South Dakota Lemon Law (SD)

Terms used in this chapter mean:

1. Consumer the purchaser, other than for purposes of resale, of a new or previously untitled motor vehicle used in substantial part for personal, family or household purposes, and any other person entitled by the terms of such warranty to enforce the obligations of the warranty;
2. Express warranty, a written warranty, so labeled, issued by the manufacturer of a new motor vehicle, including any terms or conditions precedent to the enforcement of obligations under that warranty;
3. Lemon law rights period, the period ending one year after the date of the original delivery of a motor vehicle to a consumer or the first twelve thousand miles of operation, whichever first occurs;
4. Manufacturer, the person, firm or corporation engaged in the business of manufacturing, importing or distributing motor vehicles to be made available to a motor vehicle dealer for retail sale;
5. Motor vehicle, every vehicle intended primarily for use and operation on the public highways which is self-propelled. The term does not apply to any motor home or to any motor vehicle having a manufacturer's gross vehicle weight rating of ten thousand pounds or more;
6. Motor vehicle dealer or authorized dealer, any person operating under a dealer agreement from a manufacturer and licensed pursuant to chapter 32-6B;
7. Nonconforming condition, any condition of a motor vehicle which is not in conformity with the terms of any express warranty issued by the manufacturer to a consumer and which significantly impairs the use, value or safety of the motor vehicle and occurs or arises solely in the course of the ordinary use of the motor vehicle, and which does not arise or occur as a result of abuse, neglect, modification or alteration of the motor vehicle not authorized by the manufacturer, nor from any accident or other damage to the motor vehicle which occurs or arises after the motor vehicle was delivered by an authorized dealer to the consumer;
8. Notice of a nonconforming condition, a written statement delivered to the manufacturer and which describes the motor vehicle, the nonconforming condition, and all previous attempts to correct such nonconforming condition by identifying the person who made the attempt and the time the attempt was made.

If a new motor vehicle does not conform to any applicable express warranty and the consumer delivers the motor vehicle to the manufacturer or its authorized dealer and gives notice of the nonconforming condition during the lemon law rights period, the manufacturer of the motor vehicle shall make the necessary repairs to the motor vehicle to remedy any such nonconforming condition. The repairs are required even after the expiration of the lemon law rights period if notice of the nonconforming condition was first given during the lemon law rights period. However, the manufacturer's obligation to repair the nonconforming condition does not extend beyond the period of twenty-four months following delivery of the vehicle or twenty-four thousand miles, whichever occurs first.

If, after reasonable attempts, the manufacturer or its authorized dealer is unable to conform the motor vehicle to any express warranty by repairing or correcting a nonconforming condition of the motor vehicle which first occurred during the lemon law rights period, the manufacturer shall, at the option of the consumer, replace the motor vehicle with a comparable new motor vehicle or shall accept return of the vehicle from the consumer and refund to the consumer the following:

1. The full contract price including charges for undercoating, dealer preparation and transportation charges, and installed options, plus the nonrefundable portions of extended warranties and service contracts;
2. All collateral charges, including excise tax, license and registration fees and similar government charges;
3. All finance charges incurred by the consumer after he first reported the nonconformity to the manufacturer or its authorized dealer; and
4. Any incidental damages which shall include the reasonable cost of alternative transportation during the period that the consumer is without the use of the motor vehicle because of the nonconforming condition.

Refunds shall be made to the consumer and any lien holders, as their interests may appear. There shall be offset against any monetary recovery of the consumer a reasonable allowance for the consumer's use of the vehicle. A reasonable allowance for use is that amount directly attributable to use by the consumer before his first report of the nonconformity to the manufacturer or authorized dealer and shall be calculated by multiplying the full purchase price of the motor vehicle by a fraction having as its denominator one hundred thousand and having as its numerator the number of miles that the vehicle traveled before the first report of nonconformity.

If, within the term specified in Section 56-28-30, the manufacturer, through its agents or authorized dealer, is unable to conform the motor vehicle to any applicable express warranty by repairing or correcting any defect or condition which substantially impairs the use, market value, or safety of the motor vehicle to the consumer after a reasonable number of attempts, the manufacturer shall replace the motor vehicle with a comparable motor vehicle, or at its option, accept return of the vehicle from the consumer and refund to the consumer the full purchase price as delivered including applicable finance charges, sales taxes, license fees, registration fees, and any other similar governmental charges, less a reasonable allowance for the consumer's use of the vehicle. Refunds must be made to the consumer and lienholder, if any, as their interest may appear on the record of ownership kept by the Division of Motor Vehicles. A reasonable allowance for use must be that amount directly attributable to use by the consumer before his first report of the nonconformity to the manufacturer, agent, or dealer, and must be calculated by multiplying the full purchase price of the vehicle by a fraction having as its denominator one hundred twenty thousand and having as its numerator the number of miles that the vehicle traveled before the first report of nonconformity. The consumer is not entitled to a refund or replacement if:

1. the nonconformity does not substantially impair the motor vehicle's use, market value, or safety;
2. the nonconformity is the result of abuse, neglect, or modification or alteration of the motor vehicle by the consumer.

