California Lemon Law: Used Car Dealership Liability

Used Car Dealership

Purchasing a used car can have many benefits and save you a significant amount of money. However, before you buy a pre-owned vehicle, it's crucial to do your homework on the dealership and research the specific car you’re thinking about owning. You should also be aware of what your rights are as a buyer.

California has strict laws that help protect consumers from being sold a lemon car or becoming a victim of auto dealership fraud. While the California Lemon Law generally holds a manufacturer responsible if a vehicle doesn't conform to its warranty, an auto dealership might also be liable for knowingly or fraudulently selling a consumer a defective car.

Does Lemon Law Apply to Used Cars?

The Tanner Consumer Protection Act provision of the Song Beverly Consumer Warranty Act — also known as California's Lemon Law — protects consumers who purchase a new or used vehicle in California that is under warranty and has substantial impairments affecting its value or safety.

To assert your rights under the California used car lemon law, several reasonable attempts must have been made to repair the defect. If the vehicle cannot be repaired by the manufacturer or it has been in the repair shop for thirty days or more, you might consider invoking your rights to a replacement vehicle or buyback under the lemon law.

If the original manufacturer's warranty no longer covers the car, a used car dealership should provide its own warranty. Dealership warranties usually cover the vehicle anywhere from thirty days up to three months. Additionally, California law requires that "Buy Here Pay Here" dealerships provide a buyer with a warranty covering at least thirty days or the first 1,000 miles driven.

Are Used Car Dealerships Allowed to Sell Lemons?

In California, used car dealerships are allowed to sell cars that have been labeled as "lemons," as long as they disclose the vehicle's history to the consumer. These kinds of vehicles are called "Lemon Law Buybacks."

Lemon Law Buybacks are cars that have been repurchased by the manufacturer after having been labeled a "lemon" due to a defect that couldn't be repaired after several reasonable attempts. Other times, a car might be fully repaired and labeled as a lemon due to remaining in the shop for more than thirty days.

A manufacturer must register a Lemon Law Buyback in their name and repair the defect in order to resell the vehicle to another consumer. Although the practice of reselling Lemon Law Buybacks is generally allowed under the law, both the manufacturer and dealership must meet certain legal requirements and make specific disclosures to the consumer.

The California Automotive Consumer Notification Act helps to ensure that buyers are aware of a vehicle's lemon history before they decide to purchase it. Under the law, any car that has been repurchased by a manufacturer must have a decal placed on the vehicle, indicating it is a lemon. The manufacturer must also request that the DMV notate the car's lemon status in the ownership certificate.

Dealerships must also follow specific regulations to avoid liability. If you’re considering purchasing a lemon law buyback, you must be provided with and sign a disclosure statement notifying you about the vehicle’s status. The dealer must also inform you about each specific defect that made it rise to the level of a lemon and what repairs were made to correct them.

If a car dealership sold you a Lemon Law Buyback without disclosing the vehicle's status, you may be able to assert a legal claim against the dealership.

Purchasing a "Certified" Vehicle at a Used Car Dealership

Many car dealerships offer what they refer to as "certified" pre-owned vehicles. Under California law, there are specific requirements that must be met for a vehicle to be labeled "certified."

The California Car Buyer's Bill of Rights provides consumers with certain protections when purchasing certified pre-owned vehicles. By law, a certified vehicle must undergo a complete inspection, and the consumer is entitled to a copy of the inspection report. A dealer cannot label a used car as "certified" if it is:

  • A Lemon Law Buyback
  • A manufacturer repurchase
  • Unrepairable
  • Considered "salvage"
  • Damaged by fire, flood, or collision

Vehicles also cannot be "certified" in California if they sustained frame damage or they are being sold "as is."

Dealerships are also not permitted to "roll back" the odometer to make it appear as though the car has less mileage than it actually does — civil and criminal penalties can be imposed on a dealership that engages in such deceptive practices.

Consumers who relied on a car dealership's misleading or fraudulent statements when purchasing a vehicle wrongfully labeled as "certified" are afforded remedies under California's Consumers Legal Remedies Act and may be entitled to compensation for their damages.

Can a Certified Vehicle Be a Lemon?

Just because a vehicle is "certified" doesn't mean it can't be a lemon. Often, vehicles only undergo visual inspections before being sold as certified, and many problems go unnoticed. A car might also have minor issues that are overlooked at the time of trade-in and only later rises to the level of a lemon.

If you purchased a certified pre-owned vehicle from a dealer and begin to notice problems with the transmission, brakes, steering wheel, computer system, or engine, it's crucial to bring the vehicle back to the dealership for repairs. If the problem persists after several attempts at repairs, you may be able to assert your rights under the lemon law, and any other applicable law in the event of auto dealership fraud.

Can You Sue a Used Car Dealership?

A California consumer may be able to recover the monetary loss they suffered as a result of an auto dealership's deception by filing a civil action in court. While the lemon law provides consumers with legal recourse against a manufacturer if they have purchased a defective vehicle, it's important to be aware that other legal claims may be asserted for auto dealership fraud and misrepresentation.

If a dealership sold you a used car with impairments that the dealership knew about and failed to disclose, you may be able to sue a used car dealership for your damages. For instance, if the dealership misrepresented the vehicle's condition or used other dishonest tactics, you might be entitled to recover the purchase price of the car, punitive damages, and any other compensation that a court determines is fair.

Contact a Southern California Lemon Law Used Car Attorney

If you purchased a lemon or a used car dealership failed to disclose any defects to the vehicle before you took it off the lot, you may be able to assert your rights under the lemon law or other California consumer protection laws. An experienced California Lemon Law used car and auto fraud attorney can advise you of your legal rights and available remedies. It's critical to understand that you only have four years in California to commence a lemon law claim, beginning on the date you found out about the vehicle’s defect.

The Ledbetter Law Firm helps people in Southern California who have experienced lemon law issues with their vehicles obtain a vehicle replacement or the refund that they deserve. With offices conveniently located in San Diego and Torrance, California, telephone and video conferencing options are also available. Call (619) 374-0252 to schedule a consultation with a California Lemon Law attorney today.