Iowa State Statutes
322G.1 Legislative intent.
The general assembly recognizes that a motor vehicle is a major consumer acquisition
and that a defective motor vehicle undoubtedly creates a hardship for the consumer. The
general assembly further recognizes that a duly franchised motor vehicle dealer is an
authorized service agent of the manufacturer. It is the intent of the general assembly
that a good faith motor vehicle warranty complaint by a consumer be resolved by the
manufacturer within a specified period of time. It is further the intent of the general
assembly to provide the statutory procedures whereby a consumer may receive a replacement
motor vehicle, or a full refund, for a motor vehicle which cannot be brought into
conformity with the warranty provided for in this chapter. However, this chapter does not
limit the rights or remedies which are otherwise available to a consumer under any other
As used in this chapter, unless the context otherwise requires:
1. "Collateral charges" means those additional charges to a consumer
wholly incurred as a result of the acquisition of the motor vehicle. For the purposes of
this chapter, collateral charges include, but are not limited to, charges for
manufacturer-installed or agent-installed items, earned finance charges, use taxes, and
2. "Condition" means a general problem that may be attributable to a
defect in more than one part.
3. "Consumer" means the purchaser or lessee, other than for purposes
of lease or resale, of a new or previously untitled motor vehicle, or any other person
entitled by the terms of the warranty to enforce the obligations of the warranty during
the duration of the lemon law rights period.
4. "Days" means calendar days.
5. "Department" means the attorney general.
6. "Incidental charges" means those reasonable costs incurred by the
consumer, including, but not limited to, towing charges and the costs of obtaining
alternative transportation, which are the direct result of the nonconformity or
nonconformities which are the subject of the claim. Incidental charges do not include
loss of use, loss of income, or personal injury claims.
7. "Lease price" means the aggregate of the following:
a. Lessor's actual purchase costs.
b. Collateral charges, if applicable.
c. Any fee paid to another to obtain the lease.
d. Any insurance or other costs expended by the lessor for the benefit of
e. An amount equal to state and local use taxes, not otherwise included as
collateral charges, paid by the lessor when the vehicle was initially purchased.
f. An amount equal to five percent of the lessor's actual purchase cost.
8. "Lemon law rights period" means the term of the manufacturer's
written warranty, the period ending two years after the date of the original delivery of
a motor vehicle to a consumer, or the first twenty-four thousand miles of operation
attributable to a consumer, whichever expires first.
9. "Lessee" means any consumer who leases a motor vehicle for one
year or more pursuant to a written lease agreement which provides that the lessee is
responsible for repairs to the motor vehicle.
10. "Lessee cost" means the aggregate of the deposit and rental
payments previously paid to the lessor for the leased vehicle.
11. "Lessor" means a person who holds the title to a motor vehicle
leased to a lessee under a written lease agreement or who holds the lessor's rights
under the agreement.
12. "Manufacturer" means a person engaged in the business of
constructing or assembling new motor vehicles or installing on previously assembled
vehicle chassis special bodies or equipment which, when installed, form an integral part
of the new motor vehicle, or a person engaged in the business of importing new motor
vehicles into the United States for the purpose of selling or distributing the new motor
vehicles to new motor vehicle dealers.
13. "Motor vehicle" means a self-propelled vehicle purchased or
leased in this state, except as provided in section 322G.15, and primarily designed for
the transportation of persons or property over public streets and highways, but does not
include mopeds, motorcycles, motor homes, or vehicles over ten thousand pounds gross
vehicle weight rating.
14. "Nonconformity" means a defect, malfunction, or condition in a
motor vehicle such that the vehicle fails to conform to the warranty, but does not
include a defect, malfunction, or condition that results from an accident, abuse,
neglect, modification, or alteration of the motor vehicle by persons other than the
manufacturer or its authorized service agent.
15. "Person" means person as defined in section 714.16.
16. "Program" means an informal dispute settlement procedure
established by a manufacturer which mediates and arbitrates motor vehicle warranty
disputes arising in this state.
