Home Business Insights & Advice When does The California Lemon law not apply to your vehicle?

When does The California Lemon law not apply to your vehicle?

by John Saunders
28th Feb 22 11:42 am

The California Civ. Code § 1793.2 et seq. is the state’s Lemon Law. This legislation is designed to protect consumers in the Golden State when a vehicle that is purchased/leased is a) defective and b) cannot be repaired despite the fact there has been a number of “reasonable” attempts. The Lemon Law in California applies to cars, vans, SUVs, and pickup trucks.

California Lemon Law is applicable to most new vehicles that have been leased or purchased in California that remain under the vehicle manufacturer’s original warranty. In addition, Armed Forces active-duty members (with Full-time status) that live or are stationed in California when leasing or purchasing are protected by the Lemon Law even if the vehicle was registered or bought outside California’s jurisdiction.

What does California Lemon Law cover?

The California Lemon Law covers vehicles that meet the following conditions –

  • The vehicle was bought & used primarily for personal, family, or household purposes – or,
  • The vehicle’s gross vehicle weight cannot exceed 10,000 pounds. In addition, the vehicle must be used primarily for business purposes by a person/business that has 1 but not more than 5 vehicles registered in the Golden State.

The motor vehicle must also have been –

  • Leased or purchased at a retail location in California.
  • Leased or purchased by an Armed Forces full-time active-duty member residing or stationed in California when the vehicle was leased or purchased or at the time of claim filing.

The consumers covered by Lemon Law in California include –

  • Anyone who leases or purchases a new motor vehicle from a business that manufactures, sells, distributes, or leases through the retail marketplace.
  • A lessee is covered if the term of the lease is greater than 4 months.
  • Any individual who became an owner/lessee under the manufacturer’s written warranty.
  • Any individual who is entitled, under state law, to enforce the vehicle’s warranty obligations.

Under the California Lemon Law, a manufacturer may be required by law to replace or buyback a vehicle if, after a “reasonable” number of repair attempts, the manufacturer cannot repair the problem that –

  • Remains under the manufacturer’s new-vehicle warranty.
  • Substantially impacts the vehicle’s safety, use, or value.
  • Has not been damaged by the unreasonable or unauthorised use of the vehicle after the purchase.

The number of attempted repairs that would be considered “reasonable” is contingent on a variety of factors. As such, there is no set or defined number. While the following factors are not mandatory, they offer a legitimate rebuttable presumption that the vehicle in question is a lemon if –

  • The problem first occurred within the first of – 18,000 miles or 18 months from the date of delivery
  • The owner notifies the manufacturer about the problem if required by the warranty.
  •  The vehicle has been taken in for repairs by the manufacturer or one of its agents –

The same problem remains after four or more attempts to fix the problem.

The same problem remains after 2+ attempted repairs for the same problem if the issue at hand is significant enough to cause death or serious injury.

The vehicle has been out of service because of needed repairs for 30+ days. Note that these required minimum number of days do not need to occur in a row.

What happens if a vehicle is a Lemon?

If the vehicle has been determined to meet the conditions of the Lemon Law in California – and is, in fact, a lemon, the vehicle’s manufacturer must repurchase or replace the vehicle in question promptly. The car owner is given the right to choose a refund or a replacement.

Vehicles bought back by dealers can be resold; however, they must be identified as a “Lemon Law Buyback” and include an identifying “Lemon” decal on the left door frame for cars. A Lemon Law Buyback Vehicle is defined as –any vehicle reacquired by the manufacturer due to specific warranty defect(s) is considered a Lemon Law Buyback Vehicle.

If a Lemon buyback Vehicle is not appropriately disclosed – and sold “as is,” the vehicle’s new owner may still have rights that fall under the California Lemon Law.

If Lemon Law is not specifically applicable to your case, it is possible there are other existing state or federal laws that may offer protection. Examples of this type of legislation would be a law that prohibits deceptive practices or the law that requires vehicles to meet minimum safety standards. Consult with an experienced California Lemon Law attorney for guidance on your legal rights.

When does California Lemon Law not apply to your vehicle?

