Indiana Lemon Law: Your Complete Legal Guide

What Vehicles Are Covered

Under Indiana Code § 24-5-13-5, the lemon law applies to specific types of motor vehicles. Understanding which vehicles qualify is essential before pursuing a claim.

Covered Vehicle Types

• Passenger cars: Sedans, coupes, hatchbacks sold or registered in Indiana
• Trucks: Pickup trucks and light trucks under 10,000 pounds GVWR
• SUVs and crossovers: Sport utility vehicles under weight limit
• Vans and minivans: Personal passenger vehicles
• Leased vehicles: Consumer leases exceeding four months
• Nonresident purchases: Vehicles sold to Indiana buyers who are nonresidents

Vehicles Not Covered

• Conversion vans: Vehicles modified by secondary manufacturers
• Motor homes: Recreational vehicles
• Farm tractors: Agricultural equipment
• Motorcycles and mopeds: Two-wheeled vehicles
• Snowmobiles: Winter recreational vehicles
• Off-road vehicles: Vehicles designed primarily for off-highway use
• Vehicles over 10,000 pounds: Heavy trucks and commercial vehicles

Consumer Definition

A "buyer" under Indiana law is any person who enters into an agreement or contract within Indiana for the transfer, lease, or purchase of a motor vehicle for purposes other than resale or sublease. The definition focuses on the transaction location and purpose rather than the buyer's residence.

Indiana's Lemon Law Presumption

Under Indiana Code § 24-5-13-15, the law creates a presumption that a reasonable number of repair attempts have been made if certain conditions are met within the "term of protection."

Term of Protection

The term of protection begins on the date of original delivery and ends at the earlier of:

• 18 months after delivery, or
• 18,000 miles after delivery

The Lemon Law Presumption Applies When:

Condition	Requirement	Time/Mileage Limit
Repair Attempts (Same Problem)	4 or more attempts	Within 18 months or 18,000 miles
Days Out of Service	30 or more business days	Within 18 months or 18,000 miles
Nonconformity Type	Substantially impairs use, value, or safety	Must be reported within term of protection

What Qualifies as a Nonconformity?

Under Indiana Code § 24-5-13-6, a "nonconformity" means any specific or generic defect or condition, or concurrent combination of defects or conditions, that:

• Substantially impairs the use, market value, or safety of the motor vehicle, or
• Renders the motor vehicle nonconforming to the terms of the manufacturer's warranty

Examples of Covered Defects

• Engine or transmission failures
• Brake system malfunctions
• Steering problems affecting control
• Electrical system failures
• Persistent warning lights indicating major issues
• Air conditioning or heating failures
• Fuel system problems
• Safety equipment defects (airbags, seatbelts)

Consumer Remedies: Refund vs. Replacement

When a vehicle qualifies as a lemon under Indiana law, the buyer has the right to choose between a refund or replacement. Under Indiana Code § 24-5-13-10, the manufacturer must provide the chosen remedy within 30 days.

Option 1: Vehicle Refund (Buyback)

Under Indiana Code § 24-5-13-11, if the buyer chooses a refund, the manufacturer must pay:

• Full contract price: Including all credits and allowances for trade-in vehicles
• Sales tax: All tax paid on the purchase
• Registration fees: Unexpended portion of prepaid registration and excise tax
• Finance charges: All finance charges actually expended
• Dealer-added options: Cost of options installed by the authorized dealer

Usage Deduction: The manufacturer may deduct a reasonable allowance for use, calculated as:

Usage Deduction = (Total Contract Price × Miles Before Return) ÷ 100,000

Option 2: Replacement Vehicle

Under Indiana Code § 24-5-13-12, if the buyer chooses a replacement:

• The replacement must be a comparable vehicle
• The manufacturer must reimburse transfer of registration fees
• The manufacturer must reimburse any sales tax incurred
• If the original was financed by the manufacturer or its agent, refinancing terms cannot be less favorable

Additional Reimbursement

Under Indiana Code § 24-5-13-13, the manufacturer must also reimburse necessary towing and rental costs actually incurred as a direct result of the nonconformity.

Consumer's Option to Retain Vehicle

Under Indiana Code § 24-5-13-14, the buyer has the option to retain use of the returned vehicle until the manufacturer tenders a full refund or replacement. Any use during this retention period will be reflected in the usage allowance.

How to File a Lemon Law Claim in Indiana

Successfully pursuing a lemon law claim in Indiana requires careful documentation and following proper procedures.

Step 1: Document Everything

• Keep all repair orders (required to be provided by dealer)
• Record dates your vehicle was in the shop
• Document symptoms you experienced
• Save all correspondence with dealer and manufacturer
• Take photos or videos of defects
• Maintain records of towing and rental expenses

Step 2: Report the Nonconformity

Under Indiana Code § 24-5-13-8, you must report the nonconformity to the manufacturer, its agent, or authorized dealer within the term of protection. Once reported, they must make necessary repairs even if the term of protection has expired.