17. "Purchase price" means the cash price paid for the motor vehicle
appearing in the sales agreement or contract, including any net allowance given for a
18. "Reasonable offset for use" means the number of miles
attributable to a consumer up to the date of the third attempt to repair the same
nonconformity which is the subject of the claim, or the first attempt to repair a
nonconformity that is likely to cause death or serious bodily injury, or the twentieth
cumulative day when the vehicle is out of service by reason of repair of one or more
nonconformities, whichever occurs first, multiplied by the purchase price of the
vehicle, or in the event of a leased vehicle, the lessor's actual lease price plus an
amount equal to two percent of the purchase price, and divided by one hundred twenty
19. "Replacement motor vehicle" means a motor vehicle which is
identical or reasonably equivalent to the motor vehicle to be replaced, and as the motor
vehicle to be replaced would have existed without the nonconformity at the time of
20. "Substantially impair" means to render the motor vehicle unfit,
unreliable, or unsafe for warranted or ordinary use, or to significantly diminish the
value of the motor vehicle.
21. "Warranty" means any written warranty issued by the
manufacturer; or any affirmation of fact or promise made by the manufacturer, excluding
statements made by the dealer, in connection with the sale or lease of a motor vehicle
to a consumer, which relates to the nature of the material or workmanship and affirms or
promises that the material or workmanship is free of defects or will meet a specified
level of performance.
322G.3 Duties of manufacturer.
1. At the time of the consumer's purchase or lease of the vehicle, the
manufacturer shall provide to the consumer a written statement that explains the
consumer's rights and obligations under this chapter. The written statement shall be
prepared by the attorney general and shall contain a telephone number that the consumer
can use to obtain information from the attorney general regarding the rights and
obligations provided under this chapter.
2. At the time of the consumer's purchase or lease of the vehicle, the
manufacturer shall provide to the consumer the address and phone number for the zone,
district, or regional office of the manufacturer for this state where a claim may be
filed by the consumer. This information shall be provided to the consumer in a clear and
conspicuous manner. Within thirty days of the introduction of a new model year for each
make and model of motor vehicle sold in this state, the manufacturer shall notify the
attorney general of such introduction. The manufacturer shall also inform the attorney
general that a copy of the owner's manual and applicable written warranties shall be
provided upon request and provide information as to where the request should be made.
The manufacturer shall inform the attorney general where such a request should be
directed and shall provide the copy of the owner's manual and applicable written
warranties within five business days of a request by the attorney general.
3. A manufacturer or the authorized service agent of the manufacturer shall
make repairs as necessary to conform the vehicle to the warranty if a motor vehicle does
not conform to the warranty and the consumer reports the nonconformity to the
manufacturer or authorized service agent during the lemon law rights period. Such
repairs shall be made irrespective of whether they can be made prior to the expiration
of the lemon law rights period.
4. A manufacturer or the authorized service agent of the manufacturer, shall
provide to the consumer, each time the motor vehicle is returned after being examined or
repaired under the warranty, a fully itemized, legible statement or repair order
indicating any diagnosis made, and all work performed on the motor vehicle including,
but not limited to, a general description of the problem reported by the consumer or an
identification of the defect or condition, parts and labor, the date and the odometer
reading when the motor vehicle was submitted for examination or repair, and the date
when the repair or examination was completed.
5. Upon request from the consumer, the manufacturer, or the authorized service
agent of the manufacturer, shall provide a copy of either or both of the following:
a. Any report or printout of any diagnostic computer operation compiled by
the manufacturer or authorized service agent regarding an inspection or diagnosis of
the motor vehicle.
b. A copy of any technical service bulletin issued by the manufacturer
regarding the year and model of the motor vehicle as it pertains to any material,
feature, component, or the performance of the motor vehicle.
322G.4 Nonconformity of motor vehicles.
