By Shin Chae-eun
BMWs catching fire on the road are the talk of the town right now. Thanks to this strange phenomenon, “Lemon Law” comes up as a related search term on the internet. What is a Lemon Law? It is not about selling or importing the yellow citrus fruit, but about defective motor vehicles.
In the United States, a defective car is called a “lemon.” To summarize the point of the Lemon Law, if you think you are buying a normal car, but later on it turns out to have a major defect, the law allows consumers to get a refund or a replacement.
The US Lemon Law, passed in 1975, is officially called “the Magnuson-Moss Warranty Act.” Something similar will go into force in Korea in January next year, very similar in its basic meaning and application to that of the United States. An amendment to some parts of the Enforcement Decree and Enforcement Rule of Mother Vehicle Management Act will be, in effect, Korea’s own Lemon Law. Let’s look at it below.
When does the Korea’s Lemon Law apply?
If a new car is purchased and there are two major defects, or three minor defects are found and repaired, the consumer can receive a refund within two years of purchase.
First, people who own more than one business vehicle are excluded a priori. At the time of purchase of the vehicle, the sale contract has to state the purchase price and the delivery date. These two pieces of information will specify the parameters for replacement or refund in the event of defects. According to the amended law, the amount of mileage the vehicle has driven is converted into a monetary figure, and this is subtracted from the total sales price paid at the time of signing the purchase agreement.
Second, to apply the Lemon Law, there must be two “major defects” or three “minor defects” that are found within one year of purchase. Repair of these defects must have been attempted, and the same problems must recur after those repairs. In this case, the consumer may request a refund or replacement vehicle within two years of delivery.
Third, there must be a process of arbitration. The format and methods for consumers to notify the manufacturer of a recurrence after repeated repairs (once for major defects or twice for minor ones) have been prepared. The Vehicle Safety and Defects Review Committee under the Ministry of Land, Infrastructure and Transport, which is comprised of experts in law, automobiles, and consumer protection, is will decide whether or not to exchange or refund vehicles. This committee’s decision has equal authority to a court’s final decision.
Can BMW owners get a refund based on the Lemon Law?
According to the Motor Vehicle Management Act, it is assumed that defects initially discovered within six months of the date of delivery of the automobile already existed prior to its purchase. So if the fire started six months or less after the car was bought, it might be possible to apply the Lemon Law. However, if the fire breaks out while driving a vehicle that is already six months or more old, it will be difficult to prove the cause. In the case of car fires, the temperature is very high, and the cause of the fire may have already been consumed, so it is difficult to pinpoint the origin. Also, since the Lemon Law is basically related to a vehicle’s “repair history,” it is difficult to apply it if a car that has been operating normally suddenly catches fire.
In the case of recent suspected unintended acceleration accidents, the consumer had to prove a defect in the car in order to be compensated. Not only is it difficult for consumers to prove a defect, but it is almost impossible to prove that this has happened when a car is burnt in a fire. Accidents where the cause is hard to find out, such as in recent cases involving the BMW 520 d, are likely to be the consumer’s responsibility again.
Therefore, perhaps the six-month period should be extended, or the burden of proof that the cause of the fires was not a pre-existing defect should be placed upon the manufacturer. Vehicle safety is a matter of direct relevance to lives of drivers and their passengers, so it is necessary to make sure that they are made well in the first place. In order to prevent accidents caused by car defects, we should also consider pushing for the introduction of punitive damages.
Shin Chae-eun is a junior associate at HMP Law and a member of the Tech & Comms team.