PH Lemon Law

• PH lemon law promotes the full protection of the rights of consumers in the sale of motor vehicles against business and trade practices that are deceptive, unfair, or otherwise inimical to consumers and the public interest.
• Brand new motor vehicle refers to a vehicle constructed entirely from new parts and covered by a manufacturer’s express warranty at the time of purchase that it has never been sold or registered with the Department of Transportation and Communications (DOTC) or an appropriate agency or authority, and has never been operated on any highway of the Philippines, or in any foreign state or country.
• Collateral charges refer to the fees paid’ to the Land Transportation Office (LTO) for the registration of a brand new motor vehicle and other incidental expenses such as, but not limited to, the cost of insurance pertaining to the vehicle, chattel mortgage fees and interest expenses if applicable
• Comparable motor vehicle refers to a motor vehicle that is identical or reasonably equivalent to the motor vehicle to be replaced, in terms of specifications and values, subject to availability, as the motor vehicle existed at the time of purchase: Provided, That there shall be an offsetting from this value for reasonable allowance for its use
• Consumer refers to any person, natural or juridical, who purchases a brand new motor vehicle either by cash or credit from an authorized distributor, dealer or retailer in the Philippines
• Dealer or retailer refers to any person, natural or juridical, authorized by the manufacturer or distributor to sell brand new motor vehicles directly to the retail buyers and the public
• Distributor refers to any person, natural or juridical, authorized by the manufacturer to sell brand new motor vehicles to duly authorized dealers or retailers
• Implementing agency refers to the Department of Trade and Industry
• Lemon Law rights period refers to the period ending twelve months after the date of the original delivery of a brand new motor vehicle to a consumer or the first twenty thousand kilometers of operation after such delivery, whichever comes first. 
• Lemon Law rights period refers to the period during which the consumer can report any nonconformity to the standards and specifications of the manufacturer, authorized distributor, authorized dealer or retailer
• Manufacturer refers to any person, natural or juridical, engaged in the business of manufacturing or assembling motor vehicles
• Motor vehicle refers to any self-propelled, four-wheeled road vehicle designed to carry passengers including, but not limited to, sedans, coupes, station wagons, convertibles, pick-ups, vans, sports utility vehicles (SUVs) and Asian Utility Vehicles (AUVs)
• Motor vehicles excludes motorcycles, delivery trucks, dump trucks, buses, road rollers, trolley cars, street sweepers, sprinklers, lawn mowers and heavy equipment such as, but not limited to, bulldozers, payloaders, graders, forklifts, amphibian trucks, cranes, and vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all kinds used exclusively for agricultural purposes.
• Trailers having any number of wheels, when propelled or intended by attachment to a motor vehicle, shall be classified as separate motor vehicle with no power rating
• Nonconformity refers to any defect or condition that substantially impairs the use, value or safety of a brand new motor vehicle which prevents it from conforming to the manufacturer’s or distributor’s standards or specifications, which cannot be repaired.
• Purchase price refers to the invoice price or the amount of money which the dealer or retailer actually received for the brand new motor vehicle, in consideration of the sale of such brand new motor vehicle
• Warranty refers to the written assurance, so labeled, of the manufacturer of a brand new motor vehicle including any term or condition precedent to the enforcement of obligations under the warranty
• Warranty rights period refers to the period provided for under the contract of sale when the manufacturer would guarantee the materials used, the workmanship and the roadworthiness of a brand new motor vehicle for ordinary use or reasonable intended purposes.
• Noncompliance by the consumer of the obligations under the warranty shall be excluded as a cause of nonconformity
• Modifications not authorized by the manufacturer, distributor, authorized dealer or retailer shall be excluded as a cause of nonconformity
• Abuse or neglect of the brand new motor vehicle shall be excluded as a cause of nonconformity
• Damage to the vehicle due to accident or force majeure shall not constitute as cause of nonconformity
• At any time within the Lemon Law rights period, and after at least four (4) separate repair attempts by the same manufacturer, distributor, authorized dealer or retailer for the same complaint, and the nonconformity issue remains unresolved, the consumer may invoke his or her rights under this Act.
• Before availing of any remedy under, the consumer shall, in writing, notify the manufacturer, distributor, authorized dealer, or retailer of the unresolved complaint, and the consumer’s intention to invoke his or her rights under this Act within the Lemon Law rights period
• The warranty booklet issued by the manufacturer, distributor, authorized dealer or retailer shall clearly state the manner and form of such notice to constitute a valid and legal notice
• Subsequent to filing the notice of availment referred to in the preceding section, the consumer shall bring the vehicle to the manufacturer, distributor, authorized dealer or retailer from where the vehicle was purchased for a final attempt to address the complaint of the consumer to his or her satisfaction.
• It shall be the duty of the manufacturer, distributor, authorized dealer or retailer, upon receipt of the motor vehicle and the notice of nonconformity required under Section 6 hereof, to attend to the complaints of the consumer including, as may be necessary, making the repairs and undertaking such actions to make the vehicle conform to the standards or specifications of the manufacturer, distributor, authorized dealer or retailer for such vehicle.
• In case the nonconformity issue remains unresolved despite the manufacturer, distributor, authorized dealer or retailer’s efforts to repair the vehicle, pursuant to the consumer’s availment of his or her Lemon Law rights, the consumer may file a complaint before the DTI as provided for under this Act:
• If the vehicle is not returned for repair, based on the same complaint, within thirty (30) calendar days from the date of notice of release of the motor vehicle to the consumer following this repair attempt within the Lemon Law rights period, the repair is deemed successful
• In the event that the nonconformity issue still exists or persists after the thirty (30)-day period but still within the Lemon Law rights period, the consumer may be allowed to avail of the same remedies under Sections 5 and 6 hereof.
• The consumer shall be provided a reasonable daily transportation allowance, an amount which covers the transportation of the consumer from his or her residence to his or her regular workplace or destination and vice versa, equivalent to air-conditioned taxi fare, as evidenced by official receipt, or in such amount to be agreed upon by the parties, or a service vehicle at the option of the manufacturer, distributor, authorized dealer or retailer.
• In case of disagreement on the matter of transportation allowance, the same shall be resolved by the DTI.
• The DTI shall exercise exclusive and original jurisdiction over disputes arising from the provisions of this Act.
• All disputes arising from the provisions of this Act shall be settled by the DTI in accordance with the following dispute resolution mechanisms: (a) Mediation; (b) Arbitration; and (c) Adjudication.
• The principles of negotiation, conciliation and mediation towards amicable settlement between the manufacturer, distributor, authorized dealer or retailer and the consumer shall be strictly observed
•  In the course of its dispute resolution efforts, the DTI shall endeavor to independently establish the validity of the consumer’s outstanding complaint. Any cost incurred in establishing the validity of the consumer’s complaint shall be borne jointly by the consumer and the manufacturer
• The complaint shall be deemed valid if it is independently established that the motor vehicle does not conform to the standards or specifications set by the manufacturer
• Upon failure of the negotiation or mediation between the manufacturer, distributor, authorized, dealer or retailer and the consumer, the parties shall execute a certificate attesting to such failure
•  All disputes that have been submitted for mediation shall be settled not later than ten (10) working days from the date of filing of the complaint with the DTI.
• In the event there is a failure to settle the complaint during the mediation proceedings, both parties may voluntarily decide to undertake arbitration proceedings.