A possible model for a Panamanian lemon law

Quebec could provide a useful model for...

Panama’s used car “lemon” law
by Phil Edmonston

Panama’s National Assembly is looking at ways it can protect used car buyers from purchasing “rebuilt” vehicles imported from North America.

Most of these cars are rebuilt wrecks that have been repaired sufficiently to be sold outside of North America in places where laws are less stringent, regardless of whether they are safe or dependable.

From the hearings so far, it looks like the government will require third-party disclosure statements whenever a used vehicle is sold by a dealer (think CarFax or Car Proof). Furthermore, the legislators are looking at legal warranties that would be mandatory for all commercial sales.

This would be an excellent initiative. In Quebec, the government framed their warranty law to not only protect buyers, but also to reduce the number of odometer turnbacks. The law is quite simple:

All used vehicles are put into one of four groups depending upon their odometer reading. Essentially, those vehicles with high mileage had less of a warranty, and low mileage cars had more of a warranty.

“A-Class” Vehicles 40,000 miles: 1 year warranty

“B-Class” Vehicles 60,000 miles: 6 months warranty

“C-Class” Vehicles 80,000 miles: 3 months warranty

“D-Class” Vehicles: 100,000+ miles: 30 days warranty

This legislation practically eliminated warranty fraud in Quebec. Perhaps Panama can do the same?

Phil Edmonston is the author of the Lemon-Aid automotive consumer guides that are sold in Canada. This article was taken with permission from the Canadian Association of Panama newsletter.

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