This legislation does not apply in these instances –

  • The vehicle in question must meet the state-defined Lemon Law criteria. As such, the law would not apply when buying a used vehicle that has more than 18,000 miles (or is more than 18 months old) and is no longer valid under the new vehicle’s original warranty.
  • Lemon only applies to those disputes that involve a new vehicle warranty offered by a manufacturer.

California’s Department of Consumer Affairs’ Arbitration Certification Program (DCA-ACP)

The Arbitration Certification Program, offered by the state’s Consumer Affairs Division, is tasked with the responsibility of certifying and monitoring the compliance of automobile manufacturers’ third-party arbitration programs with California law. The program’s objective is to reduce the strain and cost on the court system (and consumers) by promoting alternative dispute resolution options.

The Arbitration Certification Program offers a no-cost program that helps you determine if the vehicle in question qualifies for a buyback or replacement under California law.

To be eligible for the Arbitration Certification Program, the vehicle in question’s owner must request arbitration to claim these benefits. Although, you are free to accept or reject the arbitrator’s final decision.

California’s car buyer’s bill of rights

This Bill of Rights offers certain protections if buying a new or used vehicle from a dealer licensed in the Golden State –

Buyer disclosure

Charges may NOT be added to a vehicle’s purchase contract without full disclosure and the buyer’s consent. The dealer is required to provide an itemised price list of possible optional “add-ons” that may include service contracts or anti-theft devices, among others.

Credit Score disclosure

If your purchase is leased or financed through a California dealer, they must give you your credit score and an explanation as to how it was used – in writing!

Limit on mark-up’s

When the dealer manages the financing on the purchase, it is not unusual for them to try to add hidden mark-up’s that increase the loan’s interest rate. California law sets forth maximum limits as to the amount of compensation a lender can pay a dealer.

Certified used cars

If a used car is advertised or sold as a “certified vehicle,” the car must meet specific state-defined requirements. The dealer is required to complete a comprehensive vehicle inspection and provide a copy of the inspection report that details the results to potential buyers.

Right to cancel a used car purchase

When buying a used car or vehicle, the buyer has the option to cancel within two days, although there are certain limited exceptions to this rule.

The cancellation option allows for a vehicle test drive or the opportunity to have it checked out by a mechanic – with the right to claim a full refund, for any reason, within two days. Dealers can charge a non-refundable fee for the contract cancellation option. Note that this cancellation option may not be applicable for motorcycles or off-highway vehicles.

Before buying or leasing a vehicle

Buying a new or pre-owned car is among the largest purchases consumers make. Therefore, it is essential to take your time when buying or leasing and avoid being swayed by a pushy salesperson who is just looking for a sale to make a commission or meet a quota.

Once you find a motor vehicle to meet your needs and your budget –

  • Take advantage of the modern, convenient marketplace. It’s never been easier to shop the market to locate the best deal at the best price.
  • If the vehicle is used, ask for the vehicle’s history.
  • Prepare yourself to walk away from the deal if you remain unsatisfied with the answers you receive from the dealer or their representative.

Consider these suggestions

  • Always read and understand exactly what is detailed in the purchase contract. This includes a careful review of the vehicle’s price, additional fees, and finance charges, if applicable. Speak with a licensed California attorney and do NOT sign a legal document you don’t understand the obligations set forth by the document.
  • Have a good understanding as to the vehicle’s value. There are many ways to get an accurate picture of the vehicle’s prices using car guides, ads in news magazines, online, or by simply comparing available deals.

