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How Used Car Lemon Law Protect Buyers From Fraud

Lemon laws apply to both new and used cars but heavily differ from state to state. If your car has undergone several unsuccessful repairs to fix a manufacturer’s defect, it likely applies for a lemon claim. You can make lemon claims by either taking up the case to a small claims court or consulting an attorney.

Suppose you bought a used car from some shady dealership and have discovered a major mechanical failure. Do you still qualify for a warranty? What if you were sold the car “as is” and weren’t briefed on all the major defects?

USED CAR LEMON LAW

Luckily, there are laws for your protection, known as “used car lemon laws.” These laws vary greatly in terms of what they do. But the general idea is to protect the buyers of a new car and used cars from damages.

In this guide, we’ll take a look at lemon laws, what they are, how you can avail them, and where they apply.

What Is A Lemon Law?

Lemon laws protect clients of used or new cars in case they fail to live up to local standards. Although they can apply to both used and new cars, used car owners are now finding solace in lemon laws more than ever.

The term lemon law has derived from the slang “lemon” used for such cars. These cars either have a manufacturing defect or are unsuitable for use on the road. And as such, they must go under repair attempts immediately or repurchase by the manufacturer, and the buyer has full compensation.

How Does A Used Car Qualify For A Lemon Law?

What qualifies a vehicle for a used car lemon law protection varies by state. But there are general factors that come into play.

First up, your car must have a substantial defect that will render the car unsafe for use on the roads. And adequately impacts the car’s safety, but not necessarily the performance. For instance, a faulty braking system is a safety defect, but not the torn seats or a damaged suspension.

A reasonable number of repairs is also a factor when deciding if your car is a lemon. This varies by state. In the state of California, for instance, a used car will qualify as a “lemon” if it has gone through any of the following within its first 18 000 miles of buying:

  • It has been out of service for repairs for a period of more than 30 days.
  • Has been repaired at least 4 times for the same problem.
  • Repaired at least 2 times for any issue that would’ve otherwise proven fatal.

Some states might not even have lemon laws that protect owners of used cars. Those only cover cars that have been resold once. And some may only cover cars that would’ve still qualified for the original manufacturer’s warranty.

In a lot of states, even if your car does not meet the 18,000 miles requirement, you might still be able to make a claim. This is only given that the original warranty period is still intact and all the defects were there before you bought it.

Here’s a handy video guide that briefs you on what lemon laws are and whether your car qualifies for it or not:

What Types of Used Cars Qualify for a Lemon Claim?

The Future of Insurance: Claims Automation - Aberdeen

All types of used vehicles. What exactly qualifies as a vehicle differs between various legal texts. For instance, the Texas Ins. Code excludes public and commercial vehicles from the definition of a vehicle. And it doesn’t include boats or ships.

Luckily, laws that set down the rules for claiming and dealing with lemons aren’t so upfront about what a vehicle is. The only requirement is the vehicle must be for personal use. So public and commercial vehicles are out of the question. But private vehicles, motorbikes, RVs, motor homes, and even boats are safe.

Does Warranty Switch Hands When I Buy The Car From Unauthorized Dealers?

Person in Grey Shirt Handing Keys

A manufacturer’s warranty period actually checks your Vehicle Identification Number (VIN). So, it doesn’t matter how many people have used the car or whether the dealer has the authorization or not. However, your warranty can get void if the dealer has performed some repairs on the used vehicle.

Luckily though, lemon laws protect you from this. If the issue that you or the dealer have tried to repair falls under the warranty, you can still claim it, regardless of numerous repairs.

Claiming A Lemon:

Person Signing in Documentation Paper

Making a claim for lemon isn’t easy. You need to come fully prepared with all the background information necessary for making the claim.

First things first, check if the car qualifies for a lemon law claim. Aside from seeing any visible defects, you can perform a few online background checks. You can check your used car’s history reports from this website called AutoCheck. Another site you can try is the National Motor Vehicle Title Information System.

Both these databases will provide information on past accidents and branded titles the vehicle has acquired. This will reveal hidden information that your dealer may not have disclosed to you. It is important to note that not all repairs will have been made by the manufacturer. Hence, the database will not have such a record.

If you’re unsure, you can also consult a local mechanic that will take a good look at the car and report the damage. Document all this and keep it at hand when you approach the vehicle’s original manufacturer.

