Lemon Laws and Manufacturer Buyback: A Guide for Consumers

Imagine you’ve been planning a road trip for months and secured finance for a car that fits your budget and taste. After finding a vehicle that seems to be a great deal and runs well, you’re ready to hit the road.

However, when you begin the trip, the car starts to rattle, shake, or make strange noises on the highway. The incident forces you to cut short the trip and take it to the dealer for inspection. Unfortunately, the issue persists for many months despite multiple attempts to fix it.

It slowly dawns on you that you’ve bought a lemon due to its substantial defects. Your story is similar to other consumers who unknowingly buy lemon cars and endure the high cost of maintenance, unplanned expenses, and disruption of plans.

Fortunately, California lemon laws have prescribed manufacturer buybacks as one of the reprieves available to consumers. If you’re looking for a smooth manufacturer buyback process, consider speaking to a California lemon law attorney.

Lemon Laws: What They Are and How They Protect You

Each state, including California, has a set of lemon laws to protect consumers who buy new or used vehicles with substantial defects. Lemon laws were first enacted in 1975 by the Federal government under Magnuson-Moss-Warranty Act.

Lemon laws attempt to protect consumers if they buy defective vehicles or other products and services termed lemon that fail to meet promised quality and fitness of purpose. Lemon laws apply to vehicles with significant defects that affect their use, value, and safety.

Here’s a list of new or used vehicles with the manufacturer’s new vehicle warranty covered by California lemon laws;

  • Cars, vans, motorcycles, boats, SUVs & pick-up trucks.
  • Vehicles bought or leased for business use
  • Vehicles bought or leased for family, personal, or household purposes
  • Dealer-owned vehicles
  • Motorhome and its drive train, chassis, and chassis cab

What Protection Does Lemon Law Offer to Consumers

If a manufacturer or dealer fails to repair or fix a serious warranty defect after a reasonable number of repair attempts, the manufacturer must either;

  • Offer the buyer a cash settlement
  • Replace the vehicle with another in good working condition
  • Buy back the vehicle from you

Manufacturer Buyback Cars: Definition and Causes

A manufacturer buyback is when a manufacturer repurchases a vehicle through a voluntary program or following a consumer’s complaint. Under the program, the manufacturer refunds the vehicle’s purchase price plus additional expenses such as sales tax, registration fees, and finance charges.

Usually, there are two causes of manufacturer buybacks— lemon law buyback or goodwill.

Lemon Law Buyback

Lemon laws entitle vehicle owners to a buyback if a new or used vehicle doesn’t conform to the manufacturer’s warranty. However, before a vehicle owner invokes the buyback, they must notify and give the dealer or manufacturer a reasonable time to fix the defect.

Goodwill Buyback

A manufacturer may offer a goodwill buyback as a warm gesture to the customers. Unlike lemon buybacks that cure defects, goodwill buybacks serve marketing needs. When looking for a lemon law buyback, watch out for goodwill buybacks, which may not meet your expectations.

Eligibility for Lemon Law Protection: When to Consider a Manufacturer BuyBack

Lemon laws apply to new or used vehicles with substantial defects affecting their use, value, or safety. The consumer must allow the dealer or manufacturer a “reasonable number of attempts” to fix the defect.

More importantly, the vehicle defect should be within 18 months of delivery, or 18,000 miles, whichever comes first. 

How to Determine a “Reasonable Number of Repair Attempts”

Although there is no specific number, California’s Presumption Law offers the following guidelines to determine if a manufacturer has reasonably attempted to fix the defect.

  • The manufacturer or dealer hasn’t fixed the defect after four or more attempts
  • The vehicle has been in the repair shop for more than 30 days— not necessarily consecutive to fix a warranty defect
  • The vehicle could cause serious bodily injury or death if driven, and the dealer has made at least two unsuccessful repair attempts.

Time Limit for Filing a Lemon Law Buyback

The time limit or statute of limitation for filing lemon law claims in California is four years. The clock starts ticking when a consumer first experiences a warranty problem with their vehicle. Once the four years lapse, the statute of limitations bars you from claiming a buyback.

Despite the four-year window, making the buyback claim as soon as possible is advisable. Postponement or delays may hurt the claim’s success rate.

How to Identify Substantial Defects

A consumer must demonstrate that the lemon has a substantial(material) defect affecting its usage, value, and safety.