These related publications can help, but note some may charge for access to relevant information –

  • Consumer Reports
  • Edmunds
  • National Automobile Dealers Association’s Guides
  • Kelley Blue Book
  • Be certain that you understand the contents of the warranty offered by the manufacturer or the optional extended warranties offered that may require an additional fee. Extended Warranties tend to be on the expensive side, which is why it is a good reason to find out what the warranty covers before committing to buying it.
  • If financing the vehicle, be sure to compare interest rates on the different offers you receive. It is not uncommon for a dealer-financed car to have higher fees or interest than when dealing with the bank directly.
  • Protect yourself from fraud as well as the purchase of used vehicles that may be unsafe to drive. The NMVTIS – the National Motor Vehicle Title Information System offers consumers a viable way to obtain a used vehicle’s history. Licensed dealers in the state that sell used cars must provide an NMVTIS report to the buyer.
  • Understand the restrictions regarding a used car out of the state – which must be certified to meet the criteria set for California’s smog laws to be able to register the car in the Golden State. For additional information, check out the Buying an Out of State Vehicle guide available on the state’s DMV website.
  • Research if the vehicle in question has been recalled due to a safety issue or a repair issue by checking with the National Highway Traffic Safety Administration and the Centre for Auto Safety websites.

Dispute with the car dealer?

Consider these helpful suggestions when embroiled in a dispute regarding a vehicle in California.

File a report or complaint about a car dealer

The Department of Motor Vehicles (DMV) is the state agency that regulates & licenses new and used motor vehicle dealers in California.

To report an issue or dispute that may be ongoing with a California motor vehicle dealer, reach out to the DMV, Division of Investigations. Additionally, you may file an online complaint.

New motor vehicle board mediation program

The New Motor Vehicle Board provides consumers with a free, mediation program that helps resolve disputes with new motor vehicle dealers. The Consumer Mediation Services program seeks to perform neutrally as a mediator to help decide mutually acceptable resolutions for all parties involved. The program cannot order a dealer or manufacturer to offer the resolution sought by the consumer. Complaints handled by the Consumer Mediation Program include –

  • Disputes on contracts relating to leases or purchases of vehicles.
  • Disputes regarding repairs and warranties
  • Used vehicles that are sold under original warranties.
  • Used vehicles that are sold by a new or used car dealer.

The Consumer Mediation Program cannot handle the following types of complaints

  • Private sales/transactions.
  • Odometer fraud.
  • Vehicles that are sold ‘as is.’
  • Used cars that have no remaining original warranty that is purchased from a dealer who primarily deals in used cars.
  • Lemon Law Issues.

The New Motor Vehicle Board has no authority to enforce the Tanner Consumer Protection Act (“Lemon Law”) Civil Code section 1793.22. However, Lemon Law may be enforceable through California’s civil courts.

Arbitration Program for Lemon Law Disputes

Many California vehicle manufacturers offer a California-certified arbitration program that is designed to resolve consumer warranty problems. This arbitration program is offered at no cost and can be a straightforward way to resolve a dispute.

A neutral 3rd party, agreeable by both parties, will decide whether the vehicle meets Lemon Law, and if so, what relief will be offered.  If interested, reach out to the California Department of Consumer Affairs (800-952-5210) for additional information. Not every manufacturer will be participating in California’s certified arbitration process. If this is the case, consider mediation using the  New Motor Vehicle Board.

BBB Lemon Law Dispute Resolution Program 

Another option to solve a dispute is to contact the Better Business Bureau (BBB) that serves your location. The Better Business Bureau operates one of the longest-running and largest programs – the Lemon Law Dispute Resolution, which includes vehicle problems that occur with those manufacturers participating in the BBB’s program. The BBB accepts complaints from consumers regarding an area or local business. They attempt to neutrally resolve the dispute – intent on avoiding a lengthy legal process. To be eligible for this program –

  • The manufacturer must participate in the BBB Auto Line Program.
  • The vehicle must still be covered under the warranty offered by the manufacturer.
  • The issue being disputed must be covered under warranty.

The California Consumer Motor Vehicle Recovery Corporation – Recovery Fund

The Consumer Motor Vehicle Recovery Corporation (CMVRC) offers the Consumer Recovery Fund program. This helps consumers deal with a licensed dealer who has gone out of business or becomes insolvent.  For more information, visit the CMVRC website.

Are there reoccurring issues with the lease or purchase of a new or used vehicle in California?

If reoccurring issues cannot or are not repaired after multiple trips to the dealer, the vehicle might meet the criteria defined by Lemon Law. If you believe your car is a lemon, give us a call to see if we can help work towards a favorable resolution to your claim.

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