Step 3: Notify the Manufacturer

Under Indiana Code § 24-5-13-9, you must notify the manufacturer of your claim if:

• The manufacturer has clearly and conspicuously disclosed in the warranty or owner's manual that written notification is required
• The manufacturer has provided the name and address for sending notification

If the manufacturer has not made the required disclosure, you are not required to notify the manufacturer before proceeding.

Step 4: Use Informal Dispute Settlement (If Required)

Under Indiana Code § 24-5-13-19, if the manufacturer has established an informal procedure certified by the Indiana Attorney General, you may be required to use it before proceeding with other remedies.

Step 5: File Legal Action if Necessary

Under Indiana Code § 24-5-13-21, you may bring a civil action for violations of the lemon law. Prevailing consumers may recover reasonable attorney fees and costs.

Arbitration Requirements

Indiana law addresses informal dispute settlement procedures in Indiana Code § 24-5-13-19.

Certification Requirements

The lemon law does not apply to any buyer who has not first resorted to an informal procedure established by or participated in by a manufacturer if:

• The procedure is certified by the Indiana Attorney General
• The procedure complies with 16 CFR 703 (federal arbitration regulations)
• The procedure complies with any additional rules adopted by the Attorney General

Consumer Rights in Arbitration

• Right to present evidence
• Right to have an attorney present
• Right to receive written decision
• Right to reject unfavorable decision and pursue litigation

Manufacturer Defenses

Manufacturers may raise affirmative defenses under Indiana Code § 24-5-13-18.

Common Manufacturer Defenses

Defense	Manufacturer's Argument	Consumer's Counter
No substantial impairment	Defect does not substantially impair use, value, or safety	Document how defect affects daily use and safety
Consumer abuse or neglect	Defect caused by owner abuse or neglect	Provide maintenance records showing proper care
Unauthorized modifications	Problem resulted from unauthorized modifications	Show defect existed before modifications or is unrelated
Unauthorized alterations	Vehicle was altered by someone other than manufacturer/dealer	Demonstrate that alterations did not cause the nonconformity

Prohibited Conduct

Under Indiana Code § 24-5-13-16, a manufacturer, its agent, or authorized dealer may not refuse to diagnose or repair any vehicle for the purpose of avoiding liability under the lemon law.

Used Vehicle Protections

Indiana's Motor Vehicle Protection Act is primarily designed for new vehicles. However, several protections exist for used vehicle buyers.

Remaining Manufacturer Warranty

The definition of "buyer" includes any person to whom a motor vehicle is transferred during the term of protection. If you purchase a used vehicle that is still within the original 18 months/18,000 miles protection period, you may have lemon law rights.

Methamphetamine Vehicle Disclosure

Under Indiana Code §§ 24-5-13-16.1 and 24-5-13-16.2, Indiana law requires disclosure when selling any motor vehicle that was used to manufacture methamphetamine within the previous two years. Failure to disclose can result in:

• Decontamination at seller's expense
• Reimbursement for buyer's remediation costs
• Liquidated damages up to $10,000

Federal Magnuson-Moss Warranty Act

The federal Magnuson-Moss Warranty Act provides additional protections for used vehicle buyers with active warranty coverage.

Leased Vehicle Rights

Indiana's lemon law includes specific provisions for leased vehicles under Indiana Code § 24-5-13-11.5.

Leased Vehicle Refund

If a leased motor vehicle qualifies as a lemon, the refund is distributed as follows:

Lessee Receives:

• All deposit and lease payments paid to the lessor
• Credits and allowances for any trade-in vehicles
• Less a reasonable allowance for use

Lessor Receives:

• Purchase cost including freight and accessories
• Fees paid to obtain the lease
• Insurance premiums or costs expended for lessee's benefit
• Sales tax paid by lessor
• 5% of the lessor's purchase cost
• Less total payments received from lessee

Usage Deduction for Leases

The usage deduction for leased vehicles is calculated as:

Usage Deduction = (Total Lease Obligation × Miles Before Return) ÷ 100,000

Statute of Limitations

Understanding the deadlines for filing a lemon law claim is critical under Indiana Code § 24-5-13-23.

Filing Deadlines

• Term of protection: Nonconformity must be reported within 18 months or 18,000 miles of delivery
• Repair obligation: Manufacturer must repair even after term expires if reported during term
• Civil action: Must be filed within applicable statute of limitations

Tolling Provisions

The 30 business day out-of-service period is extended during:

• War
• Invasion
• Civil unrest
• Fire
• Natural disaster
• Terrorist attack
• Act of God
• Act of war

During these events, the manufacturer must provide or make provision for free use of a vehicle to the affected consumer.

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