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Bankruptcy Court approves agreement by State Attorneys General
MADISON - Fiat and the new "Chrysler Group LLC" have agreed to honor most of the "Lemon Law" rights of Chrysler buyers when the new company takes control of the U.S. auto maker, Attorney General J.B. Van Hollen announced today. The new Chrysler Group LLC will be owned by Fiat, the UAW, the U.S., and Canada.
State "Lemon Laws" provide consumers with rights and procedures to obtain a refund or a replacement vehicle if a new vehicle develops a significant problem that can't be repaired after a certain number of repair attempts.
"Whether the new Chrysler Group LLC would be required to honor Lemon Law rights for vehicles sold or leased by the company prior to the closure of the Old Chrysler' through the bankruptcy court was an important question that needed to be answered," said Van Hollen.
Lemon Law rights vary from state to state, but they generally apply for several years or up to certain mileage limits for new vehicles purchased or leased by consumers. Additional information on Wisconsin's Lemon Law is available at
Fiat negotiated with a group of state attorneys general and agreed to honor all the rights consumers had under the "Old Chrysler" to seek and obtain a refund or replacement vehicle if their vehicle has a significant or recurring problem. The agreement is contained in the Bankruptcy Court judge's order issued on June 1, 2009.
Under the court order, the "New Chrysler" company "will recognize, honor and pay liabilities under Lemon Laws for additional repairs, refunds, partial refunds (monetary damages) or replacement of a defective vehicle (including reasonable attorneys' fees, if any, required to be paid under such Lemon Laws and necessarily incurred in obtaining those remedies)on vehicles manufactured by the Debtors (Chrysler) in the five years prior to the Closing".
"I want to commend Fiat and the other Chrysler Group LLC Partners for reaching the formal agreement with Lemon Law protections for consumers," said Van Hollen. "It is a very significant win for consumers nationwide."
Van Hollen said the states will be watching the GM bankruptcy carefully for similar issues.