1. After three attempts have been made to repair the same nonconformity that
substantially impairs the motor vehicle, or after one attempt to repair a nonconformity
that is likely to cause death or serious bodily injury, the consumer may give written
notification, which shall be by certified or registered mail or by overnight service, to
the manufacturer of the need to repair the nonconformity in order to allow the
manufacturer a final attempt to cure the nonconformity. The manufacturer shall, within
ten days after receipt of such notification, notify and provide the consumer with the
opportunity to have the vehicle repaired at a reasonably accessible repair facility and
after delivery of the vehicle to the designated repair facility by the consumer, the
manufacturer shall, within ten days, conform the motor vehicle to the warranty. If the
manufacturer fails to notify and provide the consumer with the opportunity to have the
vehicle repaired at a reasonably accessible repair facility or perform the repairs
within the time periods prescribed in this subsection, the requirement that the
manufacturer be given a final attempt to cure the nonconformity does not apply.
After twenty or more cumulative days when the motor vehicle has been out of service
by reason of repair of one or more nonconformities, the consumer may give written
notification to the manufacturer which shall be by certified or registered mail or by
overnight service. Commencing upon the date such notification is received, the
manufacturer has ten cumulative days when the vehicle has been out of service by
reason of repair of one or more nonconformities to conform the motor vehicle to the
2. If the manufacturer, or its authorized service agent, has not conformed the
motor vehicle to the warranty by repairing or correcting one or more nonconformities
that substantially impair the motor vehicle after a reasonable number of attempts, the
manufacturer shall, within forty days of receipt of payment by the manufacturer of a
reasonable offset for use by the consumer, replace the motor vehicle with a replacement
motor vehicle acceptable to the consumer, or repurchase the motor vehicle from the
consumer or lessor and refund to the consumer or lessor the full purchase or lease
price, less a reasonable offset for use. The replacement or refund shall include payment
of all collateral and reasonably incurred incidental charges. The consumer has an
unconditional right to choose a refund rather than a replacement. If the consumer elects
to receive a refund, and the refund exceeds the amount of the payment for a reasonable
offset for use, the requirement that the consumer pay the reasonable offset for use in
advance does not apply, and the manufacturer shall deduct that amount from the refund
due to the consumer. If the consumer elects a replacement motor vehicle, the
manufacturer shall provide the consumer a substitute motor vehicle to use until such
time as the replacement vehicle is delivered to the consumer. At the time of the refund
or replacement, the consumer, lien holder, or lessor shall furnish to the manufacturer
clear title to and possession of the original motor vehicle.
Refunds shall be made to the consumer and lien holder of record, if any, as their
interests appear. If applicable, refunds shall be made to the lessor and lessee as
follows: the lessee shall receive the lessee's cost less a reasonable offset for use,
and the lessor shall receive the lease price less the aggregate deposit and rental
payments previously paid to the lessor for the leased vehicle. If it is determined
that the lessee is entitled to a refund pursuant to this chapter, the consumer's lease
agreement with the lessor is terminated upon payment of the refund and no penalty for
early termination shall be assessed. The department of revenue and finance shall
refund to the manufacturer any use tax which the manufacturer refunded to the
consumer, lessee, or lessor under this section, if the manufacturer provides to the
department of revenue and finance a written request for a refund and evidence that the
use tax was paid when the vehicle was purchased and that the manufacturer refunded the
use tax to the consumer, lessee, or lessor.
3. It is presumed that a reasonable number of attempts have been undertaken to
conform a motor vehicle to the warranty if, during the lemon law rights period, any of
the following occur:
a. The same nonconformity that substantially impairs the motor vehicle has
been subject to examination or repair at least three times by the manufacturer or its
authorized service agent, plus a final attempt by the manufacturer to repair the motor
vehicle if undertaken as provided for in subsection 1, and such nonconformity
continues to exist.
b. A nonconformity that is likely to cause death or serious bodily injury
has been subject to examination or repair at least one time by the manufacturer or its
authorized service agent, plus a final attempt by the manufacturer to repair the motor
vehicle if undertaken as provided for in subsection 1, and such nonconformity
continues to exist.
c. The motor vehicle has been out of service by reason of repair by the
manufacturer, or its authorized service agent, of one or more nonconformities that
substantially impair the motor vehicle for a cumulative total of thirty or more days,
exclusive of down time for routine maintenance prescribed by the owner's manual. The
thirty-day period may be extended by any period of time during which repair services
are not available to the consumer because of war, invasion, strike, fire, flood, or
The terms of this subsection shall be extended for a period of up to two years
after the date of the original delivery of a motor vehicle to a consumer, or the
first twenty-four thousand miles of operation attributable to a consumer, whichever
occurs first, if a nonconformity has been reported but has not been cured by the
manufacturer, or its authorized service agent, before the expiration of the lemon
law rights period.
