If you are in the used car market and thinking of getting yourself a good ride, there is one thing you want to avoid coming across – a lemon car. These vehicles may look good on the outside, only to reveal a nasty surprise on the inside, which eventually will net you an expensive repair – effectively turning your dream into a nightmare.
This article explains what a lemon title is, what to do if you find a lemon car on the market, and how to avoid getting one in the first place. Let's get right to it.
What is a Lemon Title?
A lemon title is a designation given to a vehicle that has been identified as a lemon. A lemon car is a vehicle with significant defects or issues that cannot be easily repaired, even after multiple attempts by the manufacturer or authorized dealership.
These issues typically include safety defects like problems with the engine, transmission, electrical system, or any vehicle part that contributes majorly to the safety of a vehicle that is usually covered by the vehicle's warranty.
When these problems keep recurring even after multiple repairs, it gets a lemon title or lemon buyback title which alerts others willing to buy the vehicle that there were significant problems with the vehicle in the past and that it was returned to the manufacturer.
Lemon Laws and Consumer Protection
You may be wondering what happens when unfortunately someone ends up with a lemon car. What happens then? In most states, the buyer would be compensated or the vehicle will be bought back by the manufacturer. This varies in different states providing different levels of protection for such situations.
State Lemon Laws
There are lemon laws in place for all fifty states and the District of Columbia for situations like these, although the lemon law in place varies in terms of scope of protection and eligibility across these states.
In most states, the consumer is legally expected to receive a vehicle replacement or a full refund from the automaker if a substantial defect cannot be repaired in four attempts. These consumer protection statutes also declare a vehicle a lemon if it doesn't move or drive for thirty days within the first 12 to 24 months or 12-000-18,000 miles.
There are some states where the manufacturer has only two attempts to fix the vehicle and correct the issue before the vehicle gets declared as a lemon. Afterall, we're talking safety here and the lives shouldn't be put at risk.
The Magnuson-Moss Warranty Act
On the federal level, consumers are still protected. The Magnuson-Moss Warranty Act is a federal law that provides additional protection for consumers who have purchased defective vehicles.
This law requires manufacturers to honor their warranties and provides a legal avenue for consumers to seek compensation if the manufacturer fails to do so. On the federal level, car buyers can even request the defendant (manufacturer) to pay for their attorney fees.
It all comes down to having a good lawyer, keeping records regarding communication with the vehicle manufacturer or dealership, and making sure the vehicle repair order forms are accurate. If all of these are in check, anyone can have a lemon car returned and receive compensation.
How Does a Car Receive a Lemon Title?
The manufacturer or dealership will typically issue a lemon title when a car is deemed a lemon. This process involves the consumer contacting the manufacturer or dealership and sharing their concerns.
You can contact them via phone, email, or better write a certified letter to the seller or dealership manager, detailing what happened, the current defect and status of the vehicle.
If the issue remains unfixed after a number of attempts have been made and you can't reach an agreement with the seller, you can file a claim. If the claim is found to be valid, the manufacturer will either replace the vehicle or provide a refund to the consumer.
Remember to keep track of all repairs and communication, from text messages and letters to repair estimates and work orders. Document everything, as this can help you if you need to pursue legal action.
Impact of a Lemon Title on Vehicle Value
Just like any other title brand, a lemon or manufacturer buyback title will affect the vehicle's resale price, market appeal, and overall desirability. They lose value faster than similar models and fast.
This depreciation can be substantial, with the vehicle's value decreasing by as much as 20% to 25% due to the branded title alone. Many car buyers also steer clear from cars with lemon titles, as they are often seen as unreliable or defective, making them more difficult to sell.
The bottom line is that these vehicles lose value fast and will most likely be difficult to sell. So, you need to consider the value you're getting before purchasing a lemon car, even though it might come at incredibly low prices. You don't want to be penny-wise and pound-foolish.
What to Do If You Have a Lemon
If you believe you have purchased a lemon, you can take several steps. The first, of course, is contacting the manufacturer or dealer and then taking legal action.
Legal Recourse
When initial attempts to resolve the problem with the manufacturer or dealer fail, the most effective method to resolve lemon cases fairly is by pursuing legal recourse. Here's how to go about it:
- First, document all repair attempts and when the car has been out of service.
- Next, file a claim with the manufacturer and follow their dispute resolution process.
- If the manufacturer fails to resolve the issue, you may need to take legal action, such as filing a lawsuit or participating in arbitration.
Alternatives to Legal Action
In some cases, it may be possible to settle with the manufacturer outside of the legal system. This could involve the manufacturer offering a replacement vehicle or a refund. Alternatively, you can participate in arbitration, a less formal and often less expensive alternative to a lawsuit.
Avoiding Lemon Cars
To avoid the trouble that comes with buying a lemon car, especially for used car buyers, it is best to be vigilant enough to identify and prevent them. You can quickly identify hidden problems with the following:
Pre-purchase inspection and test drive
A pre-purchase inspection by a trusted professional mechanic is an easy way to spot a lemon car and identify defects. With a quick check, he can tell if everything is in good condition.
If they find no problem with the vehicle, you can go for a test drive to check what sounds the engine makes, how it feels on the road, any strange noises, etc. You can even hire a professional driver for this purpose.
Vehicle history reports
You can use VIN decoder tools, and vehicle history reports to find out if the car in question has a lemon title or other severe problems in its past. A vehicle history report shows vehicle records and history, such as accident records, title brand records, theft records, etc.
If a motor vehicle has had any serious defects in the past, accidents, major repairs, or title brand records, you also get it from the vehicle history report.
Conclusion
Lemon law buyback vehicles can be frustrating and unprofitable for consumers. Nevertheless, by being familiar with the state and federal lemon laws, you would be in a position to prevent the situation and seek remedies if you bought a defective car.
Additionally, performing extensive research, having pre-purchase car inspections, and using vehicle history reports can assist in avoiding buying a lemon car in the first place and save you all the trouble.