You can start by claiming the original car dealer, who is directly responsible for selling you a lemon. However, if that doesn’t prove fruitful, you can take matters to the manufacturers as well. In case your attempts fail again, you can finally approach your state’s attorney general. Or you can go to your local department for state consumer protection.

If you don’t want to get involved with a lemon law attorney, you can directly take matters to a small claims court. But if you want a lawyer, you can look for some private lawyers who might help you make small claims free of charge.

Lemon Law Buybacks:

When a claim is made for a lemon vehicle, there are two steps a manufacturer can take. Either the manufacturer can make sufficient repairs to the used car. Or, if the damage is beyond repair, they must repurchase the vehicle. And they can either refund you or replace the vehicle with a similar make and model. This is “buyback” and essentially your main goal when making a claim.

Repurchases involve refunding the entire price of the vehicle. And this includes all the tax you paid, the down-payment, any registration fee, along with finance charges. But they will subtract a usage fee from the final amount. The usage fee depends on the amount of time you owned and drove the car without any safety issues.

For replacement vehicles, the manufacturer will provide either the same make and model or a similar one. It is more likely they will give you a recent model instead of the one you already had, especially if they’ve discontinued it.

What States Have Lemon Laws?

Judge, Hammer, Auction Hammer, Auction, Judgment, Right

State lemon laws protect consumers from fraud and unsafe purchases, but not all states have them. And even among those, many don’t enforce the laws or provide excellent customer service.

While it wouldn’t be feasible to list down the laws present in every state, there are some as “safe-havens” for lemon owners.

Luckily, the Center for Auto Safety (CAS) has gone through the effort of ranking each state according to its lemon laws. New Jersey and Washington stand out as some of the best lemon law states, with an A grade. Hawaii, Ohio, Rhode Island, and New York follow closely, with a grade of B+.

Colorado and Illinois finished last, with an F grade. Illinois is lower on the list mainly due to the fact that it doesn’t charge manufacturers for producing and selling a lemon. Colorado also finishes last since it allows manufacturers to charge a lemon law attorney fee for those who make a lemon law claim.

South Carolina is a particular case of a used car lemon law that is only applicable to new vehicles. This is bad news for used car owners and good news for fraudulently used car dealers.

What To Do If My State Doesn’t Have A Lemon Law?

All states have new or used car lemon laws, good or bad. However, if you do find yourself in such a situation, you can still pursue a claim under federal law.

There are a few state consumer laws that may help you:

Uniform Commercial Code:

This one is specifically for used car sales. Under this law, all used car sales are automatically covered by an implied warranty. This assumes that the car is suitable for transportation. Many car-dealers like to side-step the law entirely by selling the car “as is,” which basically means that you’re buying it with all faults.

Even if you buy the car “as is,” and the UCC is not enforced, you can still make a good claim. Many such lemons sold “as is” fall under the heading of deceptive purchases. And you can get a decent refund from making a fraud claim. Furthermore, if the vehicle has been misrepresented, your fraud claim will become even stronger. Examples would be when the odometer has been spun.

Magnusson-Moss Warranty Act:

The Magnusson-Moss Warranty Act is a federal law for almost all states. It prevents any used car dealer from disclaiming or refuting an implied warranty when the dealer has provided a written warranty. In other words, all written warranties are subject to an implied warranty.

Not all dealers provide a written warranty. But those who usually specify what defects the car has and whether it’s safe to use or not. Failure to meet these requirements means you can make a warranty claim against the fraudulent dealer.

Federal Trade Commission’s Used Car Rule:

two people shaking hands

This law requires all used car dealerships to attach a buyer’s guide to every used vehicle sold under their administration. This guide should provide all the necessary details about the nature of the sale, such as; it’s put up for sale “as is” or has a warranty.

The guide should also list all major defects present in the vehicle and predicted to occur in the future. It should also detail what, if any, parts are covered by the warranty. This is to protect you from misrepresentation and hold used car dealers accountable for any fraud.

Final Words:

Finding out your consumer rights are protected under both state and federal laws is always a relief. But it’s never that easy. You have to make a number of claims and approach authorities before your requirements are fully met.

And many times, you’ll find your car doesn’t qualify for a lemon law claim at all. Perhaps, the fault wasn’t present at the time of purchase, or the original warranty has expired.

Regardless of that, used car buyers can certainly benefit from used car lemon laws. And those who own used vehicles can breathe a sigh of relief knowing their rights are safe under the law.

 

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