4. A manufacturer, or its authorized service agent, shall not refuse to
examine or repair any nonconformity for the purpose of avoiding liability under this
322G.5 Affirmative defenses.
Any of the following is an affirmative defense to a claim under this chapter:
1. The alleged nonconformity or nonconformities do not substantially impair
the motor vehicle.
2. A nonconformity is the result of an accident, abuse, neglect, or
unauthorized modification or alteration of the motor vehicle by a person other than the
manufacturer or its authorized service agent.
3. The claim by the consumer was not filed in good faith.
4. Any other defense allowed by law which may be raised against the claim.
322G.6 Informal dispute settlement procedures
Operations and certification.
1. At the time of the consumer's purchase or lease of the vehicle, a
manufacturer who has established a program certified pursuant to this section shall, at
a minimum, clearly and conspicuously disclose to the consumer in written materials
accompanying the vehicle how and where to file a claim with the program.
2. A certified program shall be funded and competently staffed at a level
sufficient to ensure fair and expeditious resolution of all disputes, and shall not
charge consumers any fee for use of the program. The manufacturer shall take all steps
necessary to ensure that a certified program and its staff and decision makers are
sufficiently insulated from the manufacturer so that the performance of the staff and
the decisions of the decision makers are not influenced by the manufacturer. Such steps,
at a minimum, shall ensure that the manufacturer does not make decisions on whether a
consumer's dispute proceeds to the decision maker. Staff and decision makers of a
certified program shall be trained in the provisions of this chapter and rules adopted
under this chapter.
3. A certified program shall allow an oral presentation by a party, or by a
party's employee, agent, or representative.
Within five days following the consumer's notification to the certified program of
the dispute, the program shall inform each party of their right to make an oral
Meetings of a certified program to hear and decide disputes shall be open to
observers, including either party to the dispute, on reasonable and nondiscriminatory
4. A certified program shall render a decision no later than sixty days from
the day of the consumer's notification of the dispute, provided that a significant
number of decisions are rendered within forty days. For the purposes of this section,
notification is deemed to have occurred when a certified program has received the
consumer's name and address; the current date and the date of the original delivery of
the motor vehicle to a consumer; the year, make, model, and identification number of the
motor vehicle; and a description of the nonconformity. If the consumer has not
previously notified the manufacturer of the nonconformity, the sixty-day period is
extended for an additional seven days with the provisions of and the rules adopted under
this chapter, and has informed the consumer how and where to file a claim with the
program pursuant to subsection 1, the provisions of section 322G.4, subsection 2, do not
apply to any consumer who has not first resorted to the program.
322G.7 Informal dispute settlement procedure
To facilitate uniform application, interpretation, and enforcement of this section and
section 322G.6, and in implementing rules adopted pursuant to section 322G.14, the
attorney general may cooperate with agencies that perform similar functions in any other
states that enact these or similar sections. The cooperation authorized by this subsection
may include any of the following:
1. Establishing a central depository for copies of all applications and
accompanying materials submitted by manufacturers for certification, and all reports
prepared, notices issued, and determinations made by the attorney general under section
2. Sharing and exchanging information, documents, and records pertaining to
3. Sharing personnel to perform joint reviews, surveys, and investigations of
4. Preparing joint reports evaluating program operations.
5. Granting joint certifications and certification renewals.
6. Issuing joint denials or revocations of certification.
7. Holding a joint administrative hearing.
8. Formulating, in accordance with chapter 17A, the administrative procedure
Act, rules or proposed rules on matters such as guidelines, forms, statements of policy,
interpretative opinions, and any other information necessary to implement section
322G.8 Consumer remedies.
