What is a ‘lemon’ anyway? Here’s how a proposed ‘lemon law’ can help you

Malay Mail
Malay Mail

Malaysia is proposing a so-called “lemon law” that would provide vehicle buyers in the country more protection against faulty purchase, up to and including a full refund for cars falling below an acceptable standard of quality.

Why is this coming now?

  • In the past five years, the government received 1,637 complaints on the quality of new and used cars that were just purchased.

  • Malaysia already has similar laws but their limits are too low to cover new cars

  • Hire-purchase agreements limit buyers’ legal standing to make claims in such dispute

Here is what we know from what the Domestic Trade and Cost of Living Ministry has said and what is already in the Consumer Protection Act:

Wait, what are ‘lemons’?

The term “lemon” is an American colloquialism typically used to describe cars of such poor quality as to cause disappointment and the expression one would make from biting into a sour lemon.

What will a lemon law do?

On March 19, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali told Parliament the proposed law would grant further remedies to buyers of chronically faulty cars, such as repairs, replacements and part or full refunds.

Is this new?

According to Armizan, Malaysia actually has similar provisions to a “lemon law” in the Consumer Protection Act 1999, the Contracts Act 1950, the Sale of Goods Act 1957 and the Hire Purchase Act 1967.

For example, the Consumer Protection Act lets consumers seek redress for defective products up to full refunds, but its Tribunal for Consumer Claims can only hear matters up to RM50,000 that is lower than most new cars today.

When will this ‘lemon’ law come?

On June 4, the ministry reportedly said it is aiming to introduce a Bill for such a law next March, and that an ongoing feasibility study would be complete in September.

Among other things, the ministry is looking at best practices in countries such as the US, Canada, Singapore and the Philippines.

Okay, so what happens in the meantime?

On June 4, Armizan said the ministry will carry out two interim measures. The first is a taskforce to arbitrate disputes over cars and motorcycles still within six months of their purchase date.

The second is to get Bank Negara Malaysia’s cooperation in securing consent letters from banks for buyers to make claims either in the Tribunal for Consumer Claims or court.