Is Arbitration Required for a Lemon Law Dispute?
Last updated: October 2026
Key Takeaways
Michigan and Ohio do not require mediation in a lemon law dispute, but both require the consumer to use the manufacturer’s informal dispute settlement program, usually an arbitration program such as BBB AUTO LINE, before filing a lawsuit, if the manufacturer offers one.
The program’s decision binds the manufacturer only if the consumer accepts it; a consumer who rejects the decision keeps every right under the lemon law.
In Ohio, the five-year deadline to sue is paused while a claim is pending in the program.
Twenty-five manufacturers, including Ford, GM’s brands, Hyundai, Kia, Nissan, and Volkswagen, currently use BBB AUTO LINE nationally; Stellantis brands and some others use different programs or none.
Lemon laws are designed to provide remedies for consumers who have purchased a product, usually a car, which has repeatedly failed to meet the expected standards of quality and performance.
It is commonly estimated that about 150,000 new vehicles sold in the United States each year turn out to be lemons. The question many owners ask once the dealership cannot fix the problem is whether they have to go through some form of dispute resolution with the manufacturer before they can demand a refund or replacement. The answer in Michigan and Ohio is that mediation is not required, but a different step, the manufacturer’s informal dispute settlement program, often is.
If you believe that your car is a lemon and want to understand if mediation is required, consulting with an experienced lemon law attorney is crucial for proper guidance.
What Qualifies as a Lemon?
In general, the problems with the car must occur while the vehicle remains under warranty. To qualify as a lemon in Ohio or Michigan, generally, the car must:
Have a defect covered by the manufacturer’s warranty that substantially impairs the vehicle’s use or value (in Ohio, use, value, or safety) and was first reported within the warranty term or one year of delivery in Michigan, or within one year or 18,000 miles in Ohio.
Have a defect that persists after a reasonable number of repair attempts: four attempts within two years in Michigan, or three attempts in Ohio.
Have been out of service for repairs for a cumulative total of 30 or more days within the coverage window.
If you are in Ohio, additional ways that your vehicle may be presumed to be a lemon include:
Eight or more repairs in an effort to fix various problems, or
One attempt to repair a defect that was likely to cause death or serious injury
However, what qualifies as substantial defect or repair attempts often differs. An experienced attorney can evaluate your unique situation and enlighten you about your available options to seek remedy.
Is Arbitration Required Before Filing a Lemon Law Claim?
Mediation, where a neutral facilitator helps the parties negotiate, is not a step in either state’s lemon law. What the law does require is participation in the manufacturer’s informal dispute settlement program, if the manufacturer has one.
In Michigan, MCL 257.1405 provides that the lemon law’s remedies are not available to a consumer who has not first used the manufacturer’s program, provided the program complies with the Federal Trade Commission’s rules for such programs and the manufacturer agrees to be bound by any decision the consumer accepts.
In Ohio, ORC 1345.77 requires a consumer to use the manufacturer’s program before filing suit if the program has been qualified by the Ohio Attorney General and the consumer was given written notice of it at the time of purchase. If the manufacturer has no qualifying program, the consumer may proceed directly to a claim.
These programs are arbitration programs, not mediation. The most common is BBB AUTO LINE, which currently handles disputes nationally for 25 manufacturers, including Ford, Lincoln, Chevrolet, GMC, Buick, Cadillac, Hyundai, Kia, Genesis, Nissan, Infiniti, Mazda, Volkswagen, Audi, Rivian, and Lucid, and for Subaru in Ohio.
Other manufacturers use different third-party programs, and some, including the Stellantis brands (Chrysler, Dodge, Jeep, and Ram), may not offer a qualifying program at all, in which case the consumer can file a claim without this step. The program’s terms are described in the warranty booklet that came with the vehicle. The arbitrator reviews the repair history, may inspect the vehicle, and issues a written decision, typically within 40 days of the claim being filed.
The key difference from mediation is what the decision means. Under both states’ laws, the arbitrator’s decision is binding on the manufacturer if the consumer accepts it, but it is never binding on the consumer. A consumer who rejects the decision loses nothing and may pursue every remedy the lemon law provides, including a lawsuit. In Ohio, the five-year deadline to file suit is extended by the number of days the claim was pending in the program, so using the program does not cost the consumer any time.
What a consumer cannot do is skip the program when it applies; a lawsuit filed without first using a qualifying program can be dismissed. Because a program decision in the consumer’s favor can be enforced against the manufacturer, and a decision against the consumer carries no penalty, these programs are usually worth using, and an attorney can prepare the submission so the repair history and the statutory presumptions are presented clearly.
Consult an Experienced Lemon Law Attorney
Lemon law cases are rarely identical. Whether your manufacturer has a qualifying program, whether you received the required notice of it, and whether your repair history already meets one of the statutory presumptions all affect the right next step.
The steps to take if you think your car is a lemon begin with the repair orders, which are also the core of any arbitration submission, and the eventual buyback amount depends on how a refund is calculated in a lemon law case in your state. An attorney can determine whether arbitration is required in your case and handle it on your behalf.
If you believe that your vehicle is a lemon, contact Ronald S. Weiss, Attorney & Counselor today to schedule a case evaluation with our knowledgeable lemon law attorneys.
Ronald S. Weiss has devoted his career to guiding and representing clients involved in lemon law disputes. He can help facilitate the discussion and work to reach a mutually agreeable resolution while protecting your rights and best interests. We will present your case diligently and attempt to get you the best possible result. We are located in West Bloomfield, Michigan, and Toledo, Ohio, and we handle cases throughout both states.