(A) It is presumed that a reasonable number of attempts have been undertaken to conform a motor vehicle to the applicable express warranties if:

1. the same nonconformity has been subject to repair three or more times by the manufacturer, or its agent, within the express warranty term, but the nonconformity continues to exist; or
2. the vehicle is out of service by reason of repair for a cumulative total of thirty or more calendar days during the express warranty. The term of an express warranty, and the twenty-day period must be extended by any period of time during which repair services are not available to the consumer because of a war, invasion, strike, fire, flood, or other natural disaster.

(B) The manufacturer must provide information regarding consumer complaint remedies with each new motor vehicle. It is the responsibility of the consumer, or his representative, before availing himself of the provisions of this chapter, to give written notification to the manufacturer of the need for the repair of the nonconformity, in order to allow the manufacturer a final opportunity to cure the alleged defect if the manufacturer has clearly and prominently informed the consumer of the requirement of written notification to the manufacturer at the time of sale. The manufacturer, within ten business days, must notify the consumer of a reasonably accessible repair facility of a franchised new vehicle dealer to conform the new vehicle to the express warranty. After delivery of the new vehicle to an authorized repair facility by the consumer, the manufacturer must attempt immediately to repair the vehicle within a period not to exceed ten business days in order to conform the new motor vehicle to the express warranty. If the manufacturer is unable to repair properly the vehicle within the final ten-business-day period, the manufacturer must replace the vehicle with an identical or reasonably equivalent vehicle or refund the purchase price subject to the provisions of Section 56-28-40.

(C) Upon notification from the consumer that the new vehicle has not been conformed to the express warranty, the manufacturer shall inform the consumer if an informal dispute settlement procedure has been established by the manufacturer as enumerated in Section 56-28-60. However, if prior notice by the manufacturer of an informal dispute settlement procedure has been given, no further notice is required.

(D) Any consumer who finally prevails in any action brought under this chapter, may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorney's fees based on actual time expended) and other such costs which are directly attributable to the nonconformity of the motor vehicle determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion determines that such an award of attorney's fees would be inappropriate.

(E) All written notifications required by this section shall be sent by registered, certified, or express mail.

If a manufacturer has established an informal dispute settlement procedure which substantially complies with Title 16 of the Code of Federal Regulations, Part 703, or if the manufacturer participates in a consumer-industry appeals, arbitration, or mediation panel or board, whose decisions are binding on the manufacturer, the provisions of Section 56-28-40 concerning refunds or replacement do not apply to any consumer who has not first resorted to those procedures or to the alternate procedure provided in Section 56-28-90.

Any action brought under this chapter must be commenced within three years following the date of original delivery of the motor vehicle to the consumer.

Nothing in this chapter may be construed as imposing any liability on a motor vehicle dealer or creating a cause of action by a consumer against a motor vehicle dealer under Section 56-28-40. 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 arising out of this chapter in the absence of evidence that the related repairs had been carried out by the dealer in a manner substantially inconsistent with the manufacturer's published instructions.

The Administrator of the Department of Consumer Affairs may establish by regulation a state arbitration board consisting of five members appointed by him to serve at his pleasure. The board shall review matters involving manufacturers that have not created an informal dispute settlement procedure that substantially complies with Title 16 of the Code of Federal Regulations, Part 703. The cost of the arbitration board must be borne by the manufacturer of the vehicle purchased or leased by the consumer.

Any vehicle required to be repurchased by a manufacturer under this chapter or any other provision of law relating to motor vehicle warranties may not be resold, reassigned, or retransferred, either at wholesale or retail in this State, unless:

1. The manufacturer notifies the Administrator of the Department of Consumer Affairs within thirty calendar days, in writing, of the vehicle identification number of that motor vehicle, the reason that the vehicle was repurchased, and provides a statement that all necessary repairs and adjustments have been made and that the vehicle meets acceptable operating standards.
2. The manufacturer provides a written warranty to the subsequent retail purchaser of the vehicle covering the vehicle for twelve months or twelve thousand miles. The warranty must expressly include any component related to the manufacturer's decision to repurchase the vehicle.
3. The manufacturer shall disclose to any dealer or other wholesale purchaser of the fact that the vehicle was required to be repurchased under this chapter or another provision of law relating to motor vehicle warranties.

Every subsequent purchaser must be notified by the seller of the fact that the vehicle was required to be repurchased under the terms of this chapter or another provision of law relating to motor vehicle warranties. Failure to notify properly any purchaser of the requirements of this section subjects the seller to an administrative penalty to be imposed by the administrator up to a maximum of five hundred dollars for each vehicle.