Here’s a list of substantial defects according to their impact on the vehicle;

  • Defects That Affect Safety: This is any defect that endangers the life of a driver, passengers, and other road users. Examples of substantial defects that affect safety include airbags that fail to deploy, malfunctioning fuel systems, electrical defects, and faulty transmission.
  • Defects That Affect Value: An engine defect can significantly reduce the vehicle’s value. Usually, the recurring problem is expensive to repair and doesn’t perform well, lowering its value and reliability.
  • Defects That Affect Vehicle Usage: Any defect significantly reducing vehicle usage can trigger a buyback. For instance, defective headlights that inhibit visibility restrict vehicle usage during the day or when conditions allow, e.g., days without fog.

Here are substantial defects that do not qualify for manufacturer buybacks

  • Vehicle defects caused by owner negligence
  • Accident-related defects
  • Material defects caused by unauthorized repairs or alterations.

Steps to Take if You Think You Have a Lemon: Navigating the Manufacturer Buyback Process

Once you’ve realized your car is a lemon, the next step you should take is to pursue a buyback by filing a lemon law claim. Unfortunately, a lemon claim is not a straightforward process.   

Even so, it’s essential to understand the process to boost your chances of success.

Here are the steps to take in the manufacturer buyback process;

Step 1: Take the Car to an Authorized Dealer For Repairs.

If you think you have a lemon car, the first step is to take your car to an authorized dealership for repairs. Warranty terms dictate that car owners should take their vehicles to authorized dealers; otherwise, you risk voiding terms of service.

It also allows the dealership to achieve a reasonable number of repair attempts.

Step 2: Maintain Records of Repair Attempts.

Your buyback claim will be as strong as your repair records. Improper repair attempts or lack of the original warranty can significantly delay the buyback process. Some of the records that can enhance your case include:

  • Repair orders, repair invoices, and receipts
  • Original vehicle purchase or leasing agreement
  • Correspondence with the manufacturer
  • Maintenance records
  • Accident history
  • Warranty document

Step 3: Hire an Experienced Lemon Law Attorney

After giving the manufacturer a reasonable window to fix your vehicle, it’s time to hire a lemon law attorney. An experienced lemon law attorney will bring much-needed knowledge and experience in pursuing a buyback.

A lemon lawyer will help you with;

  • The claim process
  • Buyback calculation
  • Negotiating with the manufacturer.

Step 4: File a Buyback Claim

Initiate the buyback claim with the help of an attorney. Upon receipt, the manufacturer will evaluate the claim and accept or deny payment. If the manufacturer agrees with your request, assess the buyback terms with your attorney. 

You can either accept or reject the terms. 

If you like the terms, return the defective vehicle in exchange for payment.  Alternatively, negotiate for a higher amount. As a last resort, seek the court’s intervention for better compensation.

How to Read A Carfax

You can use Carfax to spot a potential lemon car. Carfax is an online database with a history report that provides a detailed preview of the car’s condition and value. Carfax provides several categories related to vehicle history that includes;

  • Number of owners
  • Recall Information
  • Accidents reported
  • Status—branded, salvage, or rebuild
  • Type of Ownership
  • Damage Reported
  • Vehicle sold at auction
  • Last Odometer reading
  • Service history and records

One way to get the best out of the carfax report is by identifying potential red flags. For instance, find out why a vehicle has a tag of “manufacturer’s vehicle sold at auction.” The vehicle was most likely a buyback and later sold through an auction. Dig deeper to discover whether it was a lemon car used for auto shows or exhibitions.

Also, take a keen interest in vehicles sold at dealer auctions. The franchise dealers could have resorted to auctioning after failing to find a buyer due to multiple flaws, recalls, and defects.

Let Us Help You Pursue a Manufacturer Buyback

The experience of owning a lemon car is unpleasant. Whether it’s the frequent visits to dealerships, canceled trips, or deteriorating value, it’s not something to write home about. Consider working with an experienced attorney to improve your chances of a fair buyback payout.     

At Lemonlaw123, we work with a team of highly experienced attorneys who are passionate and ready to help.
Contact us online or call us at 657.529.5239 for a free case review.

Valerie G. Fernandez Campbell

Valerie G. Fernandez Campbell, known as The Lemon Law Lady, has dedicated her entire legal career to the specialized field of Lemon Law, a journey that began immediately after her
graduation from UCLA School of Law.

With a 99% success rate and a policy of no fees unless you win, her practice stands as a testament to her expertise in California’s Lemon Law, her commitment to her clients, and her unwavering dedication to justice and consumer rights.

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