Purchasing a car that constantly suffers from the same mechanical issues over and over would leave a sour taste in anyone’s mouth. And that could likely be the first sign that you’ve got a lemon on your hands. And in this case, unfortunately, you cannot turn said lemon into lemonade.

Thankfully, however, there are laws that protect you from lemons. Lemons are defined as cars that do not live up to being “defect-free” under warranty claims. And because of the 1975 Magnuson-Moss Warranty Act and the Uniform Commercial Code that we’ll describe below, buyers of lemons can get the car fixed, replaced, or get a refund. So, if you’ve got a lemon on your hands, you’ve come to the right place to figure out the road ahead.

Table of Contents:

What are the lemon laws?

The lemon laws were put into place by federal and state governments to protect consumers who have purchased or leased defective consumer goods. These laws state that should a manufacturer be unable to repair a consumer good, like a car, and the defect is substantial and cannot be repaired, then the good must be replaced, or the money must be fully refunded.

The Uniform Commercial Code

The Uniform Commercial Code, which was first enacted in 1959, is used to provide continuity in sales and other commercial transactions across the United States. The purpose behind the law is to give consumers the right to receive a replacement or a full refund in case their consumer good is a lemon. Since the UCC does not specify what constitutes a lemon, it often leaves it up to a court to decide whether the manufacturer or seller refuses to comply with replacements or refunds.

Magnuson-Moss Warranty Act of 1975

The federal government enacted the Magnuson-Moss Warranty Act of 1975 to protect consumers from manufacturers and sellers by having them provide detailed warranty information on the products they sell. This allows consumers to be aware of the issues that are covered under warranties as well as what to expect should anything happen to the good post-purchase.

Are used and leased cars covered under lemon laws?

In both cases, it is a yes. For leased cars, so long as the car was leased with a warranty, it qualifies. With used cars, they can qualify under lemon law protections as long as the vehicle was purchased with a written warranty.

Note that often, used vehicles are sold while under the manufacturer’s warranty and/or a dealer’s warranty. In this case, you will still be protected and may qualify under the lemon laws. On the other hand, cars purchased from individual sellers, or private party sellers, rather than a dealer may not be protected under lemon laws, especially if the car was sold “as is.”

What is a lemon law buyback?

A lemon law buyback is the process of a manufacturer either being forced to or voluntarily reacquiring a vehicle. Lemon buybacks only happen a warranty defect that substantially affects the use of the car or impairs the value and safety of the vehicle. This typically takes place once a lemon law dispute has been concluded. Generally, buybacks result in a refund of all funds put toward the vehicle purchase or lease. This includes down payments, loan or lease payments, vehicle registration, as well as reimbursement of incidental expenses like rentals or towing services.

Defining a “reasonable number of attempted repairs”

Prior to replacing the automobile entirely or issuing a full refund, the manufacturer or seller is required to attempt repairing the defect free-of-charge a certain minimum number of times. This ensures consumers do not have to deal with endless attempted repairs on the car or dealing with long periods with a car in the repair shop.

Although specifics vary slightly per state, these are the cases in which a car must be replaced or refunded for being a lemon:

  • Safety defect: Should there be a safety defect, the car would only need one repair attempt before it must be replaced or refunded.
  • Time in the shop: If the car has been in the repair shop over a specified number of days within a year, then you are eligible for a replacement or refund.
  • Other significant defects: If your car has had issues that have seemingly been irreparable after three or four repair attempts, then you qualify for replacement or refund.

Defining a “substantial defect”

A substantial defect is a flaw or issue that impairs a vehicle’s ability to function normally, its safety, or its value. To qualify as having a substantial defect, your car must be unsafe or inoperative. What is considered substantial varies by state, so consult your state Attorney General’s website for specific guidance where you live.

What should I do if I bought a lemon?

First, make sure to have the necessary documentation. Then, notify the dealer or manufacturer and allow them a reasonable number of attempts to fix the vehicle. If the vehicle is still having issues you are entitled to a replacement or a full refund. Should the demand be refused, you can file a civil lawsuit demanding a full refund or a replacement of the same model of vehicle.

Here is a list of important documents to keep and actions to take in a lemon law case:

Purchase date and contract

Make sure you have your contract with the date of purchase in a safe place to use as evidence for your case. Always make a backup copy or two and stash them away in your files records or scan the contract so you can have a virtual copy. 

Date of first reported issue

Keep a journal and write down any and all issues with the vehicle and the circumstances in which the issues arose as well as how they were handled by the dealership or manufacturer. Continue to do so with any subsequent occurrences of the same problem or any new issues or concerns that may arise.

Keep evidence

Make sure to keep records of any communication – text messages, emails, social media texts, voicemails, and even phone calls – between you and the manufacturer or dealer. When it comes to phone calls, you can note the date, time, and duration of calls for your records. Otherwise, you can try getting a detailed phone bill that showcases the same evidence.

Service and repair records

Keep detailed records of every service and repair that the vehicle required. For example, make sure to keep all service invoices. And jot down the length of time the vehicle was in the repair shop because the number of days or length of time the vehicle spends in the shop can be used as evidence to prove the car is a lemon.

Hire an attorney

If you find that you are overwhelmed by the resistance of the dealership or manufacturer, it may be time to hire an attorney who knows the ins and outs of lemon laws. Also, they may aid your attempts at getting back at the dealership by taking on your case on a contingency fee – i.e. getting the dealership to pay your legal fees.

How do I know if the car I am looking to buy is a lemon?

The good news is that often you can find a pre-owned car’s vehicle history, including any title issues, on sites like Carfax. However, be aware that more than 60% of states do not require any special title branding for lemons. That means you may need to view the vehicle history report carefully to spot a potential lemon.

When you are purchasing a used car, you want to ensure the vehicle has not been in any major collisions or suffered any serious damages. A car’s title will reflect these issues, and if the vehicle has been compromised it will be assigned a branded title that is tied to the vehicle identification number (VIN).

Also, pay attention to the sections of a vehicle history report that specify car ownership and service records. If you notice that the manufacturer has purchased the car back from an individual, or if there have been three to four attempted repairs in a short period of time, then those are red flags you need to be aware of before purchasing that vehicle.

Although thousands of unsuspecting consumers are sold lemons throughout the U.S. on a yearly basis, lemon laws were put in place to offer those individuals protection. However, be sure to check the lemon laws in your state because each state has different laws and requirements.

Should you fall victim to a lemon purchase, know that you may not have to deal with it for very long if you take swift action. And if you are having trouble with the dealership and need further assistance, consider hiring an attorney to help with your quandary.

FAQ

Q:Are commercial vehicles exempt from lemon law?

500
A: Unfortunately, most states exclude commercial vehicles from lemon laws primarily due to the tax benefits consumer vehicles are given. However, all hope is not lost as you may still qualify under the Magnuson-Moss Warranty Act. Or if there was a breach of warranty you may qualify under the Uniform Commercial Code.
1

Q:Are leased cars covered by lemon laws?

500
A: The answer is yes, however, because each state has its own set of lemon laws regarding lemon vehicles. Therefore, if your dealer or manufacturer is incapable of repairing your vehicle after three or four attempts, or if the car has a safety issue you will be compensated with a full refund or a comparable replacement vehicle of your choice.
1

Q:Are new cars covered by lemon law?

500
A: Yes, because new cars come with written manufacturers warranties, they are covered by the lemon law. If your car does not align with the terms of the warranty and if the dealership or manufacturer is unable to repair your vehicle during the first 18 months or the first 18,000 miles of the car, then you are entitled to a full refund or a comparable replacement vehicle.
1

Q:Can a car be refunded under lemon law?

500
A: Yes, a car may be refunded under lemon law. Often, this is the best option if you have lost all hope and confidence in the manufacturer and want to wipe your hands clean and start over anew by purchasing your next vehicle from an entirely different manufacturer. You will be refunded all funds put towards the car, including lease or loan payments made, down payment, registration fees, and possibly expenses you are out, such as towing.
1

Q:Can a car be replaced with a lemon refund?

500
A: Yes. This is a good option if you are adamant that you want a similar car. And while the law does not specify that your vehicle must be the same make and model, it must be a comparable vehicle. Generally, comparable refers to the price of the vehicle. Thus, you are allowed to pick a different make or model so long as it is in the same price range.
1

Q:Can a lemon law vehicle be resold?

500
A: Yes, a lemon vehicle can be resold, and it is perfectly legal. However, the legal issue arises from whether the consumer is informed prior to their purchase that the vehicle is a lemon. So, if the seller fails to let you know of the lemon status of the car, you have grounds to file a civil lawsuit against them.
1

Q:Can a used car be covered under the lemon law?

500
A: Yes, there are lemon laws in place for used cars. However, make sure to have a written warranty when purchasing, otherwise, you may be ineligible for protections under lemon law.
1

Q:How can I find out if my car is a lemon?

500
A: Statistically, around one percent of cars in the U.S. are classified as lemons, which is over 175,000 vehicles. In order to qualify as a lemon, the vehicle must have a substantial defect that has been irreparable – given three or four repair attempts – between the first 18 months or the first 18,000 miles of the vehicle’s lifespan.
1

Q:How long does the lemon law process take?

500
A: The time it takes to process each lemon law case is dependent on the unique set of facts related to each individual case. Some cases can take as little as 90 days while others can go far beyond that. It may be a good idea to consult a lemon law attorney as soon as possible to streamline your process and give you proper guidance throughout the case.
1

Q:How much would it cost to hire a lemon law attorney?

500
A: Usually, there is no up-front cost or retainer fee when hiring a lemon law attorney. To your benefit, both federal and state lemon laws require manufacturers or dealerships to pay for your attorney fees or at the very least make a reasonable contribution toward attorney fees and costs should you successfully win your case.
1
Sources:

Article last modified on October 14, 2021. Published by Debt.com, LLC