Leased Vehicles Under Michigan Lemon Law

Michigan’s Lemon Law covers leased vehicles. MCL § 257.1401(b) defines “consumer” to include lessees.

How Michigan Lemon Law applies to leases

Lessees have full standing. Remedies:

• Lease terminated without penalty.
• Refund of payments made.
• Released from remaining lease obligation.
• Parallel Magnuson-Moss federal attorney fees and (if granted) § 257.1407(2) state fees.

A reasonable use deduction still applies.

The refund math for leases

Element	Amount
Cap-cost reduction	Refunded
Monthly payments	Refunded
Acquisition fee, doc fees	Refunded
Michigan 6% sales tax	Refunded
Registration fees	Refunded
Incidental damages	Refunded
Subtotal	(sum)
Less: reasonable allowance for use	Subtract
Net cash to lessee	Final amount
Plus: Magnuson-Moss § 2310(d)(2) attorney fees	(separate)

Why lessees sometimes hesitate

Same reasons (all usually wrong) — wait for lease end, “I don’t own it,” “not worth the trouble.”

The 1-year reporting window still applies

Lessees must report defects within 1 year of delivery just like purchasers. This is particularly important for leases starting late in a model year — a defect first manifesting at month 13 of a 36-month lease loses Lemon Law protection.

Lease-specific procedural considerations

• Leasing company notified for title transfer.
• Lemon Law remedies override the lease’s disposition charges.
• Michigan’s 1-year reporting window is statutory.

What if your lease has end-of-term wear charges?

Manufacturers can’t impose disposition or wear-and-tear charges when the lease terminates via Lemon Law remedy.

What you should do

1. Report defect within 1 year of delivery.
2. Pull every repair order since lease started.
3. Send certified-mail notice.
4. Get a free case review.

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