1. If a consumer resorts to a manufacturer's certified program and a decision
is not rendered within the time periods allowed in this chapter, or a manufacturer has
no certified program and the consumer has notified the manufacturer pursuant to section
322G.4, subsection 1, the consumer may file an action in district court under this
chapter within one year from the expiration of the lemon law rights period or an
extension of the period pursuant to section 322G.4, subsection 3.
2. If a consumer resorts to a manufacturer's certified program and is not
satisfied with the performance of the manufacturer as ordered in the decision, or the
manufacturer does not perform as directed by the decision within the time period
specified in the decision, the consumer may file an action in district court under this
chapter within six months after the date prescribed in the decision by which the
manufacturer must fulfill the terms of the decision. If the consumer declines to accept
the decision of the manufacturer's certified program, the consumer may appeal the
decision pursuant to subsection 4. For purposes of this subsection, "not satisfied
with the performance of the decision" means, following the consumer's acceptance of
the decision, the consumer indicates that the manufacturer failed to comply with the
terms of the decision within the time specified in the decision or failed to cure the
nonconformity within the time specified in the decision if further repairs were ordered.
3. In an action under either subsection 1 or 2, the court shall award a
consumer who prevails the amount of any pecuniary loss, including relief the consumer is
entitled to under section 322G.4, subsection 2, reasonable attorney's fees, and costs.
In addition, if the court affirms the decision of the certified program, the court may
award any additional amounts allowed under subsection 7.
4. A certified program's decision is final unless appealed by either party. A
petition to the district court to appeal a decision must be made within fifty days after
receipt of the decision or within twenty-five days from the date the consumer indicates
acceptance of the decision to the manufacturer, whichever occurs first. Within seven
days after the petition has been filed, the appealing party must send, by certified,
registered, or express mail, a copy of the petition to the attorney general. If the
attorney general receives no notice of the petition within sixty days after the
manufacturer's receipt of a decision in favor of the consumer, and the consumer has
indicated acceptance of the decision within the twenty-five days of receipt of the
decision, but the manufacturer has neither complied with, nor petitioned to appeal the
decision, the attorney general may apply to the court to impose a fine up to one
thousand dollars per day against the manufacturer until the amount stands at twice the
purchase price of the motor vehicle, unless the manufacturer provides clear and
convincing evidence that the delay or failure was beyond its control or was acceptable
to the consumer as evidenced by a written statement signed by the consumer. If the
manufacturer fails to provide such evidence or fails to pay the fine, the attorney
general shall initiate proceedings against the manufacturer for failure to pay the fine.
The proceeds from the fine imposed shall be placed in the attorney general's motor
vehicle fraud and odometer law enforcement fund for implementation and enforcement of
5. If the manufacturer fails to comply with a decision which has been timely
accepted by the consumer or fails to file a timely petition for appeal, the court shall
affirm the board's decision upon application by the consumer.
6. An appeal of a decision by a certified program to the court by a consumer
or a manufacturer shall be tried de novo, and may be based upon stipulated facts. In a
written petition to appeal a decision by the board, the appealing party must state the
action requested and the grounds relied upon for appeal.
7. If a decision of the certified program in favor of the consumer is affirmed
or upheld by the court, recovery by the consumer shall include the pecuniary value of
the award, including relief the consumer is entitled to under section 322G.4, subsection
2, attorney's fees incurred in obtaining confirmation of the award, and all costs and
continuing damages in an amount of twenty-five dollars per day for all days beyond the
twenty-five-day period following the manufacturer's receipt of the consumer's acceptance
of the certified program's decision. If a court determines that a manufacturer filed a
petition for appeal to be tried de novo in bad faith or brought such an appeal solely
for the purpose of harassment, the court shall double, and may triple, the amount of the
total award, after consideration of all circumstances.
8. Appellate review of a court decision in favor of the consumer may be
conditioned upon payment by the manufacturer of the consumer's attorney's fees and
giving security for costs and expenses resulting from the review period.
9. This chapter does not prohibit a consumer from pursuing other rights or
remedies under any other law.
322G.9 Compliance and disciplinary action.
The attorney general may enforce and ensure compliance with the provisions of this
chapter and rules adopted pursuant to section 322G.14, may issue subpoenas requiring the
attendance of witnesses and the production of evidence, and may petition any court having
jurisdiction to compel compliance with the subpoenas. The attorney general may levy and
collect an administrative fine in an amount not to exceed one thousand dollars for each
violation against any manufacturer found to be in violation of this chapter or rules
adopted pursuant to section 322G.14. A manufacturer may request a hearing pursuant to
chapter 17A, the administrative procedure Act, if the manufacturer contests the fine
levied against it. The proceeds from any fine levied and collected pursuant to this
section shall be placed in the attorney general's motor vehicle fraud and odometer law
enforcement fund for implementation and enforcement of this chapter.
322G.10 Unfair or deceptive trade practice.
A violation by a manufacturer of this chapter is an unfair or deceptive trade practice
in violation of section 714.16, subsection 2, paragraph "a".
322G.11 Dealer liability.
This chapter, except for the requirements of section 322G.12, does not impose any
liability on a franchised motor vehicle dealer or create a cause of action by a consumer
against a dealer. A dealer shall not be made a party defendant in any action involving or
relating to this chapter, except as provided in this section. The manufacturer shall not
charge back or require reimbursement by the dealer for any costs, including but not
limited to any refunds or vehicle replacements, incurred by the manufacturer pursuant to
this chapter, in the absence of a finding by a court that the related repairs had been
carried out by the dealer in a manner substantially inconsistent with the manufacturer's
published instructions. A manufacturer who is found by a court to have improperly charged
back a dealer because of a violation of this section is liable to the injured dealer for
full reimbursement plus reasonable costs and any attorney's fees.
322G.12 Resale of returned vehicles.
Subsequent to December 31, 1991, a manufacturer who accepts the return of a motor
vehicle pursuant to a settlement, determination, or decision under this chapter shall
notify the state department of transportation and report the vehicle identification number
of that motor vehicle within ten days after the acceptance. The state department of
transportation shall note the fact that the motor vehicle was returned pursuant to this
chapter on the title for the motor vehicle. A person shall not knowingly lease; or sell,
either at wholesale or retail; or transfer a title to a motor vehicle returned by reason
of a settlement, determination, or decision pursuant to this chapter or a similar statute
of any other state unless the nature of the nonconformity is clearly and conspicuously
disclosed to the prospective transferee, lessee, or buyer. The attorney general shall
prescribe by rule the form, content, and procedure pertaining to such a disclosure
statement, recognizing the need of manufacturers to implement a uniform disclosure form.
The manufacturer shall make a reasonable effort to ensure that such disclosure is made to
the first subsequent retail buyer or lessee. For purposes of this subsection,
"settlement" includes an agreement entered into between the manufacturer and the
consumer that occurs after the dispute has been submitted to a state-operated dispute
resolution program or to a manufacturer-established program certified in this or any other
state, but does not include agreements reached in informal proceedings prior to the first
written or oral presentation to the state-operated or state-certified dispute resolution
program by either party. "Settlement" also includes an agreement entered into
between a manufacturer and a consumer that occurs after the dispute has been submitted to
a dispute resolution program that is not state-operated or state-certified.
322G.13 Certain agreements void.
Any agreement entered into by a consumer that waives, limits, or disclaims the rights
set forth in this chapter is void as contrary to public policy.
322G.14 Rulemaking authority.
1. The attorney general shall adopt rules as necessary to implement this
2. In prescribing rules and forms under this chapter, the attorney general may
cooperate with agencies that perform similar functions in other states with a view to
effectuating the policy of this chapter to achieve maximum uniformity in the form and
content of certification, regulation, and procedural evaluation of
manufacturer-established programs, required record keeping, required reporting wherever
practicable, and required notices to consumers.
This chapter applies to motor vehicles originally purchased or leased in this state by
consumers on or after July 1, 1991. Except for section 322G.3, subsections 1 and 2, and
section 322G.6, subsection 1, this chapter applies to motor vehicles originally purchased
or leased in other states, if the consumer is a resident of this state at the time the
consumer's rights are asserted under this chapter. Section 322G.14, which concerns
rulemaking, shall take effect May 9, 1991.