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Did you purchase a vehicle that was a prior lemon law buyback?

The term ‘lemon' is used colloquially in California to reference something that is either irreparable or that keeps breaking in the same way even after it has supposedly been fixed. In fact, California's Lemon Law is designed to protect car buyers from the full extent of the costly ramifications of purchasing warrantied vehicles that have substantial, recurring flaws that the public would not expect and that should not be present in new vehicles. Unfortunately, however, nearly one-percent of new vehicles sold in the U.S. have substantial defects subject to Lemon Law protection, if sold in California, or comparable consumer protection ‘lemon laws' that have been enacted in all states in one form or another.

The requirements for a defect to qualify under a ‘lemon law' vary by state, but the basic universal requirements are that a substantial defects occurs within a certain amount of time (or vehicle mileage) from the point of purchase and that defect recurs after a reasonable number of attempts at repair. In California, the number and type of attempts at repair vary by the severity of the defect as well as the type of repair or part replacement that is attempted. In general, however, a defect requiring four or more attempts at repair or requiring a vehicle to be in the shop for more than 30 days in one year is good indication that a vehicle might qualify as a ‘lemon.'

Once a vehicle qualifies as being a ‘lemon,' the buyer is entitled to have the vehicle replaced or repurchased by the manufacturer. Replacement is typically preferable to both parties, and the buyer and manufacturer are expected to be able to negotiate an agreeable replacement that does not have the defect at issue and that comes with the same warranty as the original vehicle. If the parties are unable to negotiate an agreeable replacement or if a replacement vehicle is unavailable, the manufacturer must offer to repurchase the lemon. Repurchase includes the full price of the vehicle, including fees, down payment, monthly payments, and any balance remaining on the associated auto loan less an amount based on the mileage actually used. The buyer is also entitled to recover any costs paid for dealer or manufacturer repairs, including any manufacturer replacement parts.

California law restricts a manufacturer's options upon repurchasing a lemon or reacquiring a lemon. First, a manufacturer is required to immediately register the vehicle in the manufacturer's name and to specifically register it as a Lemon Law buyback. A manufacturer or dealer is then allowed to resell the buyback, but it must clearly mark the vehicle as having ‘lemon' status (such as a notice on the windshield) and it must provide the buyer with a full, accurate history of the auto's defects and repair attempts (successful or not). Failure of the manufacturer or dealer to follow these requirements when selling a known ‘lemon' is considered used car fraud and entitles the unsuspecting buyer to remedial action.

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