Lemon Laws protect consumers who buy or lease new or used vehicles and other consumer goods that fail to meet minimum standards of quality and performance. These laws hold the manufacturer accountable when they repeatedly attempt to repair an issue arising during the warranty period.
At the Lemon Law Experts, we focus on state and federal lemon law claims. We thought it would be interesting to compare our intuitions about manufacturers against the facts. To do this we looked at every breach of warranty case that has been filed against 12 of the most popular vehicle brands on the state and federal level in the United State from the years 2013-2015.
We found that our results, in addition to showing definitively who receives the most lemon law claims, lend themselves towards challenging (and reinforcing) common presumptions in the world of vehicles.
Lemon Law Claims per/1000 Cars Sold in U.S.
Tesla Focusing on Technology, But How About Quality?
Between the years 2013 and 2015, Tesla fought only three breach of warranty cases in court; two in the California Supreme court, one in federal court. During this time period, Tesla had the least amount of claims against any manufacturer included in our study. At first we were impressed, but then we noticed that Tesla, by far, sold less vehicles than anyone else. In fact, Tesla only sold 61,653 vehicles during this time period. Fiat sold over twice that amount and only received four breach of warranty claims.
So, does Tesla produce the highest quality vehicle? Not necessarily, and here are some numbers to prove it. We looked at lemon law claims per 10,000 vehicles sold. Tesla received 0.0487 claims per 1,000 vehicles sold. Toyota, Mazda, and Fiat all beat this number with 409, 374, and 304 claims per 1,000 vehicle sold, respectively. Yes, Toyota fought 163 state cases and 82 federal cases, but this is made less egregious when we remember that Toyota sold almost 6 million cars.
And Tesla feels it. An investigation done by Reuters shows that last year General Motors spent an average of $400 per vehicle on under-warranty repairs, and set aside $332 for predicted repairs down the road. Tesla spent an average of $1,043 per car on repairs, and set aside $2,036 for predicted problems.
Tesla isn’t doing the worst. But, to answer our question, it certainly isn’t doing the best either.
German Engineering is No Longer the Gold Standard
You’ve heard your grandpa say it, something along the lines of, “Those Germans sure know how to make cars!” But does grandpa know what he’s talking about? We thought we’d check.
Of the four companies receiving the highest percentage of lemon law claims filed against them, three are German (Volkswagen, BMW, Audi). Of the American manufacturers we studied, the average number of lemon law claims per 1,000 cars sold was 0.15. Japanese manufacturers did even better at 0.06. German manufacturers, on the other hand, received 0.38 claims per 1,000 cars sold. That’s more than any other nation. Let’s take a closer look at the data:
Average amount of lemon law claims per 1,000 vehicles sold across manufacturers: 0.1670
- Volkswagen lemon law claims per 1,000 vehicles sold: 0.6574
- BMW lemon law claims per 1,000 vehicles sold: 0.3146
- Audi lemon law claims per 1,000 vehicles sold: 0.16670
According to our study, German manufactures either exceed, or meet the average number of lemon law claims filed against them per 1,000 vehicles sold. It seems clear that if German engineering truly was the best, this wouldn’t be the case. Grandpa was wrong!
*Date range: 2013 – 2015
*Data sources: Bloomberg Law, Automakers & ANDC
*Cases only reflect those that were filed electronically
*Number of cars sold reflects US sales only