased, either replace the new
motor vehicle with a comparable replacement motor vehicle currently
in production and acceptable to the consumer or accept return
of the vehicle and refund to the consumer the purchase price.
A consumer shall have the right to demand a refund.
(b) If the new motor vehicle was leased, the consumer has the
right to a refund of the lease price paid by the consumer. The
consumer may agree to accept a comparable replacement vehicle
in lieu of a refund for the lease price paid. If the consumer
agrees to accept a replacement vehicle, the lease agreement shall
not be altered except with respect to the identification of the
vehicle.
(2) The purchase price or lease price includes the cost of any
options or other modifications installed or made by or for the
manufacturer, and the amount of all other charges made by or for
the manufacturer, less a reasonable allowance for the consumer's
use of the vehicle, and less an amount equal to any appraised
damage that is not attributable to normal use or to the defect
or condition. A reasonable allowance for use is the purchase or
lease price of the new motor vehicle multiplied by a fraction
having as the denominator 100,000 miles and having as the numerator
the miles directly attributable to use by the consumer and any
previous consumer prior to his or her first report of a defect
or condition that impairs the use or value of the new motor vehicle
plus all mileage directly attributable to use by a consumer beyond
25,000 miles. If a vehicle is replaced or refunded under the provisions
of this section, if towing services and rental vehicles were not
made available without cost to the consumer, the manufacturer
shall also reimburse the consumer for those towing costs and reasonable
costs for a comparable rental vehicle that were incurred as a
direct result of the defect or condition.
(3) If a court or an alternative dispute settlement procedure
described in section 5 determines that a consumer has provided
sufficient evidence that the vehicle did not provide reliable
transportation for ordinary personal or household use for any
period beyond the first 25,000 mileage usage period of the vehicle,
the court or the alternative dispute settlement procedure may
reduce the vehicle usage deduction for mileage beyond the first
25,000 mileage usage period only for the period beyond the 25,000
mileage usage period that the court or alternative dispute settlement
procedure determines that the vehicle did not provide useful transportation
for ordinary personal or household use. To determine if the vehicle
did or did not provide useful transportation for ordinary personal
and household use, the court or the alternative dispute settlement
procedure shall consider all of the following:
(a) The number of repairs.
(b) The cost of the repairs.
(c) The number of days the vehicle was out of service.
(d) Whether the vehicle's need for repair significantly affected
the consumer's ability to use the vehicle for personal or household
functions.
(4) The provisions of this act do not affect the obligations of
a consumer under a loan, sales, or lease contract or the secured
interest of a secured party. The secured party shall consent to
the replacement of the security interest with a corresponding
security interest on a replacement motor vehicle that is accepted
by the consumer in exchange for the motor vehicle having a defect
or condition pursuant to subsection (1), if the replacement motor
vehicle is comparable in value to the original motor vehicle.
If for any reason the security interest in the new motor vehicle
having a defect or condition pursuant to subsection (1) is not
able to be replaced with a corresponding security interest on
a new motor vehicle accepted by the consumer, the consumer shall
accept a refund. A refund required under this subsection or subsection
(1) shall be made to the consumer and the secured party, if any,
as their interests exist at the time the refund is to be made.
The lessor, if any, shall be notified if a refund is made to a
lessee under this act. A lessor shall not assess a fee for early
termination of a lease under this act.
(5) It shall be presumed that a reasonable number of attempts
have been undertaken to repair a defect or condition if 1 of the
following occurs:
(a) The same defect or condition that substantially impairs the
use or value of the new motor vehicle to the consumer has been
subject to repair a total of 4 or more times by the manufacturer
or new motor vehicle dealer within 2 years of the date of the
first attempt to repair the defect or condition, and the defect
or condition continues to exist. Any repair performed on the same
defect made pursuant to subsection (6) shall be included in calculating
the number of repairs under this section. The consumer or his
or her representative, before availing himself or herself of a
remedy provided under subsection (1), and any time after the third
attempt to repair the same defect or condition, shall give written
notification, by return receipt service, to the manufacturer of
the need for repair of the defect or condition in order to allow
the manufacturer an opportunity to cure the defect or condition.
The manufacturer shall notify the consumer as soon as reasonably
possible of a reasonably accessible repair facility. After delivery
of the vehicle to the designated repair facility, the manufacturer
has 5 business days to repair the defect or condition.
(b) The new motor vehicle is out of service because of repairs
for a total of 30 or more days or parts of days during the term
of the manufacturer's express warranty, or within 1 year from
the date of delivery to the original consumer, whichever is earlier.
The consumer, or his or her representative, before availing himself
or herself of a remedy provided under subsection (1), and after
the vehicle has been out of service for at least 25 days in a
repair facility, shall give written notification by return receipt
service to the manufacturer of the need for repair of the defect
or condition in order to allow the manufacturer an opportunity
to cure the defect or condition. The manufacturer shall notify
the consumer as soon as reasonably possible of a reasonably accessible
repair facility. After delivery of the vehicle to the designated
repair facility, the manufacturer has 5 business days to repair
the defect or condition.
(6) Any repairs required to be made under this act shall be made
even if the repairs need to be performed after the expiration
of the manufacturer's express warranty. The defect needing repair
must be a continuation of the original attempt to repair the defect.
(7) The term of an express warranty, and the 1-year, 30-day, and
5-day periods of time provided for in this section shall be extended
because repair services were not available to the consumer because
of war, invasion, strike, fire, flood, or other natural disaster.
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