My brand-new car keeps coming back to the casa for the same defect. Can I demand a replacement or refund under the Lemon Law?

Why

The Philippine Lemon Law (Republic Act No. 10642) covers brand-new motor vehicles bought in the Philippines from an authorized distributor, dealer or retailer. Under Section 3(j), 'motor vehicle' means a self-propelled, four-wheeled road vehicle designed to carry passengers, such as sedans, SUVs, AUVs, vans and pick-ups. Motorcycles, delivery trucks, buses and heavy equipment are excluded. The problem must be a 'nonconformity' (Section 3(k)): a defect or condition that substantially impairs the car's use, value or safety, that keeps it from meeting the manufacturer's standards, and that cannot be repaired.

Timing is everything. The Lemon Law rights period ends 12 months after the original delivery of the vehicle or after its first 20,000 kilometres of operation, whichever comes first (Sections 3(h) and 4). Section 4 excludes problems caused by your own failure to comply with the warranty, modifications not authorized by the manufacturer or dealer, abuse or neglect, and damage from accidents or force majeure. That is why keeping to the casa's maintenance schedule matters.

The steps are set by law. First, the same manufacturer, distributor, authorized dealer or retailer must have made at least four separate repair attempts for the same complaint, with the problem still unresolved (Section 5). Second, you must notify them in writing of the unresolved complaint and of your intention to invoke your Lemon Law rights within the rights period; the warranty booklet must state the manner and form of this notice (Section 6). Third, you bring the car back for a final repair attempt (Section 7). While the car is being repaired during this stage, you are entitled to a reasonable daily transportation allowance equivalent to air-conditioned taxi fare between home and work, or a service vehicle at the dealer's option. If you do not bring the car back for the same complaint within 30 calendar days after it is released to you, the repair is deemed successful.

If the final attempt fails, you may file a complaint with the DTI, which has exclusive and original jurisdiction over Lemon Law disputes (Section 8). The DTI first mediates, and mediation must be settled within ten working days from filing. If that fails, the parties may agree to arbitration; otherwise either party may start adjudication, which may not exceed twenty working days. Independent testing establishes whether the car conforms, and its cost is borne jointly by you and the dealer. If a nonconformity is found, the DTI orders either a replacement with a comparable vehicle, or the return of the car with payment of the purchase price plus collateral charges such as LTO registration, insurance and chattel mortgage fees. If no nonconformity is found, you must reimburse the dealer's costs of validating your complaint, so do not file lightly.

In both replacement and refund, a 'reasonable allowance for use' is deducted: under Section 9, this is 20% per annum of the purchase price, or the kilometres driven multiplied by the purchase price divided by 100,000 km, whichever is lower. A party may appeal the DTI adjudication officer's decision to the DTI Secretary within 15 days, and then go to the Court of Appeals by certiorari. The Lemon Law does not replace your other rights: Section 7 says nothing in it limits your remedies under other laws, including the warranty provisions of the